Background: Arthroscopic partial meniscectomy (APM) is extensively used to relieve pain in patients with symptomatic meniscal tear (MT) and knee osteoarthritis (OA). Recent studies have failed to show the superiority of APM compared to other treatments. We aim to examine whether existing evidence is sufficient to reject use of APM as a cost-effective treatment for MT+OA. Methods: We built a patient-level microsimulation using Monte Carlo methods and evaluated three strategies: Physical therapy ('PT') alone; PT followed by APM if subjects continued to experience pain ('Delayed APM'); and 'Immediate APM'. Our subject population was US adults with symptomatic MT and knee OA over a 10 year time horizon. We assessed treatment outcomes using societal costs, quality-adjusted life years (QALYs), and calculated incremental cost-effectiveness ratios (ICERs), incorporating productivity costs as a sensitivity analysis. We also conducted a value-of-information analysis using probabilistic sensitivity analyses. Results: Calculated ICERs were estimated to be $12,900/QALY for Delayed APM as compared to PT and $103,200/QALY for Immediate APM as compared to Delayed APM. In sensitivity analyses, inclusion of time costs made Delayed APM cost-saving as compared to PT. Improving efficacy of Delayed APM led to higher incremental costs and lower incremental effectiveness of Immediate APM in comparison to Delayed APM. Probabilistic sensitivity analyses indicated that PT had 3.0% probability of being cost-effective at a willingness-to-pay (WTP) threshold of $50,000/QALY. Delayed APM was cost effective 57.7% of the time at WTP = $50,000/QALY and 50.2% at WTP = $100,000/QALY. The probability of Immediate APM being cost-effective did not exceed 50% unless WTP exceeded $103,000/QALY. Conclusions: We conclude that current cost-effectiveness evidence does not support unqualified rejection of either Immediate or Delayed APM for the treatment of MT+OA. The amount to which society would be willing to pay for additional information on treatment outcomes greatly exceeds the cost of conducting another randomized controlled trial on APM.