Did you know that even if you stay in the hospital overnight, you might be considered an “Outpatient”? Medicare and most private insurance companies have well defined guidelines hospitals and physicians are expected to consider when making the decision to admit you to the hospital.
Observation is a federally mandated service which allows hospitals to provide short term treatment, assessment and reassessment of your condition while a decision is being made as to whether or not your condition requires an inpatient admission. The decision to place a patient in Observation or Admit as an Inpatient is made only on medical necessity criteria, not based on payment.
The criteria used in making the decision are largely based on:
- The amount of time you are expected to be in the hospital
- How sick you are (i.e. do you require hospital care or could the care be delivered in your home, a skilled or long term nursing care facility, by home care or hospice, or even in your primary care physician office)
- Depending on your diagnosis, the medical services, and the treatments needed to treat your illness
Medicare uses a benchmark of spending 2 midnights in the hospital as one factor in determining if you should be considered an inpatient or an outpatient. Private insurance companies use varying times, anywhere from 23 hours up to several days.
Hospitals and physicians are expected to follow federally mandated Medicare and insurance rules, and as a result have put resources and processes in place to ensure we are both advocating for your best healthcare interest as well as following the rules. Regardless of whether you are admitted as an Inpatient or placed in Observation you will receive excellent care and service during your stay with us.
A few additional important details you should know regarding Observation:
- The decision to place you in Observation status, versus an inpatient is based on your medical condition combined with the requirements of your insurance company. Status is not a patient choice. We are required to follow the regulations and will do our best to keep you informed along the way. You do have the right to choose to be discharged from the hospital and receive care as an outpatient thru your primary care or physician office.
- The time spent in Observation does not count towards the 3-day inpatient stay required for Medicare to cover your skilled nursing facility stay.
- Your out-of-pocket expenses could be higher, particularly if you are a Medicare beneficiary; as Observation services are covered by Part B, which has a 20% deductible for each individual outpatient service provided.
- Your may start your stay as Observation, however at any time; if your condition worsens you may be changed to an inpatient status. If this happens, a member of the hospital team will communicate the change to you and or your representative.
- If at any time you have questions or concerns about your status please ask any member of your healthcare team and they will assist in getting someone in to speak with you.
How is Observation paid for by my insurance?
It is important to note, the decision to place you in Observation or to admit you as an Inpatient is made based only on your medical condition; and is not made based on payment/insurance coverage.
Medicare – Observation is covered under the Medicare Part B “Outpatient” benefit. There is no “hospital” charge for Observation. Medicare B covers 80% of services provided to you during your hospital stay. Because every patient is unique and the care and services you receive (tests and treatments) are specific to your illness we can not accurately estimate the potential cost.
What we can safely tell you:
- If you do not have a secondary insurance you will be responsible for 20% of the cost of “Outpatient Services” provided during your stay. “Outpatient Services” include, but are not limited to: doctor or physician assistant services, lab test, x-rays, MRIs, CAT scans, procedures that may be completed in the operating or endoscopy rooms.
- If you have a secondary insurance or a supplemental policy the 20% not covered by Medicare B may be covered thru this policy.
- If you were admitted to the hospital as an inpatient you would:
- Have an annual deductible of $1,216 (which a secondary insurance may cover)
- Be responsible for 20% of the services provided to you by the physician (the coverage for physician services is the same regardless of whether you are an Observation or Inpatient)
Commercial Insurances – Every payer and different policy groups within these payers have different payment policies regarding Observation. Almost all policies cover Observation, however some will have a deductible associated with the visit. It is recommended that you contact your insurance company directly for information regarding Observation coverage. We will communicate on a regular basis with your insurance company in regards to your medical care, as most insurance companies have a nurse, and or physician involved in determining whether or not they will cover your stay as an inpatient or observation.
Self Pay or Uninsured – Because there is no facility charge associated with Observation it is often less expensive to receive care in Observation. If you are placed in Observation and have no insurance you may qualify for assistance thru the hospitals Financial Assistance Policy.