Specialty drug billing glossary

Definitions here are written to match — not summarize past the point of accuracy — what this site's own modifier, pillar, and coverage pages say. Where CMS policy has changed a term's meaning recently (the JG/TB 340B identifier swap is the clearest example), the definition reflects the currently effective rule, not the historical one, and says so explicitly.

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340B Drug Pricing Program

The 340B Drug Pricing Program lets eligible safety-net hospitals and clinics purchase certain outpatient drugs from manufacturers at a statutorily discounted price. On the claim side, a 340B-covered entity reports that acquisition using the TB modifier — the sole 340B identifier since CMS discontinued JG on January 1, 2025 — which preserves HRSA program-integrity and utilization monitoring even though it doesn't currently change the OPPS payment rate. Under CMS's post-2023 default policy, 340B-acquired drugs pay the same ASP + 6% rate as non-340B drugs; the acquisition discount is the covered entity's margin, not a payer discount.

A

ASP (Average Sales Price)

The Average Sales Price is the manufacturer-reported net selling price CMS uses to set the Medicare Part B payment limit for a drug, recalculated every calendar quarter from the CMS ASP Pricing File. For most physician-administered specialty drugs the payment limit is ASP + 6% — see buy-and-bill for the full reimbursement mechanics. Wherever a data-asp price appears on this site, the 6% is already included; never multiply it by 1.06 again.

AWP (Average Wholesale Price)

Average Wholesale Price is a manufacturer-published list price that predates ASP and isn't tied to actual transaction data the way ASP is. Some commercial payers still peg drug reimbursement to a percentage of AWP rather than ASP — see buy-and-bill for how AWP, WAC, and ASP compare as fee-schedule benchmarks. Because AWP is set by the manufacturer rather than derived from sales data, it typically runs well above ASP.

B

Benefits investigation (BI)

A benefits investigation is the pre-treatment check a practice or specialty pharmacy runs against a patient's plan to confirm active coverage, deductible and out-of-pocket status, prior-authorization requirements, and which benefit a drug bills under — see medical vs. pharmacy benefit for that routing logic. It's typically completed before a buy-and-bill purchase or a specialty-pharmacy referral, since the answer determines whether the claim carries a J-code or an NDC and which department handles prior authorization. A benefits investigation is a coverage check, not a payment guarantee — it doesn't bind the payer to reimburse the eventual claim.

Billing units

Billing units are the CMS-defined dosage increment a HCPCS J-code or Q-code is billed in — for example, 1 unit of J9271 (Keytruda) equals 1 mg, so a 200 mg dose bills as 200 units. A claim's administered units plus any discarded (JW) units must equal the total billing-unit content of every vial opened. Run the dose-to-vial math, including the JW/JZ waste split, on the billing units calculator.

Biosimilar (and the FDA suffix)

A biosimilar is a biologic shown to have no clinically meaningful differences from an already-approved reference biologic. Each biosimilar carries its own CMS-assigned HCPCS code (almost always a Q-code) and an FDA-assigned four-letter non-proprietary-name suffix (for example trastuzumab-anns) — together these, not any modifier, identify the product on a claim. There is no CMS "biosimilar modifier" and no such thing as a "JR" modifier; see the full biosimilar suffix reference for the Q-code and suffix mapping by drug family.

Brown bagging

Brown bagging is when a specialty pharmacy dispenses a provider-administered drug directly to the patient, who then carries it to the practice for administration. Many payers and hospital pharmacies discourage or prohibit brown bagging outright because of cold-chain and chain-of-custody risk during patient transport. It differs from white bagging, where the pharmacy ships the dose to the practice directly rather than routing it through the patient.

Buy-and-bill

Buy-and-bill is the reimbursement model where a practice purchases a provider-administered drug, administers it, and bills the payer for both the drug (its J-code or Q-code) and the administration (a CPT infusion or injection code) on the same claim. The practice fronts the acquisition cost and is reimbursed after the claim adjudicates — for ASP-file drugs, typically at ASP + 6%, trimmed by the 2% sequestration cut. See the full buy-and-bill pillar page for the four-stage claim lifecycle and worked economics.

