Observation versus Inpatient status
You show up at the hospital and the medical professionals consider you too sick to go home, but not sick enough to be admitted as an inpatient. You could be classified as an observation patient, but do you understand how that simple administrative classification may impact your wallet?
Observation status does help hospitals get paid more. And true….it could save you money initially, but it could also end up costing you much more than expected down the road. For example, did you know being admitted to a Skilled Nursing Facility for rehabilitation services requires a three day qualifying “inpatient” hospital stay by Medicare? If you do not have the classification for the required length of time, Medicare will not pay for your rehab. Why doesn’t the time you spent as an “observation patient” count towards longer term care? It’s a good question which many are asking. In fact, observation status is only a hospital billing issue and has nothing to do with what the patient needs or is provided by the hospital.
It’s just another example of misplaced logic and how a complex health system with many different insurance coverage rules can create unexpected outcomes. In fact, many Medicare beneficiaries do not receive the recommended post hospital care because of these classification problems and because they then simply can’t afford it. And yes, not getting the care needed early can lead to higher costs of care later.
After a fall, one couple got hit with out-of-pocket expenses totaling more than $9,000. http://www.philly.com/philly/health/20161016_Seniors_socked_with_huge_unexpected_bills_after_receiving_hospital_observation_care.html