Understanding the difference between “observation” & “in-patient” for Medicare members.
You are experiencing a medical issue. It seems pretty bad ,but your not sure. So off you go to the local hospital. You enter through the E.R. and your right, there’s something going on but it does not seem to be life threatening. Vital signs seem to be ok now, there’s no life threatening issue at the moment, so let’s get you in a room to keep an eye on you.
Are you technically admitted to the hospital at this time? Well, the answer is it depends.
While it can be confusing to determine, most people believe that if I am in the hospital for over 24 hours I am admitted, but that’s not necessarily true. Whenever there is not sufficient clinical evidence there is an immediate medical need, you may be placed in observation. This gives medical staff a little time to evaluate how well you are doing, could include running test and to just make sure there is not a more pressing medical issue at hand.
So why does it matter? It matters because Medicare and Medicare Advantage plans respond differently on HOW they cover observation vs. in-patient care. While in-patient care is typically subject to one deductible or co pay, observation is treated as out patient benefits. This is commonly known as Part A under traditional Medicare. In the case of observation, the benefits typically fall under Part B of Medicare and can be subject to individual charges that can really rack up, such as diagnostic testing, X-rays, advanced imaging and so on.
How will I know? Dialogue between you and your provider is important. Ask the question, “am I being admitted or is this observation?” We are seeing some insurers taking a proactive approach and notifying patients with a short time period of the visit. Several insurers are now beginning to issue Medicare Outpatient Observation Notices (MOON) to help clear up confusion many patients are having with this issue.
Have questions? Check out www.medicare.gov, call the member services number on your medical card or call us! We can’t answer specific claim or billing questions, but we can always guide you.