Did you know that under Medicare it's possible to spend the night in the hospital, but still be considered to be receiving only outpatient care? That's right. Your doctor could admit you as either hospital observation status or inpatient care status, and that status can affect how Medicare pays your claims and whether you are eligible for follow-up care in a skilled nursing facility. Hi, there. I'm Danielle Kunkle Roberts, Co-founder and Medicare Expert here at Boomer Benefits. Today, I'll discuss what you should know about your Medicare benefits and hospital observation.
Observation care is the term used by Medicare for services provided to patients who aren't sick enough to be admitted but can't be safely sent home right away either. As a patient, it's hard to tell the difference between observation care, which is outpatient care, and actual hospital admission, which is inpatient care. You're in a hospital room at a hospital bed, getting tests and nursing care, and even medications. You may even be in an intensive care unit or in other specialized floor. You may spend the night and perhaps even 2, since observation status can last as long as 48 hours. Fewer than 24 hours, however, is the norm. The only difference between observation care and inpatient care is that your doctor hasn't formally admitted you. He hasn't written orders to make you an inpatient. There may be many reasons for this. Imagine you're having chest pain and you go to the ER. Your lab tests don't show signs of a heart attack, but your EKG is mildly abnormal.
Because you have several cardiac risk factors, your doctor sends you to the telemetry unit overnight for monitoring and additional lab work. The doctor isn't comfortable sending you home right away, even though you don't appear to actually be having a heart attack, but you don't meet the standards for admission because you aren't acutely ill or actively having a cardiac event. Or imagine that you have a colonoscopy at your hospital's outpatient surgery center, everything goes well, but you have a reaction to the anesthesia and you feel groggy and sick to your stomach after the procedure. Your doctor decides to keep you overnight to make sure that there's no underlying medical problem. So, you can't really go home in your current condition, but there's nothing suggesting a serious complication at the moment. Observation care helps your doctor determine the safest course of action under the circumstances. This is the part that gets confusing. If you're getting observation care, it's considered outpatient care under Medicare, even though you are in the hospital. However, outpatient care is covered by Part B, not your Part A hospital insurance, and Part B will cover your observation status at only 80%. That means that you pay the other 20% under Part B for services that would have been covered at 100% after your deductible under Part A if you had been formally admitted.
For example, if your doctor orders X-rays or lab tests while you're under observation care, you have to pay your 20% share amount under Part B. If you had actually been admitted to the hospital instead, Part A would cover those costs at 100%. Again, your deductible applies. It also means that maintenance medications or prescription drugs that you normally take at home aren't covered at all unless you have a Part D prescription drug plan. Many hospitals have policies that don't allow patients to bring prescription drugs from home. So, now you have to pay out of pocket for these drugs and submit a claim for your drug plan later on for a refund. So, you can see that all of these things can make observation care more expensive out of pocket than an actual inpatient admission, especially if you don't have a Medigap plan in place that covers that other 20% coinsurance.
Other than the financial issues I've already outlined, there's another important consideration when it comes to observation care. Observation care doesn't count towards your hospital stay requirement if your doctor recommends skilled nursing home care. Part A covers up to 100 days in a skilled nursing facility, but only if you have a qualifying hospital stay. In order to get skilled nursing facility benefits, you must be a hospital inpatient for at least three days before you're transferred to the skilled nursing facility. Observation days aren't included in the qualifying stay requirement. Let's look at the chest pain example again. Imagine that during your day of observation care, your doctors discover you have a blocked artery and you need a stent to open it up. Your doctor admits you for stent surgery, and two days after the procedure, he refers you to a skilled nursing facility for cardiac rehab. In this case, you don't meet the qualifying stay requirement for Medicare to cover your skilled nursing care. Although you are technically in the hospital for three days, you are only an inpatient for two days, the first one was an outpatient under observation. Now, Medicare won't pay for your care at the skilled nursing facility, which is quite expensive. Moral of the story, always ask questions upfront.
When you are getting care at a hospital, ask the doctor and the other staff whether you have been formally admitted. And if you do get transferred to a skilled nursing facility for follow-up care, ask the admitting staff if Medicare is covering your stay. Now, let's say that you do ask and you get the unwelcome news that you are only considered under observation status. The hospital does have some responsibility to notify you of this. If you've been under observation for 24 hours, the hospital must give you a Medicare outpatient observation notice. In this notice, the hospital has to explain why you're under observation and how observation status affects you financially. Although you can't appeal the observation status to Medicare, you can help protect yourself from getting dinged by this issue between hospital observation and Medicare. Follow these steps.
One, talk to your doctor and ask him to admit you as an inpatient. Two, if your doctor won't admit you, ask the hospital for a written notice explaining why they insist on observation status. Three, tell the hospital you want documentation from the doctor showing why admission isn't medically necessary. Even though you can't appeal the Medicare outpatient observation notice, you may appeal your hospital care after the hospital discharges you. You'll need to talk to your doctor as soon as you've received your notice to get support for your future appeal. Make sure your doctor is aware of the potential issue with hospital observation and Medicare. Hospital observation and Medicare is tricky. Who ever thought there would be such a price tag attached to inpatient versus outpatient care? Did you know that Boomer Benefits clients can simply call us from the hospital? We'll walk you through exactly what you need to do to find out your status and act accordingly. Our client service team provides free backend support for all of our Medigap and Medicare advantage policyholders. Wanna learn more about what Medicare covers? Check out this video right here.