Does Medicare Cover Knee Replacement Surgery? Costs Explained

Yes. Medicare covers knee replacement surgery — total and partial — when your doctor documents that it is medically necessary. Which part of Medicare pays depends on how your surgery is billed. If you are formally admitted to a hospital as an inpatient, Part A covers the hospital stay. If your surgery is done as an outpatient procedure — at a hospital outpatient department or an ambulatory surgical center (ASC) — Part B covers it instead. Either way, you will owe deductibles and coinsurance, and the amounts for 2026 are set out below, based on Medicare.gov  and the CMS 2026 premiums and deductibles fact sheet .

This guide explains how the Part A and Part B split works, why the same operation can be billed two different ways, what Medicare looks for before it agrees a replacement is necessary, exactly what you pay in 2026, and what recovery care — rehab, skilled nursing, home health and equipment — is covered afterwards.

Knee replacement coverage at a glance

How coverage splits: Part A for the hospital stay, Part B for the surgery and doctors

Part A (hospital insurance) applies when your surgeon formally admits you to the hospital as an inpatient. It covers the facility side of the stay: the operating room, your semi-private room, nursing care, meals, medications given during the stay, and the artificial joint itself as part of the hospital’s services. Most people pay no Part A premium. Instead, you pay one deductible per benefit period — a period that starts the day you are admitted and ends once you have been out of hospital and skilled nursing care for 60 days in a row.

Part B (medical insurance) covers the professional and outpatient side. It pays for your surgeon’s fee, the anaesthetist, and any other doctors who treat you — and it does this even during an inpatient stay, because doctors bill Part B separately from the hospital. Part B is also the part that pays when the whole operation is done on an outpatient basis, and it is the part behind most other outpatient procedures too, from outpatient therapy to cataract surgery. After the annual Part B deductible, Medicare generally pays 80% of the approved amount for these services and you pay 20%.

In practice, a single knee replacement often involves both parts: Part A for the inpatient facility bill and Part B for the surgeon and anaesthetist. Understanding that split is the key to predicting your costs, because the deductible and coinsurance rules are completely different for each part.

Knee replacement no longer means an automatic hospital stay

Until recently, Medicare would only pay for a total knee replacement done on an inpatient basis. That changed in stages. CMS removed total knee arthroplasty (total knee replacement) from the inpatient-only list for 2018, which allowed the procedure to be paid as a hospital outpatient service. For 2020, CMS added it to the list of procedures Medicare covers in ambulatory surgical centers. Today, a large share of Medicare knee replacements are outpatient procedures, and many patients go home the same day.

Whether your surgery counts as inpatient or outpatient is a medical decision made by your surgeon and the hospital, usually guided by the “two-midnight rule” — an expectation that you will need hospital care spanning at least two midnights supports inpatient admission. The catch is that spending a night in a hospital bed does not make you an inpatient. If the hospital keeps you under observation status, you are legally an outpatient the whole time, even if you stay two nights. Part B then pays instead of Part A, you owe a copayment for each service rather than one deductible, and — critically — those observation days do not count toward the qualifying hospital stay Medicare requires before it will pay for skilled nursing care afterwards. Medicare explains the distinction on its page about how inpatient or outpatient hospital status affects your costs .

Two practical protections exist. First, the copayment for a single outpatient hospital service generally cannot exceed the Part A inpatient deductible. Second, if you receive observation services for more than 24 hours, the hospital must give you a written Medicare Outpatient Observation Notice (MOON) explaining your status. Before surgery, ask one direct question: “Will I be admitted as an inpatient, or placed under observation?” The answer changes both your bill and your rehab options.

When Medicare calls knee replacement medically necessary

Medicare does not cover knee replacement simply because a knee hurts, and it never covers it for cosmetic reasons. Coverage turns on documentation. Before Medicare — or its contractors, who process and review claims — accepts a replacement as medically necessary, your medical record generally needs to show:

• Advanced joint disease on imaging. X-rays or other imaging showing severe joint damage, such as bone-on-bone osteoarthritis, that matches your symptoms.
• Failed conservative treatment. A documented trial of non-surgical care that did not relieve your symptoms — typically physical therapy, anti-inflammatory or pain medication, corticosteroid injections, assistive devices such as a cane or brace, activity modification, and weight management where relevant.
• Significant pain and loss of function. Pain that limits everyday activities such as walking, climbing stairs, standing or sleeping, despite the treatments above.
• A surgeon’s assessment that you are a suitable candidate for surgery and that replacement is the appropriate next step.

