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Observation Status and Hospitalizations: What’s The Deal?


observation_status_hospitalSo, You’ve been admitted to the hospital. Are you considered “inpatient” or are you on “observation status”?

Hospitals have been increasing their use of the observation status with Medicare patients because Medicare penalizes hospitals for readmission of a patient with the same condition within thirty days. Medicare may not pay a hospital for a patient that has been admitted that they feel should have been on observation status.

Observation is when you are in the hospital for up to 23 hours maybe longer, receiving care, treatments and tests but are never actually admitted. You can be moved from the ER to a hospital room in a hospital bed and may still be considered observation status.

Medicare does not require hospitals to let you know what your status is, so it is important to ask.  If your attending doctor does not give you a clear answer, request to speak with a discharge planner or someone from admissions

A Medicare client on observation will be required to pay their bill under outpatient services because of this their hospital visit is not covered under Medicare Part A which pays for an admitted hospital stay after the deductible. Services would be billed under Medicare Part B requiring 20% of the cost to be paid by the patient and imposes no cap on the expenditures.

Observation patients also pay for the medication they receive in the hospital. If you have Medicare D you can file for reimbursement, but stand little chance of a refund if their Medicare D plan does not cover the medication received or if the hospital is out of their network.

It is important to note that a Medicare patient that may need rehabilitation must have 3 consecutive midnight stays in the hospital as an admitted patient to be covered under Medicare while in a skilled nursing facility. Many patients not admitted but on observation status while in the hospital are finding themselves in a skilled nursing facility for rehabilitation having to pay out of pocket.

If you or a loved one on Medicare will need rehabilitation in a skilled facility after discharge you should ask the doctor to help get you on admitted status before discharge. After discharge it is very hard to get a change made.

If you find this has happened to you, you can call the Medicare Advocacy Group at 860-456-7790.

Photo Credit: Alex E. Proimos via Compfight cc

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