CMS has updated its FAQs on the JW and JZ modifiers. These FAQs clearly state that Medicare fee for service (FFS) does not pay for discarded amounts of “incident to supplies” (which is how all non-BLA CTPs/skin subs are now classified) and will only pay for the amount of product furnished.
Q9. Should the JW and JZ modifiers be used when billing for separately payable incident-to supplies?
A9. The JW and JZ modifiers are only used when billing for drugs and biologicals separately payable under Medicare Part B as described in FAQ 8. The JW and JZ modifiers are not appropriate for billing for incident-to supplies, even if such incident-to supplies are separately payable. In addition, discarded amounts of incident-to supplies are not payable by Medicare.
In the CY 2026 Physician Fee Schedule (PFS) final rule0 2 and CY 2026 OPPS/ASC final rule with comment period 3, CMS finalized to pay separately for the provision of certain skin substitutes 4 (hereinafter referred to as non-BLA skin substitutes) as incident-to supplies under the PFS in the nonfacility setting, and under the OPPS/ASC in the facility setting, beginning January 1, 2026 (90 FR 49492; 90 FR 53748). As a result, non-BLA skin substitutes are no longer payable under Medicare Part B as a drug or biological as of January 1, 2026, and only the administered portion is payable.
For dates of service starting January 1, 2026:
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If a provider or supplier administers an entire non-BLA skin substitute from the package or container (and no units are discarded), the JZ modifier is not appropriate when billing Medicare.
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If a provider or supplier administers a portion of a non-BLA skin substitute from the package or container and a portion is discarded, the provider or supplier may only bill for the units that are administered. It is not appropriate to bill Medicare for such discarded units under any circumstance (that is, such units may not be billed with the JW modifier and such units may not be included when billing for the administered amount).
