Does Medicare cover knee replacement surgery in Peoria, AZ?
The surgery is covered. What it costs you depends on whether the hospital books you as an inpatient or an outpatient, and since 2018 that has stopped being obvious. Here is what each one costs in 2026, what it does to the rehab afterward, and the questions to ask before your date is set.
Yes — Medicare covers total knee replacement when your doctor documents it as medically necessary, and that is the ordinary case for arthritis that has stopped responding to injections and therapy. The surgery is not the hard part of this question. What you pay is, because it turns on a single word in your chart that nobody at the front desk will volunteer: inpatient or outpatient.
Get admitted as an inpatient and your hospital share for the whole stay is the Part A deductible, $1,736. Get booked as an outpatient — which, since 2018, over half of Medicare knee replacements now are — and you are in Part B, paying the $283 deductible and then 20% of the approved amount, with no annual limit behind it on Original Medicare.
That same word decides something bigger than the bill. It decides whether Medicare will pay for a rehab stay afterward.
Which part of Medicare pays for the surgery?
Both, depending on how the hospital books it.
For decades the answer was simple, because total knee arthroplasty sat on Medicare’s inpatient-only list — a list of procedures CMS would pay for only as an admission. CMS took knee replacement off that list effective January 1, 2018, and added it to the ambulatory surgical center list in 2020. Research published since found that more than half of Medicare knee replacement patients are now classified as outpatients.
Nothing about the operation changed. The anesthesia is the same, the implant is the same, and you may well still spend a night in the building. What changed is the billing category, and Medicare pays outpatients and inpatients under two different rulebooks.
| Booked as inpatient | Booked as outpatient | |
|---|---|---|
| Which part pays | Part A (hospital) | Part B (medical) |
| Your deductible | $1,736 per benefit period | $283 per year, once |
| After the deductible | $0 for days 1–60 of the stay | 20% of the approved amount, facility and surgeon |
| Is there a ceiling? | Yes, until day 60 | No. Original Medicare has no out-of-pocket maximum |
| Surgeon's fee | Part B, 20% after the deductible | Part B, 20% after the deductible |
| Rehab in a skilled nursing facility | Possible, if the stay reaches three inpatient days | Not covered by Part A |
Source: Medicare.gov, "Inpatient hospital care" and "Skilled nursing facility (SNF) care". Figures are the CMS 2026 amounts.
Note the surgeon’s fee sits in Part B either way. Even a straightforward inpatient knee replacement produces two bills on two different rules, which is the single most common reason a person who “only paid the deductible” is surprised by an envelope six weeks later.
What does it actually cost me?
On Original Medicare with nothing on top, plan on the deductible plus 20% of the physician side, and more than that if it is billed outpatient. The 20% is the number that should make you sit up: twenty percent of a five-figure facility charge is not a copay, and there is no cap stopping it.
That is precisely the exposure a Medicare Supplement exists to close. Plan G pays the Part A deductible, the Part B coinsurance and the hospital coinsurance, leaving you the Part B deductible of $283 and essentially nothing else for the surgery. On a Medicare Advantage plan you are into your plan’s copay schedule instead — an inpatient per-day copay for the first few days, or an outpatient surgery copay — and everything is bounded by that plan’s annual out-of-pocket maximum, which is real protection Original Medicare alone does not give you.
Neither route is the right answer for everybody. But a knee replacement is the kind of event that makes the difference between them concrete, and it is worth knowing which side of it you are on before the date is booked rather than after. The cost of care tool and the Plan G vs Plan N comparison will both put numbers on it in a few minutes.
For the facility side specifically, Medicare publishes what it pays and what you owe by procedure code and setting in its Procedure Price Lookup. A knee replacement at an ambulatory surgical center generally leaves you a smaller share than the same procedure in a hospital outpatient department. If your surgeon operates at both — and in the west Valley several do — that is a fair question to ask, though the answer should be driven by what is medically right for you first.
The three-day rule, and why it matters more than the bill
Here is the part that costs people real money in Peoria, and it has nothing to do with the surgery.
Medicare Part A pays for a stay in a skilled nursing facility only after a qualifying inpatient hospital stay of at least three days in a row, counting from the day you are formally admitted as an inpatient and not counting your discharge day. Time in observation, in the emergency department, or as an outpatient does not count toward those three days — no matter how many nights you slept there.
Put those two facts together. A knee replacement is now often billed as outpatient. Outpatient days do not count. So if you need a week or two of skilled rehab afterward and you were never an inpatient, Part A pays nothing toward it and the facility will ask you for the private rate.
