MEDICARE RATES · SURGERY CENTER VS HOSPITAL · FRANKLIN, TN
How Much Does Outpatient Knee Replacement Cost in Nashville and Franklin, TN?
The facility cost of a total knee replacement depends more on where it is done than on the surgery itself. In 2026, Medicare’s national payment to an ambulatory surgery center for a total knee replacement is $9,393, compared with $13,117 for the same operation in a hospital outpatient department. What you personally pay depends on your coverage, and for traditional Medicare patients the difference is smaller than most people expect.
On this page
THE SHORT ANSWER
The Short Answer - Three Settings, Three Prices
Ambulatory Surgery Center
(ASC)
Medicare facility payment, 2026: $9,393
Same-day surgery, home the same afternoon. This is where Dr. Cory Calendine performs most knee replacements, at the Bone and Joint Institute of Tennessee Surgery Center in Franklin, TN.
Hospital Outpatient
Department (HOPD)
Medicare facility payment, 2026: $13,117
Same surgery, same-day or one-night stay, performed in a hospital-owned outpatient department.
Hospital Inpatient
(overnight admission)
Medicare payment, 2024 published rate: about $13,800. Admitted to the hospital, typically one or more nights. Reserved for patients whose health makes an overnight stay the safer choice.
Figures are Medicare national unadjusted facility payments for CPT 27447 (total knee arthroplasty). The ASC and hospital outpatient figures are the CY 2026 rates published by CMS; the inpatient figure is the most recent published national rate (2024) because CMS publishes inpatient payment as a case weight rather than a single dollar amount. Payments in the Nashville area are adjusted for the local wage index. Surgeon, anesthesia and implant charges are described below. Sources are listed in References.
WHY THE SETTING MATTERS
Why the Same Surgery Costs Less at a Surgery Center
The operation is identical. What differs is the overhead attached to the building. A hospital carries the cost of emergency services, intensive care and 24-hour staffing across dozens of specialties, and that overhead is built into every hospital bill. An ambulatory surgery center is built and staffed for one thing: scheduled surgery on healthy patients who go home the same day.
Medicare recognizes this difference directly. It pays ambulatory surgery centers a lower facility rate than hospital outpatient departments for the same procedure code, and it pays inpatient admissions on a separate, higher scale that assumes an overnight stay. Medicare removed total knee replacement from its inpatient-only list in 2018 and added it to the list of procedures ambulatory surgery centers may perform in 2020, and a growing share of knee replacements are now done as same-day surgery.
For patients, the setting decision is made on safety first and cost second. Dr. Calendine reviews both at your consultation. See Hospital or Surgery Center for Knee Replacement in Tennessee - How to Decide for how that decision is made.
2026 MEDICARE RATES
What Medicare Pays for a Total Knee Replacement in 2026
| Setting | Medicare facility payment (national, unadjusted) | Rate year | Source |
|---|---|---|---|
| Ambulatory surgery center (CPT 27447, payment indicator J8) | $9,393.16 | 2026 | CMS ASC Payment System, CY 2026 Addendum AA |
| Hospital outpatient department (CPT 27447, APC 5115) | $13,116.76 | 2026 | CMS OPPS CY 2026 Addendum B |
| Hospital inpatient (MS-DRG 469/470) | $13,798 | 2024 (most recent published dollar figure) | CMS IPPS FY 2024, as republished in Zimmer Biomet's 2024 reimbursement update |
These are facility payments only. They do not include the surgeon's professional fee, which Medicare pays separately under Part B in every setting, or anesthesia professional fees.
Implant cost is bundled into the facility payment in all three settings.
From Dr. Calendine
“Our financial counselors go through the specifics of cost with every patient based on their individual plan, whether that’s Medicare, commercial insurance or self-pay. Nobody should be guessing at their number before surgery.”
YOUR SHARE OF THE BILL
What You Actually Pay - By Type of Coverage
Traditional Medicare (Part A and Part B)
This is where the surgery-center cost advantage is real for the system but modest for you. Here is why.
