** 1. without inspecting the knee joint it is hard to tell the exact diagnosis from your history, so in best interest seek an opinion of Orthopedic Doctor, [ who will take some xrays to be sure]. since it is painful it shouldn t be ignored. 2. The treatment will depends on whether it involves infection or is aseptic, prior to seeing a doctor you can treat with ice compresses, rest, and anti-inflammatory and pain medications and if sterile conditions are required [surgical] that will be performed by Doctor at his/her Clinic/Hospital. PS. since history of injury is there could be chronic bursitis: [small, tender lumps floating underneath kneecap, which are actually thickened pieces of bursa tissue , long-term treatment usually involves immobilizing the knee for an average of three weeks, followed by rehabilitation exercises that focus on restoring range of motion.