Part B Discarded Drug Units for 2021

The Centers for Medicare and Medicaid Services (CMS) requires all providers and suppliers to report the “JW” HCPCS modifier on Part B drug claims for discarded drugs and biologicals beginning January 1, 2017. CMS reports aggregate discarded units, also referred to as “wastage,” through the Medicare Part B Discarded Drug Units Dashboard. Beginning in 2023, as required by the Infrastructure Investment and Jobs Act,¹ manufacturers must provide a refund to the federal government for discarded units that are in excess of 10% of the total allowed amount for Part B drugs.

CMS is required to implement this policy through notice and comment rulemaking² and included implementation and operationalization guidance for the discarded unit policy in the CY 2023 Medicare Physician Fee Schedule (MPFS) proposed rule.³ To help manufacturers and stakeholders prepare, ADVI SAVEs analyzed CY 2021 Medicare FFS Part B drug claims to determine which drugs may be at risk for owing a rebate on discarded units.

In the 2020 Part B Discarded Drug Units Dashboard, CMS identified 39 drugs that have a discarded unit’s percentage above 10%. This is nearly double the number of drugs above the threshold since CMS started tracking discarded units in 2017 (see Figure 1).⁴ In 2020, an additional 15 drugs had a discarded unit’s percentage between 8.0-10.0% nearing the penalty threshold.

In replicating CMS’ methodology for claims in 2021⁵, ADVI SAVEs found 51 drugs with a discarded units percentage greater than 10% (listed in Table 1 below) and 10 additional drugs with a discarded percentage between 8-10% (Table 2 below). There are thirteen new drugs with discarded units above 10% in 2021; six of them were not on the market in 2020. Additionally, three drugs were above the 10% threshold in 2020 have now dropped below in 2021⁶.

Table 1 – Part B Drugs with Discarded Units Above 10% Threshold⁷

Table 2 – Part B Drugs with Discarded Units Nearing 10% Threshold (>8%)¹⁰

Future Research

ADVI is following CMS guidance on implementation of the Part B drug discarded units policy. With our access to near real-time Medicare claims data, we are able to analyze specific drugs dosing patterns in both the outpatient hospital and physician office setting to better understand the discarded unit’s issue. We can aggregate results at the patient, physician, group practice, or hospital outpatient provider level and have claims from CY2017 through June of 2022.

If you are interested in additional analysis related to Part B drug discarded units, please contact Caitlin Sheetz (Caitlin.sheetz@advi.com), Pete Kardel (Peter.kardel@advi.com), or your ADVI account manager.

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