Buy-and-bill margin ("underwater")

A practice's buy-and-bill margin is the spread between what it pays to acquire a drug and what the payer reimburses on the claim — under Medicare Part B, the payment limit minus acquisition cost. A claim goes "underwater" when a payer reimburses less than the practice's acquisition cost, which can happen from a fee schedule set below ASP, a downcoded claim, or a denial issued after the drug was already administered; see the acquisition-risk discussion in the buy-and-bill lifecycle. Because the practice pays for the drug weeks before the claim pays, margin risk sits entirely with the practice until reimbursement lands.

C

Copay accumulator

A copay accumulator program is a plan design where manufacturer copay assistance is applied to the patient's out-of-pocket cost at the pharmacy counter but does not count toward the patient's deductible or annual out-of-pocket maximum. Once the assistance is exhausted, the patient owes the full remaining cost-share as if the assistance had never been applied. These programs apply almost exclusively to pharmacy-benefit specialty drugs billed by NDC; see the accumulator/maximizer FAQ for how they interact with the medical benefit.

Copay card

A copay card (or copay assistance program) is a manufacturer-funded benefit that reduces or eliminates a commercially insured patient's out-of-pocket cost for a specific drug, typically capped at an annual dollar maximum. Copay cards are generally restricted to commercially insured patients — federal health programs (Medicare, Medicaid, TRICARE) bar patients from using manufacturer copay assistance under anti-kickback rules, which is why foundation funds exist as the parallel option for government-insured patients. Search live copay-card and foundation-fund status by drug on the fund and copay program status board.

Copay maximizer

A copay maximizer program spreads the full available manufacturer copay-assistance amount evenly across the plan year, then sets the patient's monthly copay obligation to consume exactly that assistance — the assistance dollars are typically excluded from deductible or out-of-pocket-maximum accumulation, similar to an accumulator. Payers or PBMs, not manufacturers, run maximizer programs, and coverage varies by plan; see the accumulator/maximizer FAQ for how it differs from a straight accumulator adjustment.

CPT code

A CPT (Current Procedural Terminology) code identifies a medical procedure or service — on a buy-and-bill claim, the administration CPT code (an infusion or injection code from the 96360–96417 family) is billed alongside the drug's HCPCS J-code or Q-code. CPT codes are AMA-copyrighted, unlike the public-domain HCPCS J/Q-code set. See the full CPT administration code reference for Medicare Physician Fee Schedule rates by code.

D

Discarded drug (waste)

Discarded drug, or waste, is the portion of a single-dose container that's drawn up but not administered — for example, when a weight-based dose doesn't exactly match an available vial size. CMS requires the discarded amount to be billed on a separate claim line with the JW modifier; if nothing was discarded, the line instead carries JZ. Waste reporting applies only to single-dose containers — multi-dose vials never generate a JW/JZ obligation regardless of how much drug is left over.

Disease severity scales

Payer policies often require a documented level of disease severity before they will approve a drug. Severity is recorded in one of a few ways: a named class or stage, a scored measure, a test result with a threshold, or the prescriber’s own wording such as “moderate to severe”. The scales below are the ones CareCost’s coverage corpus sees payers name most often. Each entry explains what the scale is and where it appears in a chart — it does not state a qualifying threshold, because that is set by the individual policy, which is quoted verbatim on the requirement itself.

MGFA class (myasthenia gravis) — A five-level classification the neurologist records in the note — not a lab and not a separate test. Class I ocular muscles only; II mild weakness beyond the eyes; III moderate; IV severe; V intubation. An a suffix means mainly limb or trunk muscles, b mainly swallowing or breathing muscles, so a policy naming a whole class covers both. Looks like: “MGFA Class IIb”.

MG-ADL score (myasthenia gravis) — An eight-question symptom survey scored in clinic: talking, chewing, swallowing, breathing, brushing teeth or combing hair, rising from a chair, double vision, eyelid droop. Each is 0–3, so the total runs 0–24 and higher is worse. Often recorded at every visit because it needs no equipment. QMG is a longer examiner-administered alternative. Looks like: “MG-ADL total score 7”.

