Learn About Medicare and Knee Replacement Costs

Understanding Medicare Coverage for Knee Replacement Surgery

Knee replacement surgery, medically known as total knee arthroplasty, represents one of the most commonly performed orthopedic procedures in the United States. According to the American Academy of Orthopaedic Surgeons, approximately 600,000 knee replacement surgeries occur annually in the United States. Medicare, the federal health insurance program for people age 65 and older, covers a significant portion of the costs associated with knee replacement procedures when certain conditions are met.

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Medicare Part A (Hospital Insurance) covers the inpatient hospital stay for knee replacement surgery, including room, board, nursing care, and other hospital services. This coverage typically includes the first three days of skilled nursing facility care following the hospital stay. Medicare Part B (Medical Insurance) covers the surgeon's services, anesthesia, and other related physician services. The combination of Part A and Part B coverage makes knee replacement surgery financially accessible for many Medicare beneficiaries, though some out-of-pocket costs still apply.

The decision to pursue knee replacement typically comes after conservative treatment options have been exhausted. Conditions that may warrant knee replacement include severe osteoarthritis, rheumatoid arthritis, or traumatic injury. Research from the CDC indicates that osteoarthritis affects approximately 32.5 million adults in the United States, with knee osteoarthritis being one of the most disabling forms. For those with advanced knee damage causing significant functional limitations, knee replacement can substantially improve quality of life and mobility.

• Medicare Part A covers hospital stays, surgical facility costs, and initial skilled nursing care
• Medicare Part B covers physician services, surgical team members, and anesthesia
• Procedures must be deemed medically necessary by the healthcare provider
• Pre-operative evaluations and post-operative follow-up visits are also covered services

Practical Takeaway: Before scheduling knee replacement surgery, verify your Medicare coverage status by calling Medicare at 1-800-MEDICARE. Request information about what specific services are covered under both Part A and Part B for your situation, as this foundational knowledge will help you understand your financial responsibility.

Breaking Down Out-of-Pocket Costs and Deductibles

Understanding the specific out-of-pocket expenses associated with knee replacement surgery under Medicare requires familiarity with how deductibles and coinsurance work. In 2024, Medicare Part A has an inpatient hospital deductible of $1,632 per benefit period. This means the beneficiary must pay this amount before Medicare begins to cover hospital charges. After the deductible is met, Medicare covers all covered services for days 1-60 of hospitalization. For days 61-90, the beneficiary pays a daily coinsurance amount of $408 per day. Most knee replacement surgeries are completed within the first 60 days of a benefit period, minimizing additional coinsurance expenses.

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Medicare Part B operates on a different cost-sharing structure. In 2024, Part B has an annual deductible of $240. After this deductible is met, Medicare typically covers 80 percent of approved charges for physician services and surgical procedures, while the beneficiary pays 20 percent coinsurance. For knee replacement surgery, this 20 percent coinsurance applies to all physician fees, surgeon fees, anesthesia services, and related medical equipment. The actual dollar amount varies based on the geographic location and the specific charges submitted by healthcare providers.

Additional out-of-pocket costs can arise from several sources beyond the standard deductibles and coinsurance. Durable medical equipment (DME) such as crutches, knee braces, walkers, and continuous passive motion machines may require separate Part B deductibles and coinsurance. Rehabilitation services, whether in an inpatient facility or outpatient setting, also involve cost-sharing. Prescription medications needed during recovery, including pain management and antibiotics, typically require copayments if the beneficiary has Part D prescription drug coverage.

• Part A inpatient deductible: $1,632 (2024) covers one benefit period
• Part B annual deductible: $240 (2024), applies across all services
• Coinsurance for hospital care: $0 for days 1-60, $408 per day for days 61-90
• Physician and surgical coinsurance: 20% of approved charges after Part B deductible
• Skilled nursing facility coinsurance: $204 per day for days 21-100 (2024)
• DME and rehabilitation services have separate cost-sharing arrangements

Practical Takeaway: Create a spreadsheet tracking all anticipated out-of-pocket costs by contacting your surgeon's office for estimated charges, your hospital's billing department for facility charges, and Medicare's online resources for current deductible amounts. This preparation helps prevent billing surprises and allows you to budget appropriately for recovery expenses.

Supplemental Insurance and Medicare Advantage Plan Options

Many Medicare beneficiaries purchase supplemental insurance, commonly called Medigap policies, to help manage out-of-pocket costs associated with major surgical procedures like knee replacement. Medigap policies are standardized plans labeled A through N, each offering different levels of coverage for cost-sharing amounts that Original Medicare does not cover. For knee replacement specifically, plans that cover higher percentages of deductibles and coinsurance can substantially reduce financial burden.

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Medigap Plan G covers approximately 80 percent of the Part B deductible and all coinsurance amounts after the deductible is satisfied. This means if a knee replacement results in $10,000 in approved Part B charges, Plan G would cover the remaining coinsurance after the beneficiary pays the Part B deductible. Plans F and G represent the most comprehensive Medigap options, though Plan F is no longer available to beneficiaries who became eligible for Medicare on or after January 1, 2020. Plan N also offers substantial coverage, though it includes some copayments for certain services.

Alternatively, many beneficiaries choose Medicare Advantage Plans (Part C), which are offered by private insurance companies approved by Medicare. These plans must cover all services that Original Medicare covers, but they often include additional benefits not found in Original Medicare, such as dental, vision, hearing, and fitness programs. Medicare Advantage plans typically have lower monthly premiums than many Medigap policies, but they may have higher out-of-pocket costs through deductibles and copayments. As of 2023, approximately 28 percent of Medicare beneficiaries were enrolled in Medicare Advantage plans, reflecting the growing popularity of this coverage option.

• Medigap policies help cover deductibles, copayments, and coinsurance not paid by Medicare
• Plan G and Plan N offer comprehensive coverage for surgical procedures
• Medicare Advantage plans include additional benefits and may have lower monthly premiums
• Advantage plans often feature provider networks requiring use of in-network surgeons and hospitals
• Open enrollment periods determine when coverage changes can be made
• Prescription drug coverage (Part D) can be combined with Original Medicare or included in Advantage plans

Practical Takeaway: Compare specific Medigap and Medicare Advantage plan options by using Medicare's Plan Finder tool at Medicare.gov. For knee replacement surgery, estimate your total anticipated charges and calculate how each plan option would split costs between you and the insurance program, allowing you to make an informed financial decision.

Navigating the Pre-Authorization and Approval Process

Before undergoing knee replacement surgery, Medicare and many supplemental insurance plans require documentation that the procedure is medically necessary. This pre-authorization process involves your orthopedic surgeon submitting detailed medical records, imaging studies (such as X-rays or MRI scans), documentation of conservative treatment attempts, and a clinical justification for surgery. Medicare's Local Coverage Determinations (LCDs) outline specific criteria that must be met for knee replacement to be considered medically necessary in your geographic region.

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The pre-authorization timeline typically spans 1-2 weeks from initial submission to approval decision. Your surgeon's office usually manages this process, but it remains important to understand what information Medicare is requesting. For knee replacement, Medicare generally requires evidence that the beneficiary has experienced a trial of conservative treatment