There is no single national checklist or score that guarantees approval, and the exact documentation expectations can vary by Medicare contractor. What matters is that the record tells a consistent story: a badly damaged joint, real limits on your daily life, and a genuine trial of simpler treatments first. If any of those elements is missing, the claim or authorization is far more likely to be questioned or denied.

What you will pay in 2026

The figures below are the standard amounts CMS set for 2026. They change every year, and your own bill also depends on where the surgery is done and whether you have supplemental coverage, so confirm current amounts at Medicare.gov before you schedule.

A few details behind the table. Medicare classifies an outpatient total knee replacement as a “comprehensive” service: instead of separate copayments for every item, you pay 20% of the approved amount for the entire episode of care, including drugs, lab tests and related services provided with the surgery. Using national average payments, that works out to roughly $2,100 out of pocket for the surgery itself at a surgical center — and CMS estimates the overall cost of the operation is similar (within a few hundred dollars) whether it is done at a hospital or a surgical center. You can compare prices for your area with Medicare’s Procedure Price Lookup tool before choosing where to have the operation.

Two warnings belong with any cost estimate. First, Original Medicare has no yearly out-of-pocket maximum for Part B services, so the 20% coinsurance has no built-in ceiling. This is why many people pair Original Medicare with a Medigap (Medicare Supplement) policy, which can pay some or all of that 20% depending on the plan. Second, if you stay in hospital a long time because of complications, Part A coinsurance begins after day 60 ($434 per day for days 61–90 in 2026) — rarely relevant for a routine knee replacement, but part of the picture for revision or complicated cases.

Before surgery: what Medicare covers

Coverage starts well before the operation. Part B covers the medically necessary care leading up to it: consultations with your surgeon and primary care doctor, pre-operative examinations, lab tests, X-rays and other imaging, and cardiac or medical clearance when your doctor orders it. These services follow the usual Part B rules — deductible first, then 20% coinsurance. Medicare also covers a second opinion if you want another surgeon’s view before committing to a replacement. Educational “joint classes” offered by hospitals are sometimes free and sometimes billed as part of outpatient services; ask the hospital how yours is handled so there are no surprises.

Recovery coverage: rehab, skilled nursing, home health and equipment

For most people, the surgery bill is only part of the cost picture. What Medicare pays for recovery matters just as much, and each setting has its own rules. Our knee replacement recovery timeline walks through the week-by-week healing process these services support.

Inpatient rehabilitation. If you need intensive daily therapy after surgery, Part A covers care in the hospital or an inpatient rehabilitation facility as part of the same benefit period once your deductible is met.

Skilled nursing facility (SNF) care. If you need daily skilled nursing or therapy but not hospital-level care, Part A can cover a stay in a Medicare-certified skilled nursing facility — but only after a qualifying inpatient hospital stay of at least 3 days (the admission day counts; the discharge day and any observation days do not), and you generally must enter the SNF within 30 days of leaving hospital. For each benefit period in 2026, you pay $0 for days 1–20, then $217 per day for days 21–100, and all costs after day 100. Medicare sets out the conditions on its skilled nursing facility care  page. This is where observation status bites hardest: two nights in a hospital bed under observation can leave you with no SNF coverage at all.

Outpatient physical therapy. Most knee replacement patients rehab as outpatients. Part B covers medically necessary physical therapy (and occupational therapy) with the usual deductible plus 20% coinsurance. There is no fixed cap on the number of covered visits — therapy continues as long as your provider documents that it is medically necessary, although after spending passes a yearly threshold your therapist must confirm in writing that continued treatment is still necessary.