T-score (bone density) — The result of a DXA (DEXA) scan. It compares the patient with a healthy young adult, so it is a negative number and more negative is worse: −1.0 or higher is normal, between −1.0 and −2.5 is osteopenia, −2.5 or lower is osteoporosis. Reported per site (lumbar spine, femoral neck, total hip). Do not confuse it with the Z-score on the same report, which compares the patient with their own age group. Looks like: “T-score −2.7 at the femoral neck”.

PASI and body surface area (psoriasis) — Two different numbers. BSA is the percentage of skin affected — one patient palm is roughly 1%. PASI also folds in redness, thickness and scaling, scoring 0–72, higher being worse. They are not interchangeable: a policy asking for BSA is not satisfied by a PASI alone. PASI is rarely recorded outside dermatology. Looks like: “BSA 12%” or “PASI 14.4”.

FEV1 (lung function) — The air blown out in the first second of a forced breath, measured by spirometry. Usually reported as a percentage of predicted normal, so lower is worse. The FEV1/FVC ratio on the same report is a different number used to establish obstruction. The test is often run before and after an inhaler, and a policy may specify which reading counts. Looks like: “FEV1 58% predicted”.

NYHA class (heart failure) — A four-level description of how far symptoms limit ordinary activity, recorded as a physician judgement. I no limitation; II slight — comfortable at rest, ordinary activity causes symptoms; III marked — less than ordinary activity causes symptoms; IV symptoms at rest. It describes current symptoms and can change between visits. Looks like: “NYHA class III”.

EDSS (multiple sclerosis) — A neurologist-assigned disability score running 0 to 10 in half-point steps, higher being more disabled. Broadly, up to 4.5 the patient walks unaided; from 5.0 walking is increasingly limited. It is assigned from a structured neurological examination, so it cannot be inferred from how a patient describes their walking. Looks like: “EDSS 3.5”.

DAS28 and CDAI (rheumatoid arthritis) — Scores built from counts of tender and swollen joints (28 of them) plus, for DAS28, a blood test. Below 2.6 remission, 2.6–3.2 low, 3.2–5.1 moderate, above 5.1 high activity. DAS28 comes in a CRP and an ESR form which do not give the same number, so match whichever the policy names. CDAI and SDAI are related scores needing no blood test. Looks like: “DAS28-CRP 4.8”.

Mayo score and Harvey-Bradshaw Index (inflammatory bowel disease) — Two scores for two diseases, both rising as disease worsens. The Mayo score (ulcerative colitis) totals 0–12 from stool frequency, rectal bleeding, sigmoidoscopy findings and the physician's overall assessment; a partial Mayo drops the scope finding (0–9) when no recent sigmoidoscopy exists. Harvey-Bradshaw (Crohn) covers well-being, abdominal pain, liquid stools, abdominal mass and complications, with under 5 generally treated as remission. Note that CDAI means the Crohn Disease Activity Index here but a Clinical Disease Activity Index in rheumatology.

SLEDAI (lupus) — A score summarising disease activity across nine organ systems, each weighted 1 to 8, where higher is more active. The range is theoretically 0–105 though scores above about 20 are uncommon in practice, and trial entry criteria often sit around 6. BILAG is a different lupus index graded A–E per organ system; the two do not convert into one another. Looks like: “SLEDAI-2K 8”.

Sources. MGFA classification: Jaretzki A 3rd, Barohn RJ, Ernstoff RM, Kaminski HJ, Keesey JC, Penn AS, Sanders DB. Myasthenia gravis: recommendations for clinical research standards. Neurology 2000;55(1):16–23 (PMID 10891897). MG-ADL: Wolfe GI, Herbelin L, Nations SP, Foster B, Bryan WW, Barohn RJ. Myasthenia gravis activities of daily living profile. Neurology 1999;52(7):1487–9 (PMID 10227640). T-score bands follow the WHO diagnostic categories as published by the Bone Health & Osteoporosis Foundation and the International Osteoporosis Foundation. PASI and BSA per the Psoriasis Area and Severity Index definition. NYHA classes per the New York Heart Association functional classification. EDSS per Kurtzke's Expanded Disability Status Scale. DAS28 bands per published EULAR-referenced thresholds. Mayo and Harvey-Bradshaw per the published index definitions. SLEDAI per SLEDAI-2K. Definitions are summarised here for non-clinical staff reading a chart; they are not clinical guidance and do not set any payer's threshold.

