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Modifier KH

Initial DMEPOS Claim

Modifier KH identifies the initial claim for certain DMEPOS purchases or the first month of a qualifying equipment rental, helping Medicare process the claim under the appropriate payment rules.

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Related Modifiers

Modifier RR

Rental Equipment

Modifier KI

Rental Months 2–3

Modifier KJ

Rental Months 4–13

What Is Modifier KH?

Modifier KH is a HCPCS Level II modifier used to identify the initial claim for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) payment arrangements.

Its official descriptor is “DMEPOS item, initial claim, purchase or first month rental.” For Medicare capped rental equipment, KH identifies the first month of the rental period.

Modifier KH helps distinguish the initial rental claim from subsequent months, which generally require different rental-month modifiers.

Important: Although the official descriptor includes purchases, Medicare no longer requires KH on qualifying new or used equipment purchase claims reported with NU or UE for dates of service on or after October 1, 2018. Payer requirements may differ.

Quick Reference

Modifier: KH

Type: Rental/Purchase

Category: DMEPOS

Meaning: Initial Claim

Billing: First Rental Month

Medical Necessity: Required

When to Use Modifier KH

First Month of Capped Rental DME: Report KH when billing the initial month of equipment subject to Medicare capped rental payment rules.

Initial Rental Claim: Use KH to identify the beginning of a qualifying rental period when required by the equipment's payment category.

Rental Billing With RR: Report KH alongside Modifier RR when both are required to identify the first month of a rental.

Eligible HCPCS Codes: Use KH only with equipment codes and payment arrangements that recognize the modifier.

New Qualifying Rental Period: KH may be appropriate when Medicare rules permit a new rental period following certain replacement or other qualifying circumstances.

Important: Modifier KH identifies the initial rental period but does not independently establish coverage or medical necessity.

When NOT to Use Modifier KH

Second or Third Rental Month: Do not report KH when Modifier KI is required for the second or third month of a capped rental period.

Fourth Through Thirteenth Rental Month: Do not continue using KH during later capped rental months that require Modifier KJ.

Routine Equipment Purchases: Do not automatically append KH to new or used equipment purchases. Medicare no longer requires KH with qualifying NU or UE purchase claims.

Ineligible Equipment Categories: Avoid using KH for equipment that does not fall under an applicable initial-claim modifier requirement.

Existing Rental Periods: Do not restart billing with KH simply because equipment is repaired, exchanged, or replaced. A new rental period must be permitted under the applicable payer rules.

Important: The rental-month modifier must accurately reflect the equipment's billing history and applicable Medicare payment category.

Modifier KH vs. KI and KJ

Modifiers KH, KI, and KJ identify different stages of qualifying DMEPOS rental arrangements.

Modifier KH – Initial Rental Month: Identifies the first month of a qualifying capped rental period.

Modifier KI – Rental Months 2–3: Identifies the second and third months of a capped rental period.

Modifier KJ – Rental Months 4–13: Identifies later months of a standard capped rental period.

Key Differences:

KH: First rental month.
KI: Second and third rental months.
KJ: Fourth through thirteenth rental months.

Important Billing Rule: These modifiers identify the applicable rental month. Modifier RR separately identifies the equipment as rented when required.

Billing Example

A Medicare beneficiary requires a continuous positive airway pressure (CPAP) device for home treatment. The supplier provides the equipment under a qualifying capped rental arrangement and submits the first monthly rental claim.

The HCPCS equipment code is reported with Modifier RR to identify the rental and Modifier KH to identify the first rental month.

Example – First-Month CPAP Rental:

E0601-RR-KH

Claim Details:

HCPCS Code: E0601 – Continuous positive airway pressure (CPAP) device
Modifier RR: Rental equipment
Modifier KH: First rental month
Billing Period: Month 1

Subsequent Rental Examples:

Months 2–3: E0601-RR-KI
Months 4–13: E0601-RR-KJ

Important: These examples illustrate rental-month modifiers. CPAP claims may require additional modifiers, including those related to coverage criteria, and are subject to applicable Medicare documentation and continued-coverage requirements.

