A key question every Medicare patient needs to ask when they are visiting a hospital and put in a bed, “Am I being placed in and Observation Status”. If you don’t know the answer to this question, you could be placing yourself at financial risk and not realize it until you receive the hospital bill. If the answer is “Yes”, the patient and family members need to work with the clinical team and hospital administration to understand the potential expenses a Medicare patient could personally incur during and after the hospital stay. Therefore the physicians, nurses and hospital personnel will work as a team to develop the most cost efficient delivery of care.
Typically a nurse or physician will not know the answer to the question if you are an “Observation Status” nor will they understand how their decisions may impact you financially unless someone explains it to them. The person that can answer the question if you are classified as an “Observation Status” patient is a hospital administrator.
The reason the answer to this question is significant, is that any medications dispensed during the hospital stay and related services after you are discharged are not be paid for by Medicare. An “Observation Status” is a classification of a patient when arriving at a hospital that appears to have a medical condition that requires observation though not serious enough to admit the patient into the hospital. This is a patient classification defined by the Centers for Medicare and Medicaid Services (CMS) that determines how much a hospital is reimbursed for the treatment of a Medicare patient based upon a defined set of clinical criteria. If a hospital does not appropriately categorize a patient’s classification based upon the prescribed clinical criterion, they will not be reimbursed for the medical services delivered and could possibly be fined. A patient categorized as an “Observation Status” can be put in a hospital bed for up to 72 hours and placed in an area with other patients that are classified as an inpatient admission. So the patient appears to the clinical team as a hospital inpatient admission where Medicare pays for all of the expenses though they are not the same patient classification. So Medicare will only pay for some of the medical expenses and the patient is liable for the balance.
To further elaborate on how a patient can be placed at financial risk is where the patient is sent after the hospital visit. For example, if the patient is sent to a Skilled Nursing Facility or Nursing Home for further observation and medical treatment, the patient can be liable for all of the expenses incurred during their stay at one of these facilities.
There are a growing number of situations where patients did not know they were liable for paying these expensive medical services until they receive the hospital bill 30 to 60 days after being discharged from the hospital. At that point, a senior citizen can be harmed financially without any knowledge they are liable for some of the medical charges. If they or one of their family members asked the right question at the beginning of the hospital visit, the senior citizen would have greater control over the costs incurred and not surprised when they see the medical bill.