F

Foundation fund

A foundation fund (or copay foundation) is an independent nonprofit — HealthWell Foundation, PAN Foundation, and Good Days are among the largest — that awards grants toward patient drug costs, including for Medicare and Medicaid patients who are barred from using manufacturer copay cards. Funds open and close per-disease-state award periods based on available donation dollars, so a fund open today can close without notice once its allocation is spent. Check live status, award caps, and covered J-codes for a specific drug on the fund and copay program status board.

G

GA, GZ, GY modifiers (ABN modifiers)

GA, GZ, and GY are modifiers tied to the Advance Beneficiary Notice (ABN) process for Medicare claims expected to be denied as not medically necessary. GA reports that a signed ABN is on file, shifting financial liability to the patient if Medicare denies the claim; GZ reports that the practice expects a denial but did not obtain a signed ABN, so the practice absorbs the liability instead; GY reports a statutorily excluded service for which an ABN isn't even required. See the full GA/GZ/GY reference for when each applies on a drug claim.

Gold bagging

Gold bagging is when a health system's own affiliated ("captive") specialty pharmacy handles prescribing, dispensing, and administration of a provider-administered drug internally — functioning like white bagging but keeping the pharmacy-side revenue inside the health system rather than ceding it to an external specialty pharmacy. As with white bagging, there is no J-code line on the administering site's medical claim. See the full white bagging comparison for how gold bagging stacks up against buy-and-bill, white, and brown bagging.

Gold carding (prior-auth exemption)

Gold carding is a state or payer program that exempts a provider from prior authorization on a given service once the provider's PA-approval history clears a set threshold — commonly around 90% approval over a six-to-twelve-month window. Only four states (Texas, West Virginia, Arkansas, and Wyoming) have a true fixed-threshold gold-card law in force as of mid-2026, and every state gold-card law is preempted from reaching self-funded ERISA plans, which cover roughly 63% of insured workers. See the gold-card prior-authorization law reference for state-by-state thresholds and whether drugs are included.

H

HCPCS

HCPCS (Healthcare Common Procedure Coding System) Level II is the public-domain code set CMS uses to identify drugs, biologics, and supplies on a medical claim — the J-codes and Q-codes billed on buy-and-bill claims are HCPCS Level II codes. (HCPCS Level I is CPT, which is AMA-copyrighted.) Browse the drug catalog by HCPCS code on the HCPCS/J-code index.

I

Incident-to

Incident-to billing lets a physician bill Medicare Part B for services — including drug administration — furnished by qualified auxiliary staff under the physician's direct supervision, as though the physician personally performed the service. Medicare Part B's entire drug-benefit design assumes this incident-to structure, which is the statutory basis for the medical benefit as distinct from the pharmacy benefit. Incident-to requirements — direct supervision, an established plan of care, correctly enrolled auxiliary personnel — are separate from, and don't substitute for, a drug's own coverage or prior-authorization criteria.

J

J-code

A J-code is a HCPCS Level II code (the "J" series) that identifies an injectable or infused drug for billing purposes and defines its per-unit dosage basis. Most reference-product specialty drugs carry a J-code, while most biosimilars carry a Q-code instead. Browse every drug's J-code (or Q-code) on the HCPCS/J-code index.

JC, JD, JE modifiers (legacy)

JC, JD, and JE are legacy CMS modifiers from an earlier drug-wastage reporting approach that predates the current JW/JZ single-dose-container framework introduced by CR 9603 (2017) and CR 12056 (2023). Practices should not append JC, JD, or JE to a current claim. See the full JC/JD/JE legacy reference for the historical context and why they can still surface in old billing-system defaults.