- At an ambulatory surgery center, you owe 20% coinsurance on the facility payment after your Part B deductible, with no cap. On the 2026 ASC rate of $9,393, that is about $1,879 for the facility portion.
- At a hospital outpatient department, you also owe 20%, but Medicare caps your coinsurance for any single outpatient service at the Part A inpatient deductible, which is $1,736 in 2026. So your facility share is $1,736.
- As a hospital inpatient, you owe the Part A deductible of $1,736 for the admission.
In other words, with traditional Medicare and no supplemental plan, your facility share lands between roughly $1,700 and $1,900 in all three settings. The large difference in what Medicare pays does not pass through to you. If you carry a Medigap supplement, it typically covers this coinsurance and the deductible, and your facility cost approaches zero in every setting.
The Part B deductible ($283 in 2026) and 20% of the surgeon’s fee apply in all settings and are unchanged by where the surgery is done.
Medicare Advantage
Medicare Advantage plans set their own copays and coinsurance by setting. Many plans charge a lower fixed copay for an ambulatory surgery center than for a hospital outpatient department, and most require prior authorization for knee replacement in any setting. Our team verifies your plan’s exact numbers before surgery; they vary more between plans than between settings.
Commercial insurance (employer plans, marketplace plans)
Commercial plans pay facilities a contracted amount that is usually a multiple of the Medicare rate, so the setting difference is larger in dollars than it is under Medicare. Whether that reaches you depends on your plan design: with a deductible-and-coinsurance plan, a lower facility charge usually means a lower out-of-pocket amount; with a flat surgical copay, it may not. Some commercial plans also have site-of-service rules that steer uncomplicated knee replacements away from inpatient admission. Ask your plan for the in-network allowed amount at each setting; we can supply the procedure code (CPT 27447) and facility information you will need.
Self-pay
If you are paying without insurance, the setting matters most. Ambulatory surgery centers commonly offer bundled self-pay pricing that includes the facility, anesthesia and implant. The Bone and Joint Institute of Tennessee Surgery Center can provide a written self-pay estimate on request; call (615) 791-2630 and ask for the surgery scheduling team.
READING THE BILL
What's Included in a Knee Replacement Bill - and What's Billed Separately
Included in the facility payment (all settings): operating room time, nursing, recovery room, the implant, standard supplies and medications used during surgery, and for an inpatient stay, the room and board.
Billed separately (all settings): the surgeon’s professional fee (CPT 27447), the anesthesiologist’s professional fee, pre-operative imaging and lab work, and physical therapy after surgery.
What changes at a surgery center: shorter facility time, no room-and-board component, and a single-purpose facility fee. The implant, the surgical technique and the surgeon are the same as they would be in the hospital.
Having a hip replaced instead? See what hip replacement costs.
THE SETTING DECISION
Cost Is the Second Question - Safety Is the First
From Dr. Calendine
“Our first focus is always safety. We make the setting decision on safety, and then we talk about cost.”
COST AND COVERAGE QUESTIONS
Frequently Asked Cost and Coverage Questions
Does Medicare cover outpatient knee replacement at a surgery center?
Yes. Medicare has covered total knee replacement in ambulatory surgery centers since January 1, 2020, when CMS added CPT 27447 to the ASC covered procedures list. The surgery is covered under Part B, with the standard 20% coinsurance on the facility payment.
Is knee replacement cheaper at a surgery center than at a hospital?
For the payer, yes. Medicare’s 2026 national payment to an ambulatory surgery center for a total knee replacement is $9,393, versus $13,117 for a hospital outpatient department and about $13,800 for an inpatient admission (2024 published rate). For a traditional Medicare patient, the out-of-pocket difference is small because hospital outpatient coinsurance is capped at the Part A deductible. For commercially insured and self-pay patients, the savings are usually larger.
Why isn't my Medicare out-of-pocket cost lower at the surgery center?
