Modifier KI
Second or Third Month Rental
Learn exactly where Modifier KI fits into the DMEPOS capped-rental sequence, how it differs from KH and KJ, and how AR callers can troubleshoot rental-month modifier denials.
Modifier KI at a Glance
The key facts every DME biller and AR caller should know.
Official Meaning
CMS defines KI as the DMEPOS modifier for the second or third month of rental.
Month Two
KI applies to the applicable second rental month.
Month Three
KI also applies to the applicable third rental month.
Then KJ
Applicable capped-rental months four through fifteen move into the KJ portion of the sequence.
What Is Modifier KI?
A simple explanation based on CMS guidance.
CMS Definition
CMS lists Modifier KI as:
DMEPOS item, second or third month rental
KI therefore identifies the applicable second or third rental month within the DMEPOS capped-rental modifier sequence.
Plain-English Explanation
Think of KI as the “middle beginning” of a capped-rental sequence.
The equipment has already started its rental period. The claim is now representing the second or third applicable month.
KH → KI → KJ
The easiest visual way to remember the DMEPOS rental modifier sequence.
Month 1
Initial claim / first applicable rental month.
Months 2–3
Second and third applicable rental months.
Months 4–15
Applicable later capped-rental months.
KH = Start → KI = Months 2–3 → KJ = Later Months
Why Does Modifier KI Matter?
Modifier accuracy helps Medicare correctly understand the rental position of the equipment.
Identifies Rental Month
KI communicates that the applicable DME rental is in month two or month three.
Maintains Sequence
Correct sequencing helps keep the rental claim history aligned from one month to the next.
Supports Claim Processing
Incorrect rental-month modifiers can contribute to claim processing issues or denials.
Helps AR Investigation
AR callers can use the modifier to determine where the claim falls within the rental sequence.
Prevents Duplicate Start
A continuing rental claim should not automatically be treated as a brand-new first-month claim.
Supports Clean Billing
Billing teams can build a clear monthly DME rental history before submitting subsequent claims.
Month-by-Month Rental Timeline
Follow a typical capped-rental modifier sequence.
Month 1 — KH
The applicable initial / first rental month.
Month 2 — KI
The applicable second rental month.
Month 3 — KI
The applicable third rental month.
Month 4 — KJ
The applicable capped-rental sequence moves into KJ.
Month 15 — KJ
KJ applies to applicable capped-rental months four through fifteen.
KH vs KI vs KJ
Never confuse the rental-month sequence again.
| Modifier | CMS Meaning | Applicable Period | Easy Memory |
|---|---|---|---|
| KH | DMEPOS item, initial claim, purchase or first month rental | First applicable rental month | Start |
| KI | DMEPOS item, second or third month rental | Months 2–3 | Continue |
| KJ | DMEPOS item, PEN pump or capped rental months four through fifteen | Months 4–15 | Later |
KI vs RR
These modifiers communicate different pieces of information.
KI
CMS defines KI specifically as the DMEPOS item second or third month rental modifier.
“Where am I in the rental sequence?”
RR
RR identifies DME that is being rented. It does not provide the same month-specific sequencing information as KI.
“Is this equipment being rented?”
Capped Rental DME Basics
Understanding the payment model makes KI easier to understand.
Rental-Based Payment
Medicare has specific payment rules for DME categories furnished as capped rentals.
Monthly Sequence
The rental claim history determines whether the claim is in the first, second, third or later rental month.
13-Month Framework
Standard capped-rental DME generally follows a continuous-use rental period of up to 13 months before ownership transfers.
Month 1
The applicable first rental month uses KH.
Months 2–3
The applicable second and third rental months use KI.
Months 4–15
Applicable later capped-rental months use KJ.
Important
Modifier KI tells you the rental position. It does not, by itself, establish that the DME is covered, medically necessary or payable.
Modifier KI Billing Workflow
A practical workflow for clean DME rental claims.
Documentation Checklist
KI is only one component of a compliant DME claim.
- Active Medicare eligibility.
- Correct DMEPOS HCPCS code.
- Correct rental versus purchase status.
- Correct rental month history.
- Prior claim history supporting month two or three.
- Correct KI modifier when applicable.
- Written order when required.
- Medical necessity documentation.
- Face-to-face documentation when required.
- Prior authorization when applicable.
- Proof of delivery.
- Continued-use documentation when required by the applicable policy.
Modifier KI Real-World Examples
Practical examples for billing and AR teams.
A supplier furnished an applicable capped-rental DME item during the first month.
The beneficiary continues to use the same equipment and the current claim represents the second rental month.
KI is the applicable second-month rental modifier.
The same applicable capped-rental item remains in service for the third rental month.
KI remains applicable to the third rental month.
The rental sequence has reached month four.
Do not continue KI indefinitely. The applicable capped-rental sequence moves to KJ for months four through fifteen.
A new applicable capped-rental episode begins.
KH represents the applicable initial/first rental month.
The supplier receives a denial on a month-three claim because the modifier does not match the payer’s rental sequence.
The AR caller should first review the previous paid/processed claims and determine whether the current claim is actually month three.
The billing team cannot determine whether the claim is month two or month four.
Pull the beneficiary’s previous DME claims, supplier records and rental history before selecting KI.
Common Modifier KI Errors
Errors that can cause avoidable DME claim problems.
Using KH on Month 2
KH represents the initial/first rental month, not the normal second-month position.
Using KI on Month 4
KI is for the second or third month, not all later rental months.
Ignoring Prior Claims
The current claim should be reviewed together with prior rental history.
Confusing KI With RR
RR identifies rental status; KI identifies the second/third-month position.