JG modifier

JG reported that a separately payable Medicare Part B drug was acquired under the 340B Drug Pricing Program by a covered entity outside the TB carve-out categories. From 2018–2022 it drove a payment cut to ASP minus 22.5%; CMS restored the standard ASP + 6% rate for JG-tagged drugs effective the CY 2023 OPPS Final Rule after American Hospital Association v. Becerra invalidated the cut. Effective January 1, 2025 (CMS MLN4800856), CMS discontinued JG for all 340B-covered entities — TB is now the sole 340B identifier across every covered-entity category. See the full JG reference for the historical payment-policy detail.

JW modifier

JW reports the units of drug discarded from a single-dose container when there is leftover after the administered dose is drawn. It has been required on Medicare Part B single-dose-container claims since January 1, 2017 (CR 9603), and pairs with JZ as mandatory complements — every single-dose-container line must carry exactly one of the two, never both, never neither. See the full JW reference for documentation requirements and common denial patterns.

JZ modifier

JZ attests that zero drug was discarded from a single-dose container — the mandatory companion to JW when there was no waste. CMS made JZ required on every Medicare Part B single-dose-container claim effective July 1, 2023 (CMS Transmittal R11603CP, CR 12056), with edit-cycle enforcement rejecting non-compliant claims starting October 1, 2023. See the full JZ reference for per-payer requirements and worked examples.

K

KX modifier

KX attests that a Medicare Local Coverage Determination's clinical coverage criteria are documented in the medical record for the service being billed. It's LCD-specific — the requirement, and whether it applies at all, varies by MAC and by drug — and it's an attestation, not a substitute for the underlying documentation, which the MAC can still request during post-payment review. See the full KX reference for the decision logic and which LCDs commonly require it.

L

LCD (Local Coverage Determination)

A Local Coverage Determination is a Medicare Administrative Contractor's policy on whether a drug or service is reasonable and necessary for Medicare payment in that MAC's jurisdiction. The Billing & Coding Article attached to an LCD holds the actual billing detail — the covered ICD-10 diagnoses and HCPCS codes — while the LCD is the policy behind it; a National Coverage Determination, where one exists, overrides both nationally. Because each of the 12 MAC jurisdictions sets its own local coverage, the same drug-diagnosis pairing can be covered in one state and denied in another — see the Medicare coverage hub for covered diagnoses by drug.

M

MAC (Medicare Administrative Contractor)

A Medicare Administrative Contractor is one of the regional private contractors CMS uses to process Medicare Part A and Part B claims and issue Local Coverage Determinations for its jurisdiction. CMS contracts twelve A/B MAC jurisdictions to seven companies, and coverage policy — including which drugs are on the self-administered drug list — is set locally, so the same claim can pay under one MAC and deny under another. Find the MAC that covers your state on the MAC lookup.

Medical benefit

The medical benefit is the insurance-plan category that pays for drugs a clinician acquires, administers, and bills as part of a professional service — the claim carries the drug's HCPCS J-code or Q-code plus an administration CPT code, and the payer's medical-policy or utilization-management team handles prior authorization. Under Medicare, the medical benefit is Part B. See the full medical-vs-pharmacy-benefit reference for the routing decision table and worked example.

Modifier (HCPCS/CPT)

A modifier is a two-character code appended to a HCPCS or CPT claim line to communicate a circumstance affecting how a service or drug was performed or acquired, without changing the code's underlying definition — waste (JW/JZ), 340B acquisition (JG/TB), route (JA/JB), laterality (RT/LT), and ABN status (GA/GZ/GY) are the modifier families used across specialty drug claims. See the full modifier reference cluster for every modifier covered on this site.

MPFS (Medicare Physician Fee Schedule)

The Medicare Physician Fee Schedule is the CMS rate schedule that reimburses physician services, including drug-administration CPT codes, separately from the ASP-based system that prices the drug itself. On a buy-and-bill claim, the drug line pays at ASP + 6% while the administration line pays at its MPFS rate; CMS updates MPFS rates annually. See the CPT administration code reference for current MPFS rates by code.

