The dawn of a new year often brings with it a wave of alterations in the healthcare sector’s coding and billing policies. These modifications, while essential, can be a maze of complexity for those not intimately familiar with the domain of medical billing. This article aims to demystify these changes, focusing specifically on the realm of Applied Behavior Analysis (ABA) billing, and provide a clear, step-by-step guide to understanding them.

The Emergence of Modifier JZ – Taking Effect from January 1, 2023

In the past, specifically from the start of 2017, the Center for Medicare and Medicaid Services (CMS) mandated the use of the JW modifier for ABA billing. This modifier was designed to represent the total quantity of unused or discarded drugs or biologicals from single-dose or single-use packages. The JW modifier was a mechanism that allowed providers to claim payment for any discarded drugs or biologicals.

However, the JW modifier’s utilization has not been as widespread as intended, with compliance rates being disappointingly low. To rectify this situation, CMS has introduced a new modifier known as the JZ modifier. This modifier is used in situations where no drugs or biologicals have been discarded. The JZ modifier is specifically applicable to drugs in single-dose or single-use containers when no drugs have been discarded.

The JZ modifier was brought into effect on January 1, 2023, but the requirement for providers to use it will not kick in until July 1, 2023. Post this date, any claim for drugs in single-dose or single-use containers that haven’t used either the JZ or JW modifier may be subject to provider audits. By October 1, 2023, any claims devoid of these modifiers may risk being returned due to processing errors.

The Scope of the JW & JZ Modifiers

The CMS has made it compulsory for all suppliers and providers to employ the JZ and JW modifiers. This is specifically applicable to those purchasing and billing drugs that are payable separately under Medicare Part B. This is typically seen in environments such as outpatient departments, physicians’ offices, or critical access hospitals.

However, these requirements are not applicable to several institutions, including federally qualified health centers, rural health clinics, and inpatient hospital admissions billed through the Inpatient Prospective Payment System.

The Correct Usage of Modifiers JW and JZ

When lodging a claim using a JW modifier, two lines must be filled out for it to be processed correctly. The first line of the claim will state the payment and billing code, including the total units of drugs administered. The second line will include the billing and payment code, the JW modifier, and the total quantity of units that have been discarded.

Conversely, the JZ modifier is used when there are no amounts of discarded drugs. In this scenario, the claim will only require one line. This line will include the payment and billing code, the JZ modifier, and the total number of units that have been administered.


Staying abreast of policy changes and maintaining accuracy in billing is crucial in the medical billing landscape. By staying informed and consistent, you can ensure a smoother process and reduce the chance of errors or delays in coding and billing. Remember, these changes are designed to make the billing process more efficient and transparent, ultimately benefiting both providers and patients.

If you’re a provider who finds these changes daunting, consider partnering with a dedicated medical billing company like Operant Billing Solutions. By outsourcing your medical billing, you can focus more on patient care while leaving the complexities of billing to the experts.