Assuming Every DME Is Capped Rental
Verify the HCPCS code and applicable payment category before applying the sequence.
Treating KI as a Coverage Modifier
KI identifies rental timing; it does not establish coverage or medical necessity.
Restarting the Sequence
Do not automatically restart at KH because the beneficiary changes suppliers.
Ignoring Interruptions
Review applicable continuous-use and interruption rules before determining the rental month.
Assuming KI Guarantees Payment
Correct modifier reporting does not guarantee reimbursement.
AR Caller Workflow for KI Denials
Use this sequence when a payer denies a second- or third-month rental claim.
Read the EOB / ERA
Identify the exact denied claim line.
Capture CARC/RARC
Document the adjustment and remark codes.
Verify DOS
Confirm the date of service and applicable policy.
Review Previous Claims
Determine what modifier was used on months one, two and three.
Confirm Rental Month
Establish whether the current claim is actually month two or month three.
Verify HCPCS
Confirm that the equipment belongs in the applicable rental category.
Verify Documentation
Check order, medical necessity, delivery and other required documentation.
Contact the Payer
Ask why KI was rejected and what correction is required.
Correct or Appeal
Select the correct action based on the payer’s documented reason.
AR Call Script — Modifier KI
Professional language for payer calls.
“I’m calling regarding a DME claim submitted with the KI modifier.”
“Could you please provide the exact reason for the denial?”
“Can you provide the CARC and RARC codes associated with this claim line?”
“Can you confirm how your system is identifying the rental month for this DME item?”
“Our records indicate that this claim represents the second/third month of rental. Can you confirm whether KI is the correct modifier for this date of service?”
“Can you confirm whether this HCPCS code is subject to the applicable capped-rental billing sequence?”
“Is the denial related to the modifier, rental month, coverage, authorization or documentation?”
“If the modifier is incorrect, what modifier and rental month does your system expect?”
“Would you recommend a corrected claim or an appeal?”
“May I have the call reference number and representative ID?”
KI Denial Root-Cause Analysis
A KI denial is not always caused by the KI modifier.
Wrong Rental Month
The claim may actually represent month one or a later rental month.
Incorrect HCPCS
The equipment code may not be the code actually furnished.
Not Capped Rental
The item may fall under another Medicare DME payment methodology.
Rental History Conflict
Previous claims may indicate a different rental month than the billing system assumed.
Authorization Problem
The denial may be caused by an authorization requirement rather than KI.
Documentation Problem
Missing or insufficient documentation can cause payment problems even when KI is correct.
Should KI Be Used?
Use this decision process before correcting the claim.
Continued Use and Rental History
Why AR callers should review more than the current claim.
Continued Use
CMS documentation guidance explains that continued use refers to ongoing utilization of a rented item or supplies.
Suppliers are responsible for monitoring utilization and should stop billing when a rental item is no longer being used, subject to the applicable policy.
“Do the supplier records and beneficiary medical records support continued use?”
Why Previous Claims Matter
KI is a sequence-dependent modifier. Therefore, previous claim history can be critical when a payer denies the current claim.
Review the first rental claim before changing the second- or third-month modifier.
Modifier KI Quick Cheat Sheet
- KI means DMEPOS item, second or third month rental.
- KI applies to applicable second rental month.
- KI applies to applicable third rental month.
- KH represents the applicable first rental month.
- KJ represents applicable capped-rental months four through fifteen.
- Always review previous rental claims before selecting KI.
- Verify the HCPCS code and payment category.
- Verify continuous-use history.
- Verify medical necessity and documentation.
- Verify prior authorization when applicable.
- KI does not guarantee reimbursement.
- Do not use KI simply because the equipment is being rented.
- Use current CMS and payer-specific instructions when resolving denials.
Official CMS References
Verify Modifier KI using primary Medicare sources.
Billing Disclaimer
Modifier KI should be reported only when supported by the applicable HCPCS code, rental history, date of service and current Medicare or payer requirements. This educational page does not replace CMS manuals, DME MAC policies, LCDs, articles or payer-specific billing instructions.
Modifier KI FAQs
What does Modifier KI mean?
KI means DMEPOS item, second or third month rental.
When is Modifier KI used?
KI is used for the applicable second or third month of rental in the DMEPOS capped-rental modifier sequence.
Is KI used for month 2?
Yes. Month two is included in the CMS definition of KI.
Is KI used for month 3?
Yes. KI also applies to the third rental month.
What modifier is used for month 1?
CMS identifies KH with the initial claim / first month rental position.
What modifier is used after month 3?
CMS identifies KJ for applicable capped-rental months four through fifteen.
Is KI the same as RR?
No. RR identifies rental status, while KI identifies the second/third-month position in the applicable DMEPOS rental sequence.
Does KI guarantee payment?
No. KI does not independently establish coverage, medical necessity, authorization or reimbursement.
What should an AR caller do if KI is denied?
Review the ERA/EOB, CARC/RARC, HCPCS, previous rental claims, rental month, coverage, authorization and documentation before deciding whether to correct or appeal.
Can KI be used on the fourth month?
Not for the normal applicable capped-rental sequence. CMS identifies KI for months two and three and KJ for applicable capped-rental months four through fifteen.
Why is rental history important for KI?
Because KI is sequence-specific. The billing team needs to know what happened in the previous rental months before determining whether the current claim represents month two or three.
Does changing DME suppliers automatically restart the KI sequence?
No. Do not assume that a supplier change automatically restarts the rental sequence. Review the applicable Medicare rules and the beneficiary’s rental history.
What is the easiest way to remember KI?
Remember: KI = Months 2 and 3. KH starts the sequence and KJ follows for applicable later capped-rental months.
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