2023 brought changes to the rules for injectables used in both offices and ASCs. Here, we’ll summarize some of them.


Q: How does Medicare handle claims for Dextenza (dexamethasone), a drug eluting implant in the lacrimal canal used in conjunction with ophthalmic surgery?

The passthrough status for Dextenza expired on 12/31/22. However, under CMS’ regulation for non-opioid pain management drugs as surgical supplies, Dextenza still qualifies for separate ambulatory surgical center payment in 2023. Use HCPCS code J1096 (4 units).  

That rule doesn’t extend to hospital outpatient departments. In HOPDs, the payment for Dextenza is included in the facility fee for the concurrent procedure, not in addition to it.

The procedure for insertion of Dextenza is now identified using CPT code 68841, formerly 0356T. In 2023, this code was reassigned from APC5694 to APC5503, and the reimbursement changed. Payment will be made for a standalone, solitary procedure, but it’s bundled with other concurrent procedures like cataract. 


Q: How does Medicare handle claims for Omidria (phenylephrine and ketorolac intraocular solution) used in conjunction with ophthalmic surgery?

Since 2021, payment is made to an ASC for Omidria as a non-opioid pain management drug in addition to the ASC facility fee reimbursement for the associated procedure. That separate payment continues in 2023. Report HCPCS code J1097. As with Dextenza, the payment for the drug supply is not paid separately in the HOPD.  


Q: How does Medicare handle claims for Dexycu (dexamethasone intraocular suspension) used in conjunction with ophthalmic surgery?

Like Dextenza, the passthrough status for Dexycu expired last year. Unlike Dextenza, Dexycu doesn’t qualify as a non-opioid pain management drug, so there’s no separate ASC payment for it in 2023, in either ASC or HOPDs.   

Note: the payment indicators in the Medicare fee schedule identify the payment status for medications.

• ASC Indicator K2—Drugs and biologicals paid separately when provided integral to a surgical procedure on ASC list; payment based on OPPS rate

• ASC Indicator N1—Packaged service/item; no separate payment made  

• HOPD Indicator N—Packaged service/item 

Q: In 2023, what’s changed in reporting for discarded amounts of medications? 

CMS is finalizing requirements for the use of the JW modifier, for reporting discarded amounts of drugs, and a new modifier, JZ, for attesting that there were no discarded amounts. Providers will be required to report the JW modifier beginning January 1, 2023, and the JZ modifier no later than July 1, 2023 in all outpatient settings.1

MACs are instructed to deny claims submitted without the right modifier. This will heavily impact retina practices, since most claims for intravitreal medications could require either JW or JZ. Await instructions from the MAC before reporting the JZ modifier. Reporting before their systems are ready to handle the modifier could result in denials.

CMS has issued an FAQ about modifiers JW and JZ.2 It says, in part, “Effective July 1, 2023, providers and suppliers are required to report the JZ modifier on all claims that bill for drugs from single-dose containers that are separately payable under Medicare Part B when there are no discarded amounts.” However, the FAQ also says that the modifiers aren’t used with vials of drugs with “overfill,” which we take to mean drugs like Eylea and Lucentis. 

Staying apprised of the rules for medications requires administrators to watch for claims instructions for new drugs, as well as changing guidelines for existing drugs. The CMS website and your local MAC can be useful sources of information.


1. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2023-medicare-physician-fee-schedule-final-rule.     

2. https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/.jw-modifier-faqs.pdf.