CCI/CMS has decided to change the current bundling edit status of G0289. In the 18.3 version of CCI you will see that G0289 has a status indicator 1 meaning a modifier can be used. In a letter received from CCI it states that if the surgeon is removing loose bodies in a separate compartment than the meniscectomy they can report 29881 and G0289-59. However they warned that if loose bodies are in the same compartment you can't report G0289. They also warned that you can't unbundle the chondroplasty as that is still considered bundled per CPT description of 29880/29881.
With this edit change, it will be going retro to Jan 1, 2012, so if you have not billed for your loose bodies in a different compartment, rebill. If you were denied, rebill for those DOS Jan 1, 2012