You don’t feel well and head to the Emergency Department. A physician sees you, and they tell you that you should stay in the Hospital, but as an observation patient. What does that mean?
All hospitals classify patients who need a hospital bed in two ways– as observation patients or as inpatients. This terminology, required by federal law to limit any Medicare fraud and abuse, is important for insurance purposes, especially if you have Medicare. However, it has no impact on the quality or type of care and the tests that you receive. You will be appropriately treated regardless of whether you are labeled as an observation patient or an inpatient. The amount your health insurance company pays will depend on your coverage.
Observation vs inpatient: What’s the difference?
According to Medicare, an observation patient is someone who will not have to stay in the Hospital for more than two midnights. (Yes, that literally means you are considered any observation patient if you are expected to leave the hospital before the clock strikes 12 a.m. twice.)
An inpatient is someone who would need to stay in a Hospital bed longer than two midnights.
How does it work?
As required by federal law, physicians must determine whether you are an inpatient or an observation patient, and their decision is based on how long you are expected to stay in the Hospital. In making that decision, physicians must take into account your presenting symptoms and the federal guidelines they must follow. If they do not follow these guidelines, the federal government could conduct an audit and impose a penalty.
Can you convince your physician to change your status?
No, you can’t convince your physician to change your status. Your physician won’t change your status unless symptoms change and, consequently, your expected length of stay.
Worth noting: Middlesex Hospital analyzes a patient’s status twice a day to determine if they are being labeled appropriately.
How do I know what my insurance covers?
The Hospital does not benefit from this federal law. In general, hospitals are paid less when you are considered an observation patient.
Everyone’s insurance coverage is different and some hospital stays due to specific surgeries are exempt from these rules, making it very important that you talk to your health insurance company about your coverage before you need to use it. A hospital and your medical team will not be able to answer your individual insurance questions.
Is there anything else I should know?
If you have traditional Medicare (not a Medicare Advantage plan), federal guidelines require that you be labeled as an inpatient and in the hospital for at least three days as in inpatient in order for rehabilitation services to be covered. If you are considered an observation patient, those same services will not be covered.
Patients who are upset by this should make their voices heard by advocating for changes in Medicare. Hospitals have no control over this.
Also, please know that Middlesex Hospital does offer financial assistance, if needed.
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