The ABCs of J Codes and Your Bottom Line

Imagine for a moment that one of your employees gets the devastating news that their spouse has stage three cancer and needs chemotherapy. The doctor recommends a new and promising drug that is administered via infusion. Another piece of crushing information: the treatment costs $10,000 a month—a sum your team member can hardly afford.

Enter J Codes. Never heard of them? You’re not alone. J Codes are non-oral drugs like this cancer infusion that patients cannot administer themselves and are delivered through a facility or doctor’s office.

You might not know it, but J Codes are incredibly important to many of your employees and to your medical benefit spend. Here, we cover the basics and offer some cost-control solutions.

About J Codes

J Codes are certain drugs that are infused or injected as a treatment for many complex conditions such as cancers, rheumatoid arthritis, Crohn’s disease and multiple sclerosis. These drugs can be life-changing for patients—reducing disease progression, keeping them out of the hospital, and offering cures. They can save lives—and ultimately, save money on additional treatments and medical expenses.

But all these qualities are useless if they are unaffordable.

The harsh reality is that the costs of J Codes can be shocking, running in the hundreds of thousands of dollars. For employers, the challenge is how to help pay for these vital treatments, so employees and their families get the care they so desperately need.

Beyond Affordable

J Codes are part of a class of medications called specialty drugs, which account for more than half of the total drug benefit spend, according to the CVS Caremark 2020 drug trend report. The trend is expected to continue as new gene therapies hit the market.

In the case of J Codes, there are many cost drivers. First, these drugs are most often dispensed at a hospital, outpatient center, doctor’s office or infusion site and they are marked up by the medical practitioners. Second, they are usually billed against the medical benefit of insurance plans, not the pharmacy benefit. Then there’s a little-known practice called “copay accumulator adjustment policies” (CAAPS) that shift the costs to patients rather than the insurance company.

Another problem is fraud. A study by the U.S. Department of Veteran’s Affairs reported numerous incidences such as billing for the entire vial of a medication whether it is used or not, and dosing from a larger vial instead of the vial size prescribed.

Complicating matters is that in many cases, generics may not be available, so pharmaceutical companies charge exorbitant prices to begin with as a way to recoup research costs.

Cost-Control Ideas

J code audits—This is a review of J code claims to determine if the infusing provider is marking up the drug for profit (often as high as 500%). If it is, other potential delivery systems can be investigated to lower the cost and eliminate the upcharge.

Site of service – Home infusion may be possible or alternatively, an infusion clinic. Both of these are less expensive than treatment at a hospital or outpatient center.

Nonprofit patient assistance – Many pharmaceutical companies offer ways to keep their medications affordable for employees who are uninsured and under-insured.

White bagging – This is where the prescription is delivered to the patient and the patient brings it to a facility for injection or has it injected at home by an infusion company.  This eliminates the markup of the drug by the provider.

Your benefits broker should be able to help identify solutions for your situation. If you’d like to speak with an expert at TAC Benefits Group, contact us at