Documentation Requirements

Claims involving Modifier KH must be supported by documentation establishing medical necessity, equipment delivery, and the correct initial rental period.

Standard Written Order: Maintain a valid equipment order containing the information required under the applicable DMEPOS policy.

Medical Necessity: The patient's medical record must support the prescribed equipment and applicable coverage requirements.

Proof of Delivery: Maintain documentation confirming that the equipment was furnished to the beneficiary.

Rental Start Date: Verify the equipment delivery date and the beginning of the qualifying rental period.

Rental History: Review previous claims to determine whether the equipment qualifies for an initial rental claim.

Additional Coverage Requirements: Certain equipment requires prior authorization, face-to-face evaluation, testing, or other supporting documentation.

Documentation Checklist:

Valid equipment order obtained
Medical necessity documented
Correct HCPCS code selected
Initial rental month verified
Proof of delivery retained
Additional coverage requirements satisfied

Important: Documentation must support the equipment furnished, the rental period billed, and all modifiers reported on the claim.

Billing and Claim Considerations

Modifier KH should be reported on the same claim line as the applicable HCPCS code when required to identify the initial DMEPOS rental claim.

Rental Modifier Combination: Use KH with RR when both modifiers are required for the first rental month.

Medicare Payment Category: Confirm whether the equipment is subject to capped rental rules or another payment methodology.

Rental Month Tracking: Maintain accurate rental records to determine when KH must be replaced by KI or KJ.

Purchase Claims: Medicare generally does not require KH on qualifying new or used equipment purchases reported with NU or UE for dates of service on or after October 1, 2018.

Additional Modifiers: Some equipment requires other modifiers related to coverage, medical necessity, or specific billing circumstances.

Payer Requirements: Commercial insurers and Medicaid programs may have different initial-claim and rental modifier rules.

Important Billing Rule: Verify the HCPCS code, equipment payment category, rental history, and modifier combination before submitting the claim.

Guidelines and Common Billing Mistakes

Incorrect use of Modifier KH can result in claim denials, payment delays, or inaccurate rental reimbursement.

Using KH for Later Rental Months: Reporting KH beyond the initial rental month when KI or KJ is required.

Missing Modifier RR: Omitting RR when the payer requires it to identify the rental transaction.

Incorrect Rental History: Reporting KH without verifying whether a qualifying rental period has already started.

Unnecessary KH on Purchases: Adding KH to Medicare purchase claims reported with NU or UE when it is not required.

Incorrect HCPCS Code: Reporting KH with equipment that does not qualify for the applicable initial-claim billing rules.

Important: Confirm the rental month and required modifiers before submitting the claim.

Common Denial Reasons

Claims involving Modifier KH may be denied when rental history, coverage requirements, or billing information do not meet payer guidelines.

Incorrect Rental Month: KH is reported for equipment already in a subsequent rental period.

Invalid Modifier Combination: The claim contains missing, incompatible, or unsupported DMEPOS modifiers.

Medical Necessity Not Established: Documentation does not support coverage of the prescribed equipment.

Duplicate Rental Claim: A claim has already been processed for the same equipment and rental period.

Missing Documentation: Required orders, proof of delivery, or other supporting records are incomplete.

Prior Authorization Requirements: Required authorization was not obtained before furnishing equipment subject to those rules.

Important: Review the payer's denial codes, rental history, and coverage requirements before submitting a corrected claim or appeal.

Frequently Asked Questions

Does replacing rented equipment restart the KH rental period?

Not automatically. Repairing or exchanging equipment generally does not establish a new capped rental period. A new rental period may be permitted under specific Medicare replacement rules, depending on the circumstances and supporting documentation.

Can Modifier KH be used with Modifier NU or UE?

The official KH descriptor includes initial purchases. However, Medicare no longer requires KH on qualifying purchase claims reported with NU or UE for dates of service on or after October 1, 2018. Other payers may have different requirements.