A physician may deem a patient’s condition severe enough for admission to the hospital as an “inpatient” to receive treatment only a hospital can provide. Medicare inpatients fall under Medicare Part A.
What is the Different Between Medicare Part A and Medicare Part B?
In other cases, a physician may want to observe a patient in the hospital, run tests, etc., to get a better handle on their condition. In theory, an “observation patient” (a type of outpatient) should only be categorized that way for a short spell—and then either admitted as an inpatient or given the all-clear to go home—but it may be days, occasionally even weeks. Medicare observation patients fall under Medicare Part B.
Hospital status matters … a lot. Medicare Part A covers an inpatient stay of up to 60 days with one flat-rate charge. Part B observation patients pay a 20-percent copay on all services after paying their deductible, with no cap on out-of-pocket charges (Medicare supplement insurance will help).
In addition, if inpatients need post-hospital rehab at a Medicare-certified skilled nursing facility, Part A will cover it for a limited period of time, provided their inpatient hospital stay was three days or more. Part B does not cover this service (a.k.a. the “Medicare loophole”). Observation patients are on the hook for the entire cost.
Medicare has issued complex guidelines for hospitals/physicians to follow and scrutinizes their every decision. Patients have no right to appeal their designation.
Many observation patients who thought they were inpatients receive jaw-dropping medical bills months after a hospital stay. Medical bills can be burdensome; surprise medical bills pack an even bigger wallop. Inquire about your or a family member’s patient status early on to avoid a rude awakening down the road.