They are probably including the lesion into the synovectomy code. I have had a couple of cyclops lesions in the past and I would have bundled everything done in that compartment into the unlisted code and priced accordingly, particularly synovectomy which are typically included into other codes.
I usually do not have good luck getting unlisted codes paid when other procedures are being done at same site.
You will probably have to have your doc do a letter of medical neccessity stating why the procedure needed to be done and why he feels it is separate from the synovectomy AND they still might not pay it.
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