When Part A does cover it, the cost sharing runs like this:
| Days in the facility | You pay |
|---|---|
| Days 1–20 | $0 |
| Days 21–100 | $217 per day |
| Day 101 and beyond | Everything |
Source: Medicare.gov, "Skilled nursing facility (SNF) care", 2026 amounts. You do not pay the Part A deductible again if you already paid it for the qualifying hospital stay in the same benefit period.
Some Medicare Advantage plans waive the three-day requirement, which is a genuine advantage of that route — though the same plans usually require prior authorization for the stay, so a waived rule is not the same as a guaranteed bed. I have written the longer version of this in what a hospital stay under observation costs, and everything there applies here.
The practical move: ask your surgeon’s office, before the date is set, whether they expect to bill this as inpatient or outpatient, and whether they expect you to go home or to a rehab facility. Those two answers together tell you what your exposure is. Asking after the fact tells you nothing you can still act on.
What about the physical therapy?
Outpatient physical therapy is Part B: your deductible, then 20% coinsurance, for as long as the therapy is medically necessary and documented as such. The old hard therapy cap is gone. What remains is a documentation threshold — $2,480 in 2026 for physical therapy and speech-language pathology combined — past which your therapist adds a modifier attesting that continued therapy is still necessary. It is a paperwork trigger, not a stop sign, and a good clinic handles it without you hearing about it.
Home health is a different benefit again with its own rules about being homebound, and I have written about how many hours Medicare will actually pay for if that is where you are headed.
The walker, the crutches and the continuous passive motion device, if your surgeon orders one, are durable medical equipment under Part B at 20% after your deductible — from a supplier that accepts Medicare assignment, which is worth confirming rather than assuming. The shower chair, the grab bars and the raised toilet seat generally are not covered, because Medicare classifies them as convenience or safety items rather than medical equipment. Budget a couple of hundred dollars for the bathroom and be pleasantly surprised if your plan chips in.
If you are on a Medicare Advantage plan
Two extra steps sit between you and the operating room, and both are worth starting early.
Prior authorization. Nearly every Medicare Advantage enrollee is on a plan that requires prior authorization for something, and higher-cost services — inpatient stays, skilled nursing, elective surgery — are exactly what those requirements are pointed at. KFF counted almost 53 million prior authorization determinations in Medicare Advantage in 2024, of which 7.7% were denied outright or in part. Requests for skilled nursing facility stays were denied at 12%.
The detail worth carrying: of the denials, only 11.5% were appealed — and 80.7% of those appeals were fully or partially overturned. A denial is not a verdict. It is the first round, and most people who contest it win. If your surgery or your rehab stay is denied, appeal it, and ask the surgeon’s office for a peer-to-peer review while you do.
Network. The surgeon, the anesthesiologist, the facility and the rehab provider are four separate contracts. A hospital being in network does not put the anesthesia group inside it in network, and it does not put the skilled nursing facility down the road in network either. Ask about all four by name.
Original Medicare has neither problem — no prior authorization for this surgery, and any provider in the country who accepts Medicare. It costs more per month for exactly that reason.
Why this lands differently in north Peoria
Two things about this end of the Valley make the knee replacement question sharper than it is elsewhere.
The first is that a lot of people up here are the exact demographic for it. Vistancia, Trilogy at Vistancia and Westbrook Village are full of households who retired active and intend to stay that way, which is a population that wears out joints and then does something about it. This is an elective, scheduled procedure, and elective and scheduled means you have time to check your coverage first — an advantage most Medicare events do not give you.
The second is geography. North Peoria residents drive out for specialist care: Banner Thunderbird and Abrazo Arrowhead down the 101, HonorHealth’s Peoria campus, or across into Sun City where a great many practices are built around Medicare patients. So the surgeon you want and the facility that is convenient and the rehab place your family can visit are frequently three different points on the map, in three different network contracts. And on the Peoria–Glendale–Sun City ZIP seam, a plan that reaches all three from 85383 is not necessarily the plan your neighbour in 85382 was quoted.
If you are still on a plan you bought in another state before you moved here — and in the 85383 corridor that describes a lot of people — this is the surgery that will find that out for you. Worth pricing your own ZIP before it does. Medicare in Peoria has the local version, and Medicare in Glendale covers the other side of the seam.
What to do between now and December 7
If a knee replacement is on your horizon for next year, the Annual Enrollment Period that runs October 15 to December 7 is your one clean chance to change what pays for it. After December 7 the door mostly closes until the following autumn, and an operation booked in March is covered by whatever you were holding on January 1.
Three things worth doing before then:
- Get the surgeon and the facility named on paper, then check both against your plan’s current directory — not last year’s.
