A total knee arthroplasty (TKA), commonly known as a knee replacement, is a common surgical procedure performed to alleviate severe pain and restore mobility in a damaged knee joint. Medicare generally covers this procedure, recognizing it as a medically necessary treatment for conditions like advanced osteoarthritis where conservative therapies have failed to provide relief. The decision for surgery must be supported by your doctor, who documents that your knee condition severely limits your ability to perform daily activities.
Coverage Under Medicare Part A
Medicare Part A, often called Hospital Insurance, covers the facility costs associated with an inpatient stay for a total knee replacement. This part of Original Medicare pays for services related to the physical hospital setting where the surgery takes place. Part A coverage includes the operating room, a semi-private room, and the general nursing care you receive while admitted. The coverage also extends to medications administered during your inpatient stay, hospital meals, and the use of necessary medical supplies.
If a short stay in a Skilled Nursing Facility (SNF) is required immediately following a qualifying hospital discharge, Part A helps cover this rehabilitation period. A qualifying hospital stay must last at least three consecutive days, not including the day of discharge. Part A fully covers the first 20 days of SNF care per benefit period, after which a daily coinsurance applies for extended stays.
Coverage Under Medicare Part B
Medicare Part B, or Medical Insurance, covers the professional services component of the knee replacement surgery and its associated post-operative care. This includes the fees charged by the medical professionals who perform and manage the surgery. The surgeon’s fee for performing the total knee arthroplasty is covered under Part B, as is the fee for the anesthesiologist who manages pain and sedation during the operation.
Part B also covers services performed in an outpatient setting, which is increasingly common for TKA. If your surgeon determines that an outpatient procedure is appropriate, Part B will cover the entire facility cost as well as the professional fees. Pre-operative services, such as diagnostic tests, X-rays, and lab work performed in an outpatient clinic or doctor’s office, are covered by Part B.
A substantial portion of post-operative recovery falls under Part B coverage, specifically outpatient physical therapy (PT). Physical therapy is a necessary component of recovery to regain strength and full range of motion in the new joint. Part B pays 80% of the Medicare-approved amount for medically necessary outpatient PT after the annual deductible is met. Durable Medical Equipment (DME), such as a walker or cane prescribed for use during your recovery, is also covered by Part B.
Understanding Your Out-of-Pocket Costs
While Original Medicare covers a large percentage of the cost of a total knee replacement, beneficiaries are responsible for certain out-of-pocket expenses. These costs include deductibles, coinsurance, and copayments, which vary depending on whether Part A or Part B is the primary payer for the service.
Part A Costs
For an inpatient TKA, the Part A deductible is applied per benefit period. After meeting the Part A deductible, there is typically no additional coinsurance for the first 60 days of an inpatient hospital stay. If your recovery requires an extended stay in a Skilled Nursing Facility (SNF) beyond the initial 20 covered days, a daily coinsurance applies for days 21 through 100. This cost can accumulate quickly if a longer rehabilitation period is necessary.
Part B Costs
Services covered under Part B are subject to a separate annual deductible. Once this annual deductible is satisfied, the beneficiary is responsible for a standard 20% coinsurance of the Medicare-approved amount for all services. This 20% applies to the surgeon’s fee, the anesthesiologist’s fee, and all subsequent outpatient physical therapy sessions. Costs for post-operative care, such as outpatient physical therapy and durable medical equipment, are also subject to that same 20% coinsurance.
How Medicare Advantage Plans Handle Coverage
Medicare Advantage (Part C) plans are an alternative way to receive Medicare benefits, and they must cover all the same medically necessary services as Original Medicare, including total knee replacement surgery. While the coverage scope is the same, the method of administration and the out-of-pocket costs are often different.
Part C plans are allowed to set their own cost-sharing amounts, which means they may have different copayments, deductibles, and coinsurance than the standard Original Medicare rates. Beneficiaries must review their plan’s Evidence of Coverage to determine their specific financial responsibility for a TKA.
Many Medicare Advantage plans utilize a network of doctors and hospitals, and receiving care outside of this network can result in higher out-of-pocket costs or no coverage at all. Unlike Original Medicare, Part C plans typically require prior authorization for major procedures like a total knee replacement. The overall out-of-pocket maximum is a feature of all Medicare Advantage plans, which protects beneficiaries from unlimited costs in a year.