How are Hospital Observation Services Covered?
There could be a big difference in what you pay for a hospital stay depending on how it is covered via Original Medicare or a Managed Medicare Plan. It is all dependant on how your carrier classifies the stay and the services received. Your carrier may classify a hospital stay as either inpatient or outpatient even if you stay overnight.
Inpatient Hospital Stay Classification
If your doctor's order admits you into a hospital for a stay, it is deemed "inpatient". Inpatient stays are billed under Medicare Part A coverage and may be subject to a deductible. Some individuals may find themselves having an extended stay at the hospital even without a doctor's order, this would be considered an outpatient stay in the eyes of Medicare. Observation services are defined by medicare as outpatient as well, and will be subject to Part B Medicare coverage of the beneficiary. This could lead to higher costs for the individual that exceed what would be paid for with the Part A deductible of an inpatient stay. These Part B costs could include co-pays/co-insurance for each and every outpatient service received during the stay.
Inpatient Vs. Outpatient Skilled Nursing Coverage
Inpatient vs outpatient hospital stays can also effect skilled nursing coverage received. Medicare will only cover a skilled nursing service if you have a qualifying inpatient hospital stay of 3 or more consecutive days. This means that if someone is receiving observational care as opposed to inpatient care, Medicare may not cover your skilled nursing facility care. It is extremely important for you to ask your doctor or the appropriate hospital staff if your Medicare coverage will pick up a skilled nursing stay, this will help you determine just how much you will be asked to pay out of pocket.
