Arthroscopic knee surgery is a minimally invasive procedure used to diagnose and treat problems within the knee joint. A surgeon makes small incisions to insert an arthroscope (a tiny camera) and specialized instruments. This method is commonly employed to repair torn menisci, reconstruct ligaments, or remove damaged tissue or loose fragments. Medicare generally covers this procedure when deemed medically necessary by a physician, but the financial structure depends on the location of the surgery.
Coverage for Outpatient Procedures Under Part B
Most arthroscopic knee surgeries are performed in an outpatient setting, allowing the patient to return home the same day. This care falls under Original Medicare Part B, which covers doctor services and outpatient care. Coverage requires the procedure to meet strict medical necessity criteria, documented via specific diagnosis and procedural codes.
Medical necessity usually requires evidence that conservative, non-surgical management—such as physical therapy or medication—has failed to improve the condition. The surgery may occur in a hospital outpatient department or an Ambulatory Surgical Center (ASC). Part B covers the services provided by the surgeon, the anesthesiologist, and the facility fees.
After the patient meets their annual Part B deductible, Medicare pays 80% of the approved amount for physician services and facility charges. The patient is responsible for the remaining 20% coinsurance for the total cost of the outpatient procedure.
When Part A Covers Inpatient Care
Although less common for arthroscopic procedures, an inpatient hospital stay may be required if the surgery is complex, involves multiple repairs, or if the patient has significant co-morbidities requiring extended observation. When a physician formally admits a patient, coverage shifts to Medicare Part A, the hospital insurance component.
Part A covers costs associated with the hospital stay, including room and board and nursing care. Coverage is based on a “benefit period,” which begins upon admission to a hospital or skilled nursing facility. A benefit period ends after the patient has been out of the facility for 60 consecutive days.
Financial Responsibility and Out-of-Pocket Costs
Original Medicare does not cover 100% of costs, requiring the patient to pay deductibles and coinsurance, which vary by the site of service.
Part B Costs
For a Part B procedure, the patient must first satisfy an annual deductible (e.g., $240 in 2024). Once met, the patient is responsible for 20% coinsurance of the Medicare-approved amount for all services, including the surgeon’s fee and facility fees.
Part A Costs
If admitted as an inpatient under Part A, the financial structure uses a benefit period deductible (e.g., $1,632 in 2024). This deductible covers the patient’s share of costs for the first 60 days of a hospital stay. This amount may be paid multiple times if the patient has more than one benefit period in a year.
Patients should confirm that their healthcare provider accepts Medicare assignment. This means the provider agrees to accept the Medicare-approved amount as full payment. If assignment is not accepted, the patient may be billed for charges exceeding the Medicare-approved amount.
How Medicare Advantage Plans Handle Coverage
Medicare Advantage (Part C) plans are offered by private insurance companies approved by Medicare, providing Part A and Part B benefits. By law, these plans must cover all services that Original Medicare covers, including medically necessary arthroscopic knee surgery. However, the patient’s out-of-pocket costs can be significantly different.
Instead of 20% coinsurance, Advantage plans usually charge fixed copayments for surgical procedures and facility fees. These plans often require prior authorization, meaning the plan must approve the surgery beforehand to ensure coverage. Failure to obtain authorization may result in the plan denying payment.
Advantage plans utilize provider networks, such as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). Services are typically covered, or covered at a lower cost, only if the patient stays within that network. All Part C plans include a Maximum Out-of-Pocket (MOOP) limit, which caps the total amount a beneficiary pays annually for covered services.