Home health care. If you are homebound and need part-time skilled care, Medicare covers home health services — including physical therapy and skilled nursing visits from a Medicare-certified agency — at $0 cost to you for the services themselves. Home health does not include 24-hour care, meal delivery, or personal care (such as bathing help) on its own.

Equipment. Durable medical equipment your doctor orders for recovery, such as a walker, is covered under Part B at 80% after the deductible. Medicare may also cover a continuous passive motion (CPM) machine — a device that slowly bends the knee for you — for up to 21 days after a total knee replacement, provided use begins within 2 days of the surgery.

Pain in new places is common while you heal; our guide to pain behind the knee after knee replacement explains which aches are typical and which need a call to your surgeon.

What Medicare does not cover

Knowing the exclusions prevents the most common billing shocks. Medicare does not pay for:

• Surgery that is not medically necessary — including replacement requested for convenience or appearance when conservative treatment has not been tried or the joint damage does not justify it.
• Private-duty nursing or a private hospital room (unless a private room is medically necessary).
• Personal comfort items, such as a television or phone in your room.
• Long-term custodial care — help with bathing, dressing and eating as an ongoing service, whether at home or in a nursing home. Medicare’s nursing coverage is for short-term skilled care only.
• Self-administered drugs you could normally take yourself, when billed during an outpatient or observation stay — a frequent surprise bill after observation care.
• Most care outside the United States, and services from providers who have opted out of Medicare (you would owe the full amount, under a private contract).

Medicare Advantage: same surgery, different rules

Medicare Advantage (Part C) plans must cover everything Original Medicare covers, including knee replacement, but they manage it differently. Most plans require prior authorization before they will agree to pay for a planned joint replacement, and your surgeon and facility generally must be in the plan’s network. Instead of the Part A deductible plus 20% coinsurance structure, you will usually owe plan copayments or coinsurance — but every plan has a yearly out-of-pocket maximum for Part A and B services (federally capped at $9,250 for in-network care in 2026), something Original Medicare does not offer. Some Advantage plans also waive the 3-day inpatient stay requirement for skilled nursing coverage, which can make recovery planning easier. From 2026, federal rules require Advantage plans to decide standard prior authorization requests within 7 calendar days and urgent requests within 72 hours, and to give a specific reason for any denial. Because copays, networks and authorization rules are plan-specific, call your plan before scheduling and get the authorization in writing.

Alternatives Medicare covers before surgery

Because Medicare expects conservative treatment to be tried first, it also covers most of those alternatives — and for some people they delay or even avoid surgery altogether. Depending on your situation, covered options can include physical therapy to strengthen the muscles supporting the knee, prescription anti-inflammatory and pain medication managed by your doctor, corticosteroid injections into the joint, hyaluronic acid (“gel”) injections, which many Medicare contractors cover for knee osteoarthritis, assistive devices such as braces, canes and walkers, and medically supervised weight management. Each follows the standard Part B deductible and 20% coinsurance rules unless provided during a covered inpatient stay. Trying these treatments is not just a box-ticking exercise for the coverage file: if they work, you may not need the operation at all.

The bottom line

Yes, Medicare covers knee replacement — total and partial — when your doctor documents that it is medically necessary: a damaged joint, pain and loss of function, and a genuine trial of non-surgical treatment first. If you are admitted as an inpatient, Part A covers the hospital stay after the $1,736 deductible (2026); if your surgery is outpatient or at a surgical center, Part B covers it after the $283 deductible plus 20% coinsurance, with the outpatient copayment for this comprehensive service capped at the Part A deductible amount. Rehab, skilled nursing, home health and basic equipment are covered too, each under its own rules — and the single most important detail to confirm before surgery is your hospital status, because observation days quietly remove your skilled nursing coverage. Check your expected costs with Medicare’s Procedure Price Lookup, and confirm the current figures at Medicare.gov or 1-800-MEDICARE before you schedule.

This article is general information about Medicare coverage rules and is not medical, legal, or financial advice. Coverage decisions are made by Medicare and its contractors based on your individual documentation, and Medicare Advantage and Medigap terms vary by plan. Talk with your doctor about your treatment and with Medicare or your plan about your coverage.