Because Medicare caps hospital outpatient coinsurance at the Part A inpatient deductible ($1,736 in 2026), and ASC coinsurance is a flat 20% of a lower rate. The two land within a couple hundred dollars of each other. Most Medigap plans cover this coinsurance entirely, in which case your facility cost is near zero in either setting.
What does the surgeon's fee cost, and is it different at a surgery center?
The surgeon’s professional fee is billed separately from the facility in every setting and does not change based on where the surgery is performed. Under traditional Medicare you owe 20% of the approved amount after the Part B deductible.
Are implant costs extra?
No. The implant is included in the facility payment in all three settings. It is not a separate charge to you.
Do commercial insurance plans pay less for surgery-center knee replacement?
Usually. Commercial plans pay facilities a contracted amount, typically a multiple of the Medicare rate, so the setting difference is larger in dollars than under Medicare. Whether that lowers your bill depends on your plan’s deductible, coinsurance and copay structure.
PRACTICE AND LOCATION QUESTIONS
Frequently Asked Practice and Location Questions
Where does Dr. Calendine perform outpatient knee replacement?
At the Bone and Joint Institute of Tennessee Surgery Center, 3000 Edward Curd Lane, Suite 100, Franklin, TN 37067, on the Williamson Medical Center campus, about 20 miles (25 minutes) south of downtown Nashville on I-65, Exit 65. The center is accredited by The Joint Commission and serves patients from Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Columbia and Murfreesboro. When an overnight stay is the safer option, surgery is performed at Williamson Medical Center next door.
Can I get a written cost estimate before surgery?
Yes. Our team verifies your benefits and provides an estimate of your expected out-of-pocket cost before your surgery date. Self-pay patients can request a bundled written estimate from the surgery center. Call (615) 791-2630.
References
- Centers for Medicare & Medicaid Services. Ambulatory Surgical Center Payment System, CY 2026 ASC Covered Surgical Procedures and Payment Rates, Addendum AA (January 2026 file dated February 5, 2026; July 2026 update dated July 8, 2026): CPT 27447, total knee arthroplasty, $9,393.16. cms.gov
- Centers for Medicare & Medicaid Services. Hospital Outpatient Prospective Payment System, CY 2026 Addendum B (January 2026 file dated December 29, 2025): CPT 27447, APC 5115, $13,116.76; copayment capped at the inpatient deductible of $1,736.00. cms.gov
- Centers for Medicare & Medicaid Services. CY 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System Final Rule (CMS-1834-FC), fact sheet. cms.gov
- Centers for Medicare & Medicaid Services. 2026 Medicare Parts A & B Premiums and Deductibles (Part A deductible $1,736; Part B deductible $283). cms.gov
- 42 CFR 419.41, outpatient copayment capped at the inpatient deductible. ecfr.gov
- Medicare.gov. Ambulatory surgical centers coverage (20% coinsurance after the Part B deductible). medicare.gov
- Zimmer Biomet. Calendar Year 2024 Outpatient Payment Changes (CY 2024 national unadjusted Medicare inpatient payment for MS-DRG 469/470, from the CMS FY 2024 IPPS final rule). zimmerbiomet.com (PDF)
- Zimmer Biomet. New Medicare Policy Allows Payment to ASCs for Total Knee Arthroplasty (effective January 1, 2020). zimmerbiomet.com (PDF)
This page describes Medicare national payment rates and general coverage rules for educational purposes. It is not a quote. Your cost depends on your plan, your deductible status and the local wage-index adjustment. Our team provides an individual estimate before surgery.
SCHEDULE A CONSULTATION
Ready to Talk Through Your Options?
Schedule a consultation for knee replacement at the Bone and Joint Institute of Tennessee, 3000 Edward Curd Lane, Franklin, TN 37067. Dr. Calendine will review your X-rays, your health and your goals, and tell you which setting is right for you and what to expect on the bill.
Related: Surgery Center for Joint Replacement Near Nashville
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I had a setback regarding my photo ID/Dr License were expired however I am in process of getting them renewed when I get new state Identification card They will apply it to my chart file.