Am I admitted or in “observation status”?
Unfortunately, this question too-often arises after a patient returns home and then receives a hefty bill for services provided in the emergency room (emergency dept.). Or, needs to transfer to a skilled nursing facility for additional care and realizes Medicare won’t pay for that service.
One thinks because he/she was put in a “room” and stayed overnight in the hospital, perhaps for several days, that this means he/she was admitted. But, there is also a category called “outpatient observation status”. It can look and feel the same – you’re in the “room”, staying overnight, being served meals, visited by doctors and nurses, etc. But you’re not really admitted; you are in observation status. You’re actually an outpatient. And thus, Medicare won’t pay for some of the charges (e.g. medications) incurred while at the hospital.
Outpatient Observation Status is paid by Medicare Part B. Inpatient hospital admissions are paid by Medicare Part A. So, if a patient has Part A but does not have Part B, he/she will be held responsible for the entire hospital bill if classified as observation status.
Also, observation status does not count towards the three-day inpatient stay, required for Medicare to pay the costs of an additional stay in a skilled nursing facility for rehab. So, charges can incur when a transfer from “outpatient observation status” to the rehab facility happens. Medicare only pays for skilled nursing facility care after a three-day “inpatient hospital” stay.
So how do you know your status? ASK! And make sure you are given a definitive answer. Hospitals are supposed to give the patient an “advance beneficiary notice” if the cost of the patient’s stay rests solely on the patient due to observation status. However, the Center for Medicare Advocacy reports this is not always done. So, you must be your strongest advocate (or have one alongside you) to demand to know what your status is in the hospital – admitted as an inpatient or classified as an outpatient in observation.
For more information, visit http://www.medicareadvocacy.org/medicare-info/observation-status/