Multi-dose vial (MDV)

A multi-dose vial is a container of injectable drug labeled by the FDA for use across multiple patients or occasions, as distinct from a single-dose container. MDVs never generate a JW or JZ reporting obligation, even if drug remains in the vial after an encounter — appending JW to an MDV line is one of the more common billing errors on infusion claims. See the JW modifier reference for how to confirm a vial's designation from its FDA label.

N

NCD (National Coverage Determination)

A National Coverage Determination is a nationwide Medicare coverage policy issued by CMS itself, rather than by an individual MAC. Where an NCD exists for a drug or service, it overrides any conflicting Local Coverage Determination and applies uniformly regardless of jurisdiction; most specialty drugs, however, are governed by MAC-level LCDs rather than an NCD. See the Medicare coverage hub for which governs a given drug.

NDC (National Drug Code)

A National Drug Code is an 11-digit FDA identifier specific to one manufacturer, strength, and package size of a drug — unlike a HCPCS J-code, which can cover multiple manufacturers and package sizes of the same active ingredient under one code. Pharmacy-benefit claims lead with the NDC and quantity dispensed; NDCs are increasingly required as a secondary identifier on medical claims too, for drug-specific rebate and utilization tracking. See the medical vs. pharmacy benefit reference for how J-code and NDC billing compare.

O

OPPS (Outpatient Prospective Payment System)

The Outpatient Prospective Payment System is the Medicare payment system for hospital outpatient services, including separately payable drugs billed by a hospital outpatient department. OPPS drug-payment policy is where the 2018–2022 340B payment cut (and its 2023 reversal) played out — see the JG modifier reference for the full OPPS 340B payment history. OPPS is distinct from the office-based Medicare Physician Fee Schedule that reimburses non-hospital practices.

Overfill

Overfill is the small amount of extra drug volume a manufacturer includes in a vial beyond its labeled content, to ensure a full deliverable dose can be withdrawn after accounting for normal syringe and needle loss. CMS guidance treats overfill as a manufacturing allowance, not billable drug waste — the JW/JZ framework reports discarded drug from the vial's labeled content, not the manufacturer's built-in overfill margin. Confirm a specific vial's overfill, if any, against its FDA package insert rather than assuming a uniform allowance across products.

P

Part B (Medicare Part B)

Medicare Part B is the medical-insurance benefit that pays for drugs "furnished incident to" a physician's professional service — the statutory basis for buy-and-bill. A drug is presumptively Part B-eligible when a provider administers it, unless it appears on a MAC's self-administered drug (SAD) exclusion list, in which case it falls to Part D instead. Part B drug claims are the ones subject to ASP + 6% payment limits and the JW/JZ/JG/TB modifier framework.

Part D (Medicare Part D)

Medicare Part D is the outpatient prescription-drug benefit, enacted by the 2003 Medicare Modernization Act and effective January 1, 2006, that covers self-administered drugs dispensed through a retail or mail-order pharmacy. A HCPCS code listed on a MAC's self-administered drug (SAD) exclusion list is excluded from Part B and routes to Part D instead — Part D claims are billed by NDC through a Part D plan sponsor, not on the medical claim a practice submits. See the SAD list for which drugs fall on the Part D side by MAC.

Patient assistance program (PAP)

A patient assistance program is a manufacturer-run program that provides a drug free or heavily discounted to patients who meet income and insurance-status eligibility criteria, typically including uninsured and underinsured patients who don't qualify for a copay card or foundation fund. Eligibility, application requirements, and covered J-codes vary by manufacturer and are filtered by insurance type on this site's fund and copay program status board. A PAP is funded and run directly by the drug's manufacturer, distinct from a foundation fund, which is an independent nonprofit that can be funded by multiple manufacturers.

Payment limit

The payment limit is the maximum amount Medicare Part B pays for a drug on the ASP file — set quarterly as ASP + 6% under the Medicare Claims Processing Manual, Pub 100-04, Chapter 17. The 6% is already built into the payment-limit figure CMS publishes, and into every data-asp price shown on this site; it is a billing error to multiply the payment limit by 1.06 again. See buy-and-bill for how the payment limit fits into the full claim economics.

