For those of you with Medicare Part A and Part B insurance, the following may come as a surprise to you. What I am referring to is, over the last few years, there had been an increase in the hospital admission practice of admitting patients under an outpatient “observation” status versus an “inpatient” status. While we don’t see this happening as often, it is still something to be aware of and keep fresh in your mind.
Some Medicare patients have found that after being admitted into the hospital for a few nights, they were then discharged to a skilled nursing facility and that their stay was not going to be covered under their Medicare Part A benefits because when they were admitted to the hospital, they were admitted under an outpatient “observation” status.
The difference between an outpatient “observation” status and “inpatient” status according to Medicare.gov, is that an “inpatient” status means you are formally admitted to the hospital per a doctor’s order. An “observation” status means a doctor has not written an order to admit you to the hospital. This may be the case if you are getting emergency care, observation services, outpatient surgery, lab test, x-rays, etc. Medicare.gov also states, “The decision for inpatient hospital admission is a complex medical decision based on your doctor’s judgment and your need for medically necessary hospital care. An inpatient admission is generally appropriate when you’re expected to need two or more midnights of medically necessary hospital care, but your doctor must order such admission and the hospital must formally admit you in order for you to become an inpatient.”
What does all of this mean? If you have been admitted as an “inpatient”, Medicare Part A will cover your hospital services after you have met your deductible as well as will cover eligible drugs administered as part of your inpatient treatment during a covered stay. Medicare Part A will also cover 100% for the first 20 days in an approved skilled nursing facility or rehab if the patient had spent at least three midnights in the hospital admitted as an “inpatient”. If you were classified as “observation”, Part A will not cover the services. Medicare Part B can cover your hospital services; however, a copay is required and varies depending on the service. Additionally, prescription drug coverage during an outpatient “observation” stay is not covered by Part A or Part B potentially leading to more out of pocket expenses. Medicare Part B may be used in skilled nursing facilities to cover the physician visits as well as the rehabilitative therapies prescribed.
What can you do to avoid this type of situation? AARP offers the following tips:
- Ask about your admission status each day you are in the hospital as it may change.
- Ask the hospital doctor to reconsider your case if you were admitted under an “observation” status.
- Ask your own doctor whether “observation” status is justified. If not, ask him/her to call the hospital to speak with the hospital doctor for an explanation.
For more detailed information on how Medicare covers hospital services, including premiums, deductibles, copayments, or any other questions you have about Medicare, you may reach out to Josephine Levy, our Success Matters Resource Navigator who is also a Medicare State Health Insurance Program Counselor, at x16117. You may also visit Medicare.gov/publications to view the “Medicare & You” handbook or call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.*
