Many Medicare-covered Durable Medical Equipment (DME) items are reimbursed under the capped rental payment methodology. Rather than paying the full purchase price upfront, Medicare makes monthly rental payments to the supplier for a limited period. For most capped rental DME, Medicare makes payments for up to 13 continuous months, after which ownership of the equipment generally transfers to the beneficiary, provided all Medicare requirements are satisfied.

To identify the stage of the capped rental cycle, Medicare requires the following modifiers:

KH – Initial claim for the first month of a capped rental
KI – Second or third month of a capped rental
KJ – Fourth through thirteenth month of a capped rental

Modifier KJ identifies claims submitted during the later months of the capped rental period and helps Medicare apply the correct payment methodology.

Important Medicare Note: Some older references describe KJ as applying to months 4–15. Under current Medicare capped rental policy for most DME, ownership generally transfers after 13 continuous rental months, so KJ is ordinarily used for months 4–13. Always follow the latest CMS and DME MAC guidance for the specific HCPCS code.

Modifier

Modifier Name

Fourth Through Thirteenth Month of a Capped Rental

Plain English Explanation

Modifier KJ tells the insurance payer:

“This claim is for the fourth through thirteenth month of a Medicare capped rental period.”

It indicates that the equipment continues to be rented and that the claim falls within the later stage of the capped rental cycle.

Purpose of Modifier KJ

Modifier KJ is used to:

Identify rental months 4–13.
Distinguish these months from the first three rental months.
Support proper Medicare capped rental payment.
Ensure accurate DMEPOS claim processing.
Comply with CMS billing requirements.

Understanding Modifier KJ

Medicare uses three modifiers to identify the capped rental timeline.

Modifier	Rental Period
KH	First month
KI	Second and third months
KJ	Fourth through thirteenth months

For most capped rental equipment:

Month 1 → KH
Months 2–3 → KI
Months 4–13 → KJ

After the thirteenth continuous rental month, ownership generally transfers to the beneficiary unless a different Medicare payment methodology applies.

When to Use Modifier KJ

Use Modifier KJ when:

Billing the fourth through thirteenth rental month.
The HCPCS code falls under Medicare’s capped rental payment category.
Medical necessity continues.
Rental documentation remains valid.
The beneficiary continues to meet Medicare coverage requirements.

Examples include:

CPAP devices (during applicable capped rental periods)
Semi-electric hospital beds
Patient lifts
Standard wheelchairs
Other Medicare capped rental DME items

When NOT to Use Modifier KJ

Do not use Modifier KJ when:

Billing the first rental month (use KH).
Billing the second or third rental month (use KI).
Billing purchased equipment (use NU, when applicable).
Billing used purchased equipment (use UE).
Billing rental-only items that are not classified as capped rental.

Medicare Rules

Under Medicare:

Modifier KJ is reported for months 4–13 of a capped rental.
It is commonly billed together with Modifier RR.
Continued payment requires ongoing medical necessity.
Suppliers must maintain proof of delivery and supporting documentation.
Accurate rental month tracking is essential.
Ownership of most capped rental equipment transfers after 13 continuous rental months, provided Medicare requirements are met.

Commercial Insurance Rules

Many commercial insurers use payment methodologies similar to Medicare.

However, commercial payer policies may differ regarding:

Rental duration.
Purchase conversion.
Prior authorization.
Modifier requirements.
Continued medical necessity.

Always verify payer-specific policies before claim submission.

Documentation Requirements

Documentation should include:

Physician order.
Medical necessity documentation.
HCPCS code.
Modifier RR.
Modifier KJ.
Proof of delivery.
Rental agreement.
Continued need documentation.
Supplier records.

Real Billing Examples

Example 1 – CPAP Sixth Rental Month

A Medicare beneficiary continues CPAP therapy during the sixth month of the capped rental period.

Billing

HCPCS E0601
Modifiers RR KJ

Example 2 – Hospital Bed Ninth Rental Month

A beneficiary continues using a semi-electric hospital bed during month nine of the capped rental.

Billing

Appropriate HCPCS code
Modifiers RR KJ

Example 3 – Patient Lift Twelfth Rental Month

A patient continues using a rented patient lift during the twelfth rental month.

Billing

Appropriate HCPCS code
Modifiers RR KJ

Example 4 – Wheelchair Fourth Rental Month

A wheelchair rental enters the fourth month under Medicare’s capped rental rules.

Billing

Appropriate HCPCS code
Modifiers RR KJ

Example 5 – Incorrect Use

A supplier bills:

RR KI

for the eighth rental month.

This is incorrect because KJ must be reported for rental months 4–13.

CMS-1500 Claim Example

Field	Example
HCPCS	E0601
Modifier 1	RR
Modifier 2	KJ
Diagnosis Pointer	Appropriate ICD-10-CM diagnosis
Units	1 rental month

Common Denial Reasons

KJ billed during the wrong rental month.
Missing RR modifier.
Incorrect rental month sequence.
HCPCS code not classified as capped rental.
Missing physician order.
Missing proof of delivery.
Continued medical necessity not documented.
Invalid modifier combination.

How to Correct the Denial

Verify the rental month.
Confirm the HCPCS payment category.
Review physician documentation.
Verify proof of delivery.
Confirm continued medical necessity.
Correct the rental-stage modifier.
Resubmit the claim or submit an appeal with supporting documentation.

