Knowledge Base Article

Q:

When Medicare changes the status indicator for separately payable drugs, do we have to revise the related modifiers assigned to these drugs in the chargemaster (CDM) / pharmacy system?

A:

Yes. If your hospital purchased the drug through the 340B Program, you must bill the applicable modifier JG or TB for the drug to Medicare. This is specific to drugs / biologicals assigned status indicator G or K in Addendum B under the Outpatient Prospective Payment System (OPPS).

If the drug is assigned status indicator K, Medicare wants to reduce your reimbursement for the drug if it was purchased through 340B.  In that scenario, it is your responsibility to bill the drug to Medicare with modifier JG. If you purchase a status indicator K drug through the 340B program, but do not bill the drug with modifier JG, you will be overpaid.

Modifier TB should be billed for drugs assigned status indicator G which are purchased through the 340B program.  Even though modifier TB is for informational purposes, it is still required, just like modifier JG. This modifier does “not” trigger a reduced payment from Medicare.

If a drug /biological was “not” purchased through a 340B program, modifier JG / TB should not be billed.

This creates a challenge for CDM coordinators, because this type of CDM maintenance is absolutely essential to compliant Medicare billing of these items. You should expect some status indicator changes quarterly. We acknowledge some hospitals manage pharmacy modifiers in a pharmacy system separate from the CDM.

Take a look at the upcoming status indicator changes listed in the  April 2020 OPPS Update, excerpted below – effective April 1, 2020. Keep in mind, modifiers JG and TB must be date specific to match the status indicator assigned for respective dates of service on the outpatient Medicare claim.

New CY 2020 HCPCS Codes Effective April 1, 2020 for Certain Drugs, Biologicals, and Radiopharmaceuticals

Currently Existing HCPCS Codes for Certain Drugs, Biologicals, and Radiopharmaceuticals receiving pass-through status Effective April 1, 2020

HCPCS Codes for Certain Drugs, Biologicals, and Radiopharmaceuticals with Pass-Through Status Ending Effective March 31, 2020

For more information about billing 340B modifiers under the OPPS, refer to the CMS FAQ document published April 2018.