PBM (Pharmacy Benefit Manager)

A Pharmacy Benefit Manager administers the pharmacy-benefit side of a health plan — formulary tiering, step-therapy rules, quantity limits, and prior authorization for drugs billed by NDC. PBMs are the pharmacy-benefit counterpart to a plan's medical-policy team, which handles medical-benefit prior authorization instead; see the medical vs. pharmacy benefit reference for how the two departments and approval paths differ. Large PBMs are often affiliated with their own specialty pharmacy, which can also participate in white bagging arrangements.

Pharmacy benefit

The pharmacy benefit is the insurance-plan category that pays for drugs dispensed to a patient (or caregiver) for self-administration — the claim carries the drug's National Drug Code (NDC) and quantity dispensed, with no administration line, and a PBM handles prior authorization and formulary tiering. Under Medicare, the pharmacy benefit is Part D. See the full medical-vs-pharmacy-benefit reference for the routing decision table and worked example.

Prior authorization (PA)

Prior authorization is a payer's requirement that a drug or service be approved before it is administered or dispensed, based on documented medical necessity and, often, step-therapy or clinical criteria. Medical-benefit PA is reviewed by the payer's utilization-management team against the diagnosis and J-code; pharmacy-benefit PA runs through the PBM against the NDC and formulary tier — see the medical vs. pharmacy benefit FAQ for how the two paths differ. A provider with a strong PA-approval history on a given service may qualify for a state or payer gold-card exemption from the requirement.

Q

Q-code

A Q-code is a HCPCS Level II code, structurally identical to a J-code but reserved by CMS for a distinct category of items — most commonly biosimilar biologics and a handful of other temporary or miscellaneous drug categories. Almost every biosimilar on this site's drug catalog carries its own Q-code rather than sharing the reference product's J-code. Browse the catalog by Q-code (or J-code) on the HCPCS/J-code index.

S

SAD list (self-administered drug list)

The self-administered drug (SAD) list is each Medicare Administrative Contractor's published list of HCPCS codes it has determined are usually self-administered by more than half of patients — and therefore excluded from Part B, falling to Part D instead. Because each MAC sets its own list, the same drug code can be Part B-payable in one jurisdiction and Part D-only in another. This site tracks 58 drugs across 8 MAC exclusion lists on the SAD list reference.

Self-funded plan (ERISA)

A self-funded (or self-insured) plan is an employer health plan where the employer, not a commercial insurer, bears the financial risk for claims — these plans are governed by the federal ERISA statute and cover roughly 63% of insured workers. ERISA preemption means state insurance mandates, including state gold-card prior-authorization laws, don't reach self-funded plans; only the fully-insured market is subject to state insurance regulation. See the self-funded vs. fully-insured reference for which rulebook governs a given claim.

Sequestration

Sequestration is the mandatory 2% across-the-board cut to Medicare's payment on the Medicare-paid 80% of a Part B claim, in effect on a rolling basis since 2013 under the Budget Control Act. It applies to the Medicare-paid portion only — the patient's 20% coinsurance is unaffected — which nets to roughly ASP + 4.3% on the blended claim once both the Medicare payment and patient coinsurance are counted. See buy-and-bill for how sequestration factors into the full reimbursement math.

Single-dose container (SDC/SDV)

A single-dose container is a vial, ampule, bottle, or other container of injectable drug that FDA labeling designates for use by a single patient on one occasion — labeled "Single-Dose," "Single-Use," "SDV," or "SDC." Every single-dose-container drug line on a Medicare Part B claim must carry either JW (discarded units) or JZ (zero discarded), never both and never neither — the requirement doesn't apply to multi-dose vials. See the JW modifier reference for how to confirm a vial's designation from the FDA label.

Site of care

Site of care is where a drug is administered — physician office, hospital outpatient department, infusion suite, or the patient's home — and it's one of the factors that determines whether a drug bills under the medical or pharmacy benefit. A provider-administered dose given in a clinical setting typically routes to the medical benefit (buy-and-bill or white bagging); a self-administered dose given at home routes to the pharmacy benefit. See the benefit-routing decision table for the full factor list.