Coding Tips

Use KJ only for rental months 4–13.
Report RR together with KJ when required.
Maintain accurate rental month tracking.
Document continued medical necessity throughout the rental period.
Review current DME MAC guidance for payer-specific updates.

Modifier KJ vs Modifier KH

Modifier	Description
KJ	Fourth through thirteenth rental months
KH	First rental month

Modifier KJ vs Modifier KI

Modifier	Description
KJ	Fourth through thirteenth rental months
KI	Second or third rental month

Modifier KJ vs Modifier RR

Modifier	Description
KJ	Identifies the rental stage (months 4–13)
RR	Identifies that the equipment is rented

Important: RR and KJ are commonly reported together on capped rental claims.

Modifier KJ vs Modifier NU

Modifier	Description
KJ	Fourth through thirteenth rental months
NU	New equipment purchase

Frequently Asked Questions (FAQs)

Q1. What does Modifier KJ mean?

Answer: It identifies the fourth through thirteenth month of a Medicare capped rental.

Q2. Is KJ reported with RR?

Answer: Yes. RR indicates the equipment is rented, while KJ identifies the applicable stage of the capped rental period.

Q3. Can KJ be billed during the second rental month?

Answer: No. The second and third rental months require Modifier KI.

Q4. What happens after the thirteenth rental month?

Answer: For most Medicare capped rental equipment, ownership transfers to the beneficiary after 13 continuous rental months, assuming all coverage requirements have been met.

Q5. Is KJ used for purchased equipment?

Answer: No. Purchased equipment is generally reported with Modifier NU (new equipment) or Modifier UE (used equipment), as applicable.

AR Caller Tips

When following up on capped rental denials involving Modifier KJ:

Verify the current rental month.
Confirm KH and KI were billed appropriately during earlier months.
Ensure RR accompanies KJ when required.
Verify proof of delivery and continued medical necessity.
Confirm that the HCPCS code qualifies for capped rental.
Document the payer representative’s name, reference number, and appeal instructions.

Interview Questions

Question 1

What does Modifier KJ represent?

Answer: The fourth through thirteenth month of a Medicare capped rental.

Question 2

Which modifier precedes KJ?

Answer: Modifier KI.

Question 3

Is KJ billed with RR?

Answer: Yes. RR identifies the equipment as rented, and KJ identifies the rental stage.

Question 4

What generally happens after month 13 of a capped rental?

Answer: Ownership of most capped rental equipment transfers to the beneficiary if Medicare requirements have been met.

Practice Scenario

Scenario

A Medicare beneficiary continues using a rented semi-electric hospital bed during the eighth month of the capped rental period. The supplier is submitting the monthly claim.

Question

Which modifiers should be reported?

Answer

Report the appropriate HCPCS code with Modifiers RR and KJ, indicating that the equipment is rented and the claim represents the eighth month of the capped rental period.

Related DME Modifiers

KH – Initial Claim for the First Month of a Capped Rental
KI – Second or Third Month of a Capped Rental
RR – Rental Durable Medical Equipment
NU – New Durable Medical Equipment Purchase
UE – Used Durable Medical Equipment Purchase
RA – Replacement of DME Item
RB – Replacement of a Part During Repair
NR – New Equipment Rented and Subsequently Purchased

Common Billing Mistakes

Using KJ during months 1–3.
Omitting Modifier RR.
Incorrect rental month tracking.
Billing KJ for a purchase-only item.
Missing documentation supporting continued medical necessity.
Missing proof of delivery.
Billing beyond the allowable capped rental period without verifying current Medicare policy.

Key Takeaways

Modifier KJ identifies the fourth through thirteenth month of a Medicare capped rental.
It is typically reported with Modifier RR.
KJ should be used only during the applicable later months of the capped rental cycle.
Accurate rental month tracking and complete documentation are essential.
Correct use of Modifier KJ supports Medicare compliance, accurate reimbursement, and fewer claim denials.

References

CMS Medicare Claims Processing Manual, Chapter 20 – Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).
Medicare Benefit Policy Manual – Durable Medical Equipment.
DME Medicare Administrative Contractor (DME MAC) Supplier Manuals.
HCPCS Level II Code Book.
CMS DMEPOS Fee Schedule and Payment Policies.

Conclusion

Modifier KJ is an essential Medicare DME modifier used to identify the fourth through thirteenth month of a capped rental. It works in conjunction with Modifier RR to indicate both the rental status and the stage of the capped rental cycle. Accurate rental month tracking, ongoing documentation of medical necessity, and compliance with current CMS and DME MAC guidance help ensure proper reimbursement and minimize claim denials.

Educational Disclaimer

This article was prepared with the assistance of artificial intelligence (AI) for educational and informational purposes. It is based on publicly available CMS guidance, Medicare DMEPOS billing principles, and general medical coding practices. It is not an official publication of CMS or the American Medical Association (AMA). Always consult the latest CMS Medicare Claims Processing Manual, the HCPCS Level II Code Book, DME Medicare Administrative Contractor (DME MAC) guidance, Local Coverage Determinations (LCDs), National Coverage Determinations (NCDs), and payer-specific billing policies before coding, billing, or submitting claims.