Knowing how your Medicare coverage applies is essential, especially if you’re a patient in the hospital. There are differences between Medicare coverage for inpatient vs. outpatient vs. under observation.
Each status can determine whether Part A or Part B of your Medicare plan will help pay costs. These differences will also decide whether you have coverage for a skilled nursing facility stay.
To better understand these terms and how each status works, keep reading!
Medicare Coverage for Inpatient vs Outpatient vs Under Observation
Many people ask, “what is inpatient vs. outpatient?”
Inpatient care means you’re admitted to the hospital on a doctor’s order. As soon as your admission occurs, you’re an inpatient care recipient.
For example, when you visit the Emergency Room (ER), you’re initially outpatient, because admission to the hospital didn’t happen.
If your visit results in a doctor ordering admission to the hospital, then your status becomes inpatient. The care you get is inpatient until discharge.
Despite a stay in the hospital, your care may be outpatient if you’re getting outpatient care on the same day of discharge. Even if you spend the night in the hospital, you could be outpatient.
When the doctor orders observation or tests to help with the diagnosis, you remain outpatient until inpatient admission.
Outpatient is when you get care without admission or have for a stay of fewer than 24 hours, even if overnight.
Health services you get a facility can be outpatient care.
Does Medicare Pay for Observation
Under outpatient observation status, Part B pays. Therefore, if you only have Part A, you’ll be responsible for all of your medical bills if under observation.
When “under observation,” the doctor must monitor you to decide whether on admission; this is a form of outpatient care.
If the doctor decides to admit you to the hospital for treatment, that’s when you will transition from outpatient to inpatient.
You can get many services through outpatient care, including:
- Emergency room services
- Medical observation
- Outpatient (day) surgery
- Lab tests
- Chemotherapy or Radiation Treatments
- Other services received without the doctor ordering admission
Inpatient Hospital Stays & Skilled Nursing Facility Care
Medicare only covers a Skilled Nursing Facility when a qualifying inpatient hospital stay precedes the SNF. You need to get inpatient hospital care for at least three straight days to qualify.
The say must include the first day that you’re an inpatient and exclude the day of discharge.
Many patient advocate groups call this requirement a Medicare loophole that does a disservice to aging adults. These adults need quality care that comes from a nursing care center.
Medicare patients find themselves in a situation where they face sticker shock looking at Medical bills. Others must decide whether they will pay out-of-pocket for care or end services early.
When you or a loved one arrives at the hospital, you can also ask questions like:
- What is the patient’s status inpatient or observation?
- How long do you think the hospital stay be?
- Will there be a need for rehab care after discharging the patient?
Asking questions throughout your stay is important because hospitals can change the status from one day to the next.
You can ask to have your status changed, but it is crucial to do so while you’re still in the hospital. If necessary, you can request the hospital’s patient advocate for assistance.
Inpatient Medicare Expenses
Part A will cover hospital services while you’re receiving inpatient care.
These services include:
- Semi-private rooms
- General nursing
- Medications necessary for your inpatient care
- Any supplies and treatments essential to treat your condition
For an inpatient stay, you must pay your Part A deductible. You pay 20% of the bill after meeting the deductible.
Those with a Medicare Advantage plan have coverage by that plan for inpatient hospital care.
Medicare Advantage plans must provide coverage equal to or better than Part A and Part B. However; Part A still covers hospice care.
Outpatient Medicare Expenses
Part B covers outpatient services. You pay coinsurance for every outpatient service, and the amount varies.
For example, your coinsurance for the ER is likely to be different than your coinsurance for outpatient surgery.
Part B covers outpatient doctor services at 80%; you must pay 20% after meeting the deductible.
There are some screening and preventive services that have coverage without cost to you since the Part B deductible doesn’t apply.
If enrolling in a Medicare Supplement plan, many out-of-pocket costs have coverage.
Prescription drugs you obtain in an outpatient care setting don’t usually have coverage under Part B. However, if you’re not self-administering the drug, you may have coverage.
Many hospitals have policies that don’t allow patients to bring a prescription or other drugs from home for safety reasons.
Difference Between Inpatient vs Outpatient
Understanding the differences between Inpatient and Outpatient can be difficult. The easiest way to know is to ask the doctor.
Rule of thumb would say anything that outpatient care doesn’t warrant hospitalization, whereas inpatient care is hospitalization, that isn’t under observation.
The location itself won’t define your inpatient or outpatient status.
Inpatient care usually consists of elaborate surgeries, issues that demand constant monitoring, and rehabilitation for mental health issues.
Common Questions about Inpatient, Outpatient, and Under Observation
Get Help with Inpatient & Outpatient Medicare Expenses
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