subject: Medicare – What Is "Under Observation"? [print this page] Medicare What Is "Under Observation"? Medicare What Is "Under Observation"?
By definition Medicare Part A covers a portion of the inpatient care in a hospital or in a skilled nursing facility if the patient needs this care after at least a three-day stay in a hospital. The Medicare web site devotes a section describing Part A coverage, specifically differentiating between an inpatient and an outpatient stay in a hospital. Patients pay a larger percent of an outpatient hospital stay.
Quoting directly from this government source (bold print theirs): "Staying overnight in a hospital doesn't always mean you're an inpatient. Always ask if you're an inpatient or an outpatient."
Hospitals have now added a new outpatient category called Under Observation.
Case Study
On September 10, 2010, The Washington Post reported that an 85 year-old lady fell, broke four ribs and entered a hospital in Silver Spring, Maryland. She spent six days there and was transferred to a skilled nursing facility. Most of us would agree that she had met the criteria for Medicare Part A to cover its promised portion of her hospital and nursing home stay.
However, her claim for nursing home care was denied because she did not have the required three days of inpatient hospital care. Since she did not require any treatment while hospitalized, the hospital claimed that she was "under observation" during her stay.
"Under observation" means short-term treatment and tests to decide if the patient should be admitted for inpatient treatment. Under observation hospitalization typically involves a stay of 24 to 48 hours and is technically considered to be outpatient status. In this case, the patient spent six days as an outpatient; she had never been admitted.
The bottom line is this 85 year-old lady was responsible for the full amount of her nursing home stay, over $10,000, and she's not alone in this predicament. Medicare processed over 1.1 million claims for observation care in 2009. In over 83,000 cases the duration of observation care exceeded forty eight hours.
When Is Inpatient Care Warranted?
The classification of a patient's status as inpatient or outpatient is often determined simply "by the numbers" either through a computerized tool or possibly by a physician who has not even treated the patient. In some cases a patient's status can change from day to day during the hospital stay.
If you are on Medicare or caring for someone who is covered by Medicare, be sure to understand their hospital status as in inpatient or outpatient.
