If you are on Medicare and are admitted to a hospital, there’s an important question you should ask.
“What’s my status?”
The answer to this question is important because it may alert you to some potential expenses that will fall on your plate. Let’s look at the differences between being admitted as an Inpatient versus admission for Observation.
Inpatient vs Observation
To be considered as an inpatient you must have been admitted to the hospital for a minimum of three days. This means that your doctor has written a formal order for you to be admitted as an inpatient.
While admitted as an Inpatient, you will be responsible for a deductible which covers your first 60 days in the hospital Consider this a “room and board” fee. After you have stayed the minimum three days, you also become eligible to be admitted into a Skilled Nursing Facility (SNF) once you have been released if your doctor feels you additional skilled care after you leave the hospital.
On the other hand, being admitted under Observation Status means your doctors don’t believe that you will need to be in the hospital for more than 2 days. Instead, they’d like to keep you there for observation until you feel better to return home.
Inpatient Status: Who Pays?
Medicare Part A is your hospital coverage and it does pay for quite a bit of your hospital expenses. However, there are some cost-sharing that you will be responsible for as well. As of 2018, your Part A deductible for your first day in the hospital is $1340. If you spend even one night in the hospital, you will almost surely owe this deductible.
The good news is that you are not responsible for any other Part A costs during the next 60 days. If you are in the hospital longer than 60 days, you then begin to pick up some daily copays under Part A. Day 61-90 will cost you $335 per day. After 90 days, your daily copay goes up to $670 per day.
Your Part A hospital benefits run out at 150 days. Fortunately, it’s pretty rare to have a hospital stay that lasts for 150 consecutive days.
Part A also covers your some of your costs in a Skilled Nursing Facility. After your hospital stay, if your doctor feels like you need to now go to an SNF, your first 20 days are covered by Part A. Your cost-sharing begins on Day 21. Days 21-100 will be $167.50 per day.
Some things that occur while you are in the hospital will actually fall under Medicare Part B. For example, diagnostic imaging or lab testing could be billed to Part B. After you pay your part B annual deductible of $183, Part B will pay 80% of those expenses and you will be responsible for 20%.
Observation Status: Who Pays?
If you are considered to be an Observation patient, your care related to the stay will be billed to Part B. Again, Part B will pay 80% of your bill and you will pay 20%. This can add up to quite a bit of money out of pocket if you don’t have supplemental coverage.
Because you haven’t been admitted to the hospital for at least 3 days, you also are not eligible to go to an SNF. Even if you and your doctor believe you’d benefit from going to an SNF, Part A will not pay for any of it. It’s important that you know this because if you choose to go to a SNF after leaving your Observation status to stay at the hospital, you could be responsible for thousands of dollars in outpatient costs.
Having a Medigap plan Can Help
Because you have some cost-sharing either way, it’s a good idea to have extra coverage to fill in these gaps. Many Medicare beneficiaries enroll in a Medigap plan at the same time that they sign up for Original Medicare.
This planscan help you to pay your deductibles and your outpatient coinsurance. This is important because just a couple days in the hospital can easily add up to $20,000 worth of medical fees. If you owed 20% of that because you were in Observation Status, then that would be $4,000 out of your own pocket.
A traditionalMedigap plan like Medigap Plan G would cover this 20% entirely.
Ask Your Status
We recommend you ask your status as soon as you are admitted to the hospital. Learning your status and how your bills will get paid is a good way to assure yourself that you won’t have any unexpected bills. There are instances when a patient requests the hospital to change their status and the hospital refuses. If they refuse and you have out-of-pocket fees that you feel should have been covered, you can file an appeal.
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