Open posterior knee capsulotomy performed to release a flexion contracture by dividing the posterior joint capsule and restoring the patient's ability to fully extend the knee.

Verified May 8, 2026 · 6 sources ↓

Medicare: $760.54
Total RVUs: 22.77
Global, days: 90
Region: Knee

Drawn from CMSAAOSAAPCMdclarity

Documentation requirements

What must appear in the operative or office note to support the claim.

Source · Editorial brief grounded in 6 cited references ↓

Preoperative diagnosis confirming flexion contracture with objective range-of-motion measurements (degrees of extension deficit)
Operative note specifying the surgical approach and confirmation that the posterior joint capsule was incised — not just debridement or soft-tissue release
Documentation of failed or inadequate conservative treatment (PT, serial casting) prior to surgical intervention
Post-operative assessment of extension gain achieved at closure, recorded in the operative note
Laterality explicitly stated (right, left, or bilateral) in both the operative note and the claim
If modifier 22 is appended, a separate paragraph in the operative note quantifying the substantially increased work and why (e.g., severe scarring, revision setting)

Applicable modifiers

Modifiers commonly billed with this code.

Source · AMA CPT modifier descriptors · CMS NCCI Policy Manual

22 Increased complexity 24 Unrelated E/M during global 25 Significant separate E/M 50 Bilateral procedure 51 Multiple procedures 57 Decision for surgery 58 Staged or related 59 Distinct service 76 Repeat, same physician 78 Unplanned return — related 79 Unrelated during global LT Left side RT Right side

What this code covers

Source · Editorial summary grounded in 6 cited references ↓

CPT 27435 describes an open surgical procedure in which the surgeon incises the posterior capsule of the knee joint to correct a flexion contracture — a pathologic tightening that prevents full knee extension. The approach is open (not arthroscopic), distinguishing it from arthroscopic capsular release codes. The procedure addresses the mechanical restriction at the capsular level, not tendinous or ligamentous structures separately.

This code carries a 90-day global period, meaning all routine pre- and post-operative care through day 90 is bundled into the reimbursement. Any E/M visit on the day of surgery where the decision for surgery was made requires modifier 57. Unrelated E/M services during the global window require modifier 24. If a staged follow-on procedure is anticipated and documented in the operative note, bill the return surgery with modifier 58.

Bilateral procedures are uncommon but possible. On the professional side, report modifier 50 on a single claim line. In the ASC setting, split to two lines with LT and RT per NCCI bilateral reporting rules. When 27435 is performed alongside other knee procedures on the same day, modifier 51 applies to the secondary procedure — confirm NCCI PTP edits for specific code pairs before submitting, and append modifier 59 only when the procedures are genuinely distinct and separately documented.

RVU & reimbursement

Component RVUs and Medicare national rate. Actual payment varies by GPCI locality.

Source · CMS Physician Fee Schedule, RVU26A · January 2026

Work RVU	10.61
Practice expense RVU	9.95
Malpractice RVU	2.21
Total RVU	22.77
Medicare national rate	$760.54
Global period	90 days

Payment by site of service

Medicare pays different rates by setting. HOPD typically pays substantially more than ASC for the same procedure.

Source · CMS OPPS Addendum B·ASC HCPCS payment rates·2026

Setting	Medicare rate (national)
Office (PFS non-facility) Procedure performed in physician's office	$760.54
HOPD (APC 5113) Hospital outpatient department	$3,342.87
ASC (PI A2) Ambulatory surgical center (freestanding)	$1,644.87

Common denial reasons

The recurring reasons claims for CPT 27435 get rejected.

Source · Editorial brief grounded in CMS NCCI edits, AAOS coding appeals, and cited references ↓

Missing or vague laterality — claim submitted without LT/RT modifier triggers automated rejection at many payers
Bundling denial when 27435 is billed same-day with another knee procedure and modifier 59 is absent or unsupported by documentation of distinct services
Medical necessity denial due to absent documentation of conservative treatment failure before open capsulotomy
Global period conflict — E/M or post-op visit billed without modifier 24 or 25 during the 90-day global window
Incorrect approach: submitting 27435 for an arthroscopic capsular release, which does not map to this open code

Frequently asked questions

Source · Generated from the editorial pipeline, verified against 6 cited references ↓

01Is 27435 an arthroscopic or open code?

Open only. If you performed an arthroscopic posterior capsular release, 27435 does not apply. Use the appropriate arthroscopic knee code. Submitting 27435 for an arthroscopic approach is a miscoding that will not survive audit.

02What modifier do I use if I decide to perform the surgery at the same E/M visit?

Append modifier 57 to the E/M code, not to 27435. Modifier 57 applies when the decision for a major surgery (90-day global) is made at the visit on the day of or the day before the procedure. It allows the E/M to be paid separately from the surgical global.

03Can I bill 27435 with another knee procedure on the same day?

Yes, if the procedures are distinct and separately documented. Append modifier 51 to the lower-value procedure. Check NCCI PTP edits for the specific code pair before submitting — some pairs require modifier 59 to bypass the bundle, and that requires documentation supporting separate, distinct services.

04How do I handle a bilateral posterior capsulotomy on the same date of service?

On a professional claim, report 27435 once with modifier 50. In the ASC, report two lines — one with LT, one with RT — each with one unit of service. This is an NCCI bilateral reporting rule, not payer preference.

05The patient returns to the OR during the 90-day global for a related knee complication. What modifier applies?

Modifier 78 — unplanned return to the OR for a procedure related to the original surgery during the global period. Do not use modifier 79 here; that is for unrelated procedures. Using 79 when the return is clearly related is a common and auditable error.

06What ICD-10 diagnosis codes typically pair with 27435?

Flexion contracture of the knee (M21.261/M21.262 for right/left) is the primary diagnosis. Stiffness following prior surgery or injury (M96.89, M25.661/M25.662) may also apply depending on etiology. Confirm specificity matches the operative and clinical documentation.

Sources & references

Editorial content was developed using the following public sources. Last verified May 8, 2026.

Mira AI Scribe

Mira's AI scribe captures the posterior capsule incision site, the measured pre- and post-release extension deficit in degrees, the surgical approach narrative, and the laterality directly from dictation. This prevents the two most common 27435 audit flags: operative notes that describe only 'knee capsular release' without specifying the posterior capsule, and claims submitted without laterality modifiers.

See how Mira captures CPT 27435 documentation