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Modifier KI

Second or Third Month DMEPOS Rental

Modifier KI identifies the second or third month of a qualifying durable medical equipment rental, helping ensure accurate Medicare billing during the capped rental period.

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Related Modifiers

Modifier RR

Rental Equipment

Modifier KH

First Rental Month

Modifier KJ

Later Rental Months

What Is Modifier KI?

Modifier KI is a HCPCS Level II modifier used to identify the second or third month of a qualifying durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) rental.

Under Medicare's capped rental payment system, certain equipment is reimbursed through monthly rental payments rather than an immediate purchase. Modifier KI identifies months two and three of that rental arrangement.

It follows Modifier KH, which identifies the first rental month, and precedes Modifier KJ, which generally identifies months four through thirteen.

Modifier KI is typically reported with Modifier RR, which indicates that the equipment is being rented.

Important: KI applies only to qualifying rental arrangements. It does not establish medical necessity or independently guarantee Medicare reimbursement.

Quick Reference

Modifier: KI

Type: Rental Period

Category: DMEPOS

Meaning: Second or Third Month

Billing: 2-3 Months

Medical Necessity: Required

When to Use Modifier KI

Second Rental Month: Report KI when billing the second month of a qualifying capped rental period.

Third Rental Month: Continue reporting KI for the third month when the equipment remains eligible for rental reimbursement.

Capped Rental Equipment: Use KI with HCPCS codes subject to Medicare's applicable capped rental payment requirements.

Rental Billing With RR: Append KI alongside RR when both are required to identify the rental transaction and billing period.

Continued Medical Necessity: Confirm that the beneficiary continues to require the equipment and meets applicable coverage requirements.

Important: KI identifies the second and third rental months only. The modifier must correspond to the equipment's established rental history.

When NOT to Use Modifier KI

First Rental Month: Do not report KI on the initial capped rental claim. Modifier KH generally identifies the first rental month.

Fourth or Later Rental Month: Do not continue reporting KI after month three when Modifier KJ is required.

Equipment Purchases: KI does not identify purchases of new or used equipment. Modifiers NU and UE may apply to qualifying purchases.

Non-Capped Rental Equipment: Do not automatically use KI for equipment governed by a different Medicare payment category.

Incorrect Rental History: Do not use KI to restart or extend a rental period without meeting applicable Medicare requirements.

Important: Verify the equipment's payment category and rental history before selecting KI.

Modifier KI vs. KH and KJ

Modifiers KH, KI, and KJ distinguish the billing stages of qualifying capped rental equipment.

Modifier KH – First Rental Month: Identifies the initial month of the qualifying rental arrangement.

Modifier KI – Second and Third Rental Months: Identifies the next two rental months.

Modifier KJ – Fourth Through Thirteenth Rental Months: Identifies later rental months for standard Medicare capped rental equipment.

Key Difference: KI applies specifically to months two and three, while KH identifies the first month and KJ identifies later months.

Important Billing Rule: Modifier RR identifies the rental transaction, while KH, KI, and KJ identify the applicable rental month.

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 KI must be supported by documentation confirming medical necessity, continued equipment use, and the correct rental period.

Valid Equipment Order: Maintain the required written order supporting the prescribed equipment.

Medical Necessity: Ensure the beneficiary continues to meet applicable Medicare coverage requirements.

Proof of Delivery: Retain documentation confirming when the equipment was initially furnished.

Rental History: Verify that the initial rental month has already been billed and that the current claim represents month two or three.

Continued Use: Maintain evidence of continued equipment use when required by the applicable coverage policy.

Additional Coverage Requirements: Review equipment-specific requirements for testing, authorization, follow-up evaluations, or other supporting documentation.

Documentation Checklist:

Valid equipment order retained
Medical necessity supported
Correct HCPCS code selected
Rental month verified
Proof of delivery available
Continued-use requirements satisfied

Important: Documentation must support both the equipment's coverage and the rental period identified by Modifier KI.

Billing and Claim Considerations

Modifier KI should be reported on the same claim line as the applicable HCPCS equipment code when identifying the second or third month of a qualifying capped rental.

Modifier RR Combination: Report KI with RR when both are required for the rental claim.

Rental Month Tracking: Maintain accurate billing records to ensure KI is reported only during months two and three.

Payment Calculation: For standard capped rental DME, Medicare generally calculates the monthly fee schedule amount for the first three months using 10% of the applicable purchase-price basis, subject to statutory adjustments. Power wheelchairs have different payment calculations.

Transition to KJ: Beginning with the fourth qualifying rental month, report KJ instead of KI.

Additional Modifiers: Apply equipment-specific coverage modifiers when required by the applicable Medicare policy.

Payer Requirements: Commercial insurers and Medicaid programs may apply different rental billing rules.

Important Billing Rule: Verify the HCPCS code, rental month, and applicable payment category before submitting the claim.

Guidelines and Common Billing Mistakes

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

Using KI During Month One: Reporting KI instead of KH on the initial capped rental claim.

Continuing KI After Month Three: Failing to transition to KJ when the rental period reaches month four.

Missing Modifier RR: Omitting RR when required to identify the equipment rental.

Incorrect Rental History: Reporting KI without reviewing previous rental claims or billing periods.

Using KI on Purchases: Appending KI to equipment purchased rather than rented.

Important: Review rental records and verify modifier requirements before submitting each monthly claim.

Common Denial Reasons

Claims involving Modifier KI may be denied when rental information, modifier combinations, or coverage requirements do not match Medicare billing rules.

Incorrect Rental Month: KI is reported outside the second or third qualifying rental month.

Invalid Modifier Combination: The claim contains missing, conflicting, or unsupported equipment modifiers.

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

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

Missing Supporting Documentation: Required orders, continued-use records, or other documentation are unavailable.

Rental Period Discrepancy: The submitted rental month conflicts with the beneficiary's existing rental history.

Important: Review the remittance advice, prior rental claims, and applicable coverage policy before correcting or appealing a denied claim.

Frequently Asked Questions

Does Modifier KI apply to both the second and third rental months?

Yes. Modifier KI is reported separately on the qualifying monthly claims for both the second and third rental months. A different modifier is not needed to distinguish month two from month three.

Does changing DME suppliers restart the rental period?

Generally, no. Changing suppliers does not automatically establish a new capped rental period. The new supplier must review the beneficiary's existing rental history and use the modifier corresponding to the applicable rental month.