Specialty pharmacy

A specialty pharmacy is a pharmacy that dispenses high-cost, complex biologic and specialty drugs, often requiring special handling, patient support, and payer-mandated network status. Under white bagging, a specialty pharmacy purchases and owns the drug, then ships a patient-specific dose to the practice for administration — shifting acquisition and inventory risk off the practice compared to buy-and-bill. See the full white bagging reference for the claims-impact detail.

Step therapy

Step therapy is a utilization-management requirement that a patient try and fail one or more lower-cost or preferred drugs before the payer approves a requested drug. It's most common as a pharmacy-benefit prior-authorization criterion tied to formulary tier, though some medical-benefit policies apply step-therapy logic to J-code drugs as well. See the medical vs. pharmacy benefit FAQ for how step therapy fits into the broader PA picture.

T

TB modifier

TB reports that a Medicare Part B drug was acquired under the 340B Drug Pricing Program. It was originally the carve-out identifier for three categories exempt from the 2018–2022 ASP-22.5% cut — Rural Sole Community Hospitals, PPS-exempt Cancer Hospitals, and Children's Hospitals — while non-exempt entities used JG. Since CMS discontinued JG for all 340B-covered entities effective January 1, 2025 (CMS MLN4800856), TB is now the only active 340B billing identifier across every covered-entity category; it remains purely informational and doesn't change the payment rate, which is ASP + 6% for both 340B and non-340B drugs under the CY 2023 OPPS default. See the full TB reference.

W

WAC (Wholesale Acquisition Cost)

Wholesale Acquisition Cost is the manufacturer's published list price to wholesalers, before any distributor or purchaser discounts — a commonly used proxy for drug acquisition cost when a practice's actual invoice cost isn't available. Some commercial payers peg reimbursement to a percentage of WAC rather than ASP; this site's Optimizer add-on uses WAC (or NADAC) as a fallback acquisition-cost proxy per the methodology until a practice uploads its own contracted costs.

White bagging

White bagging is when a specialty pharmacy purchases and owns a provider-administered drug, then ships a patient-specific, pre-labeled dose to the practice for administration. Because the practice never buys the drug, it bills only the administration CPT code — no J-code line, and no JW/JZ, appear on its claim. See the full white-bagging pillar page for the claims-impact detail, payer-mandate landscape, and revenue comparison against buy-and-bill.

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Related billing references

Sources

• CMS, Medicare Claims Processing Manual, Pub 100-04, Chapter 17 — Drugs and Biologicals; source for JW/JZ, incident-to, and ASP payment-limit definitions.
• CMS ASP Pricing Files, updated quarterly — source data for this site's data-asp bindings and the ASP/payment-limit definitions.
• CMS, CY 2018, CY 2023, and CY 2024 OPPS Final Rules (CMS-1678-FC, CMS-1772-FC, CMS-1793-F) — 340B/JG/TB payment-policy history.
• CMS MLN4800856 — JG modifier discontinuation for 340B-covered entities effective January 1, 2025.
• American Hospital Association v. Becerra, 596 U.S. 724 (2022) — invalidated the 2018–2022 340B OPPS payment cut.
• CMS Transmittal R11603CP / CR 12056 — JZ modifier requirement, effective July 1, 2023.
• CMS Medicare Coverage Database — Local Coverage Determinations, Local Coverage Articles, and National Coverage Determinations.
• FDA Purple Book and FDA Guidance for Industry: Nonproprietary Naming of Biological Products (2017) — biosimilar suffix convention.
• Social Security Act §1861(s)(2)(B) — the self-administered-drug statutory test underlying the SAD list and Part B/Part D split.
• State gold-card statutes (Tex. Ins. Code Ch. 4201 Subch. N; W. Va. SB 267/SB 833; Ark. Code 23-99-1120; Wyo. Stat. 26-55-112) — see the gold-card reference for the full citation list.

This glossary summarizes definitions already sourced and cited in full on this site's own modifier, pillar, and coverage pages — follow each term's link for the underlying citation detail. The methodology by which we resolve source disagreements is described in the Methodology.