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Modifier NR

New When Rented

Modifier NR identifies durable medical equipment that was new when initially rented and is subsequently purchased by the beneficiary, helping suppliers report the equipment's original condition during rental-to-purchase billing.

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Related Modifiers

Modifier RR

Rental Equipment

Modifier NU

New Equipment

Modifier UE

Used Equipment

When to Use

When NOT to Use

NR vs. NU & UE

Billing Example

Documentation

Rental-to-Purchase

Billing Errors

FAQs

What Is Modifier NR?

Modifier NR is a HCPCS Level II modifier used to identify durable medical equipment (DME) that was new when initially rented and is subsequently purchased.

Its official description is “New when rented.”

Unlike Modifier NU, which identifies equipment furnished as new at purchase, NR communicates that the equipment was new at the beginning of an earlier rental arrangement.

Modifier NR is particularly relevant when a beneficiary transitions from renting equipment to purchasing the same item and the applicable payer recognizes this billing arrangement.

Important: Modifier NR does not mean that every rented item can be purchased or that Medicare automatically allows rental-to-purchase conversion. The equipment's payment category and payer requirements determine whether NR is appropriate.

Quick Reference

Modifier: NR

Type: Equipment Condition

Category: DMEPOS

Meaning: New When Rented

Billing: Rental-to-Purchase

Medical Necessity: Required

When to Use Modifier NR

Previously Rented Equipment: Report NR when equipment was originally furnished new under a rental arrangement and is subsequently purchased, when permitted by the payer.

Rental-to-Purchase Conversion: Use NR when the applicable billing policy recognizes a purchase following an initial rental period.

Original Equipment Condition: Confirm that the equipment was new when first delivered to the beneficiary.

Eligible HCPCS Codes: Report NR only with equipment codes and payment arrangements that support its use.

Payer-Specific Requirements: Follow the applicable Medicare, Medicaid, or commercial insurance rules governing rental-to-purchase transactions.

Important: The supplier must be able to establish both the equipment's original condition and the qualifying purchase arrangement.

When NOT to Use Modifier NR

New Equipment Purchased Immediately: Use Modifier NU when applicable to equipment purchased new without a preceding rental arrangement.

Equipment Initially Furnished Used: Do not report NR when the item was already used when the rental began.

Ongoing Rental Claims: Use Modifier RR and other applicable rental modifiers when the equipment remains rented and no qualifying purchase transaction has occurred.

Automatic Capped Rental Conversion: Do not assume NR is required when ownership transfers after completion of a Medicare capped rental period.

Unsupported Purchase Arrangement: Do not report NR when the equipment's payment category or payer policy does not permit the purchase transaction.

Important: NR describes the condition of equipment when originally rented, not its current appearance or condition at the time of purchase.

Modifier NR vs. NU and NE

Modifiers NR, NU, and UE communicate different information about durable medical equipment.

Modifier NR – New When Rented: Identifies equipment that was new when initially rented and is subsequently purchased under an eligible billing arrangement.

Modifier NU – New Equipment: Identifies new equipment furnished as a purchase when applicable.

Modifier UE – Used Equipment: Identifies used equipment furnished under an applicable purchase arrangement.

Key Difference: NR refers to the equipment's condition at the start of a prior rental, while NU and UE identify equipment condition for the applicable purchase transaction.

Important Billing Rule: The correct modifier depends on the equipment's original condition, transaction history, and payer-specific purchase requirements.

Billing Example

A patient initially rents a new wheeled walker following surgery. After the rental period, the patient purchases the same walker under an insurance plan that permits rental-to-purchase conversion.

The supplier confirms that the walker was new when the rental began and that the purchase is eligible under the payer's policy.

Example – Previously Rented Walker Purchased:

E0143-NR

Claim Details:

HCPCS Code: E0143 – Folding wheeled walker
Modifier NR: New when rented
Transaction: Purchase following rental
Original Condition: New at initial rental
Documentation: Rental and purchase records

Initial Rental Claim:

E0143-RR

Subsequent Purchase Claim:

E0143-NR

Important: This is an illustrative claim sequence, not a statement that every payer permits rental-to-purchase billing for E0143. Verify the equipment's payment category, purchase eligibility, and any rental payments credited toward the purchase.

Documentation Requirements

Modifier NR claims require documentation showing that the equipment was new when first rented and that a qualifying purchase subsequently occurred.

Original Equipment Condition: Maintain records confirming that the equipment was new when initially furnished.

Rental Agreement: Retain the original rental agreement, including the equipment description and rental start date.

Rental History: Document previous rental claims, payments, and the period during which the beneficiary used the equipment.

Purchase Authorization: Maintain documentation showing that the purchase was permitted under the applicable payer policy.

Medical Necessity: Ensure the equipment continues to satisfy relevant coverage requirements.

Documentation Checklist:

Original equipment condition verified
Initial rental agreement retained
Rental history documented
Purchase eligibility confirmed
Medical necessity supported
Final purchase transaction recorded

Important: The documentation must establish that the purchased equipment is the same item that was originally furnished new under the rental arrangement.

Rental-to-Purchase Billing Rules

Modifier NR is particularly relevant when an equipment rental transitions into a purchase. Suppliers must determine whether the transaction is eligible and how previous rental payments affect the purchase.

Purchase Eligibility: Some DME categories allow rental or purchase, while others are subject to specific rental payment arrangements.

Rental Payment Credits: Certain payer policies require previous rental payments to be credited toward the equipment's purchase price.

Ownership Transfer: Confirm when ownership transfers to the beneficiary and whether the transaction requires a separate purchase claim.

Capped Rental Equipment: Under standard Medicare capped rental rules, ownership generally transfers after the thirteenth paid rental month. This does not automatically create a separate NR purchase claim.

Modifier LL Comparison: Modifier LL identifies a lease or rental arrangement in which rental payments are applied toward the purchase price. NR instead identifies equipment that was new when initially rented and subsequently purchased.

Important Billing Rule: NR describes the equipment's original condition during a qualifying rental-to-purchase transaction. It does not authorize a purchase or override the payer's payment limitations.

Common Billing Mistakes

Incorrect use of Modifier NR may result in equipment-status discrepancies, duplicate payment issues, or unsupported purchase claims.

Incorrect Original Condition: Reporting NR when the equipment was not new at the beginning of the rental.

No Qualifying Purchase: Using NR on an ongoing rental claim without an eligible purchase transaction.

Unsupported Purchase Conversion: Billing a purchase when the equipment's payment category does not permit the transaction.

Rental Payment Discrepancy: Failing to account for previous rental payments when required by the payer.

Duplicate Equipment Payment: Submitting a purchase claim for equipment already paid for or transferred to beneficiary ownership under applicable rental rules.

Incomplete Rental History: Missing documentation connecting the original rental equipment to the subsequent purchase.

Important: Review the payer's rental-to-purchase policy, previous claims, and supporting documentation before correcting or appealing a denied claim. For explanations of claim adjustment codes, visit DenialCodeLookup.com.

Frequently Asked Questions

Can Modifier NR be used when the beneficiary purchases equipment from a different supplier?

Possibly, depending on payer requirements. The supplier must establish that the purchased equipment was new when originally rented and that the purchase arrangement is eligible. A supplier change does not automatically qualify the transaction for NR.

Does Modifier NR mean the equipment is still considered new when purchased?

No. NR identifies equipment that was new at the beginning of the rental arrangement. The equipment may have been used during the rental period before the beneficiary purchased it.