- Ask whether they expect inpatient or outpatient, and whether they expect you to need a rehab stay. Those answers change which route protects you.
- Read your Annual Notice of Change, which arrived by the end of September. Inpatient copays and the out-of-pocket maximum are the two lines on it that matter for this, and they are the two lines nobody reads.
The short version
- Medicare covers knee replacement when it is medically necessary, on Original Medicare and on Medicare Advantage.
- Inpatient means Part A and the $1,736 deductible. Outpatient means Part B, the $283 deductible and 20% with no cap.
- Since 2018 it is often billed outpatient, even with an overnight stay, because CMS removed it from the inpatient-only list.
- The surgeon’s fee is Part B either way — two bills, two rulebooks.
- Skilled rehab under Part A requires three inpatient days. Outpatient and observation days do not count.
- Outpatient physical therapy has no hard cap, only a documentation threshold at $2,480 for 2026.
- Medicare Advantage usually needs prior authorization — and most denials that get appealed are overturned, so appeal.
- Walkers are covered; shower chairs generally are not.
If you would rather have someone check it for you
An elective surgery is the rare Medicare event you can see coming, and that makes it the rare one you can prepare for. The review is free and takes about twenty minutes: your doctors, your prescriptions, your ZIP, and a straight look at what your current plan does if the next year involves an operating room rather than a physical.
I am not going to tell you a supplement is better than an Advantage plan or the reverse — that genuinely depends on your household, your travel, and how much certainty you want to buy. I will tell you what each one does to the bill for this particular surgery, which is a question with an actual answer.
The office is in Anthem, roughly 25 minutes from north Peoria out the Carefree Highway and down Lake Pleasant Parkway, and most of this happens by phone anyway. Call (602) 844-6002 or book a time — and if you call or text, that is your consent for me to reply the same way.
And if your date is already on the calendar: ask the question this week. Inpatient or outpatient? Everything else follows from it.
Common questions
Does Medicare cover knee replacement surgery?
Yes, when your doctor documents it as medically necessary — and that is the usual case for advanced arthritis that has not responded to conservative treatment. Both Original Medicare and Medicare Advantage plans cover total knee replacement. What differs is which part of Medicare pays and what your share works out to, and that depends on whether the hospital books the surgery as an inpatient admission under Part A or an outpatient procedure under Part B.
How much does a knee replacement cost with Medicare out of pocket?
If you are admitted as an inpatient, your hospital share for the whole stay is the Part A deductible for that benefit period. If it is billed as outpatient, you pay the Part B annual deductible and then the standard Part B coinsurance on the Medicare-approved amount for the facility and the surgeon — with no annual cap behind it on Original Medicare. A Medicare Supplement or a Medicare Advantage plan changes both figures, which is why the honest answer is that it depends on what you bought before you needed it. The current-year dollar amounts are in the table below.
How long does Medicare pay for rehab after a knee replacement?
It depends on where the rehab happens. Outpatient physical therapy has no hard limit — Medicare pays its share after your Part B deductible for as long as the therapy is medically necessary. There is an annual documentation threshold your therapist attests past, but it is paperwork rather than a cap that stops payment. A stay in a skilled nursing facility is different. Part A covers it only after a qualifying inpatient hospital stay of at least three days in a row, and observation or outpatient days do not count toward those three.
Does Medicare cover outpatient knee replacement at a surgery center?
Yes. Total knee replacement came off Medicare's inpatient-only list in 2018 and was added to the ambulatory surgical center list in 2020, so Medicare pays for it in a hospital outpatient department or a freestanding surgery center. Your share is generally lower at a surgery center than at a hospital outpatient department for the same procedure. You can look up both for your own facility in Medicare's Procedure Price Lookup tool before you schedule.
Do I need prior authorization for a knee replacement on Medicare Advantage?
On most Medicare Advantage plans, yes — and often a second one for the rehab afterward. KFF found that Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024 and denied 7.7% of them, with skilled nursing facility requests denied at 12%. Original Medicare does not require prior authorization for this surgery. If you are on an Advantage plan, ask the surgeon's office to start the authorization early and to tell you in writing when it comes back.
Will Medicare pay for a walker or a raised toilet seat after surgery?
A walker is durable medical equipment and Part B covers it at the standard coinsurance after your deductible, from a supplier that accepts Medicare assignment. A raised toilet seat, a shower chair and a grab bar are generally considered convenience or safety items rather than durable medical equipment and are usually not covered. Some Medicare Advantage plans include an over-the-counter or post-discharge benefit that helps with those, which is one of the few places that route quietly comes out ahead.