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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that arthroscopy is a surgical procedure that allows the direct visualization of the interior joint 
space.   In addition to providing visualization, arthroscopy enables the process of joint cleansing through the 
use of lavage or irrigation.  Lavage alone may involve either large or small volume saline irrigation of the knee 
by arthroscopy.  Although generally performed to reduce pain and improve function, current practice does not 
recognize the benefit of lavage alone for the reduction of mechanical symptoms.  Arthroscopy also permits the 
removal of any loose bodies from the interior joint space, a procedure termed debridement.  Debridement, 
when used alone or not otherwise specified, may include low volume lavage or washout.  Osteoarthritis is a 
chronic and painful joint disease caused by degeneration.  The American College of Rheumatology defines a 
patient diagnosis of osteoarthritis of the knee as presenting with pain, and meeting at least 5 of the following 
criteria: 
 
    Over 50 years of age; 
    Less than 30 minutes of morning stiffness; 
    Crepitus (noisy, grating sound) on active motion; 
    Bony tenderness; 
    Bony enlargement; 
    No palpable warmth of synovium; 
    ESR less than 40mm/hr; 
    Rheumatoid Factor less than1:40; or, 
    Synovial fluid signs. 
 
 B. Nationally Noncovered Indications 
 
The clinical effectiveness of arthroscopic lavage and arthroscopic debridement for the severe osteoarthritic 
knee has not been verified by scientifically controlled studies.  After thorough discussions with clinical 
investigators, the orthopedic community, and other interested parties, CMS determines that the following 
procedures are not considered reasonable or necessary in treatment of the osteoarthritic knee and are not 
covered by the Medicare program: 
 
    Arthroscopic lavage used alone for the osteoarthritic knee; 
    Arthroscopic debridement for osteoarthritic patients presenting with knee pain only; or, 
    Arthroscopic debridement and lavage with or without debridement for patients presenting with severe 
osteoarthritis ((Severe osteoarthritis is defined in the Outerbridge classification scale, grades III and IV. 
Outerbridge is the most commonly used clinical scale that classifies the severity of joint degeneration of the 
knee by compartments and grades. Grade I is defined as softening or blistering of joint cartilage.  Grade II is 
defined as fragmentation or fissuring in an area <1 cm.  Grade III presents clinically with cartilage 
fragmentation or fissuring in an area >1 cm.  Grade IV refers to cartilage erosion down to the bone.  Grades III 
and IV are characteristic of severe osteoarthritis.) 
  
 C. Other 
 
Apart from the noncovered indications above for arthroscopic lavage and/or arthroscopic debridement of the 
osteoarthritic knee, all other indications of debridement for the subpopulation of patients without severe 
osteoarthritis of the knee who present with symptoms other than pain alone; i.e., (1) mechanical symptoms that 
include, but are not limited to, locking, snapping, or popping (2) limb and knee joint alignment, and (3) less 
severe and/or early degenerative arthritis, remain at local contractor discretion.   Medicare contractors may 
require submission of one or all of the following documents to define the patient?s knee condition: 
 
    Operative notes, 
    Reports of standing x-rays, or, 
    Arthroscopy results. 
 
You can find this information in Medicare's National Coverage Determination (NCD) for Arthroscopic Lavage 
and Arthroscopic Debridement for the Osteoarthritic Knee (150.9). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.