Medicare - How Does Outpatient vs. Inpatient Effect My Costs?

I was reading some enlightening information from Medicare Rights Center and thought I’d share. It is very important to understand that being classified as “Outpatient” status versus “Inpatient” status can significantly affect your costs that you are directly responsible for paying! You may not even know what the status of your stay in the hospital was classified as until later after you leave, unless you specifically ask!

"When you enter a hospital for treatment you can be classified as an inpatient or an outpatient, and your status affects Medicare costs and coverage. You are an inpatient if your attending physician has formally admitted you as an inpatient. The only way to know if you are an inpatient is to ask, as there are no specific characteristics of your hospital stay that automatically make you an inpatient. For example, an overnight stay in the hospital does not necessarily mean you are an inpatient. In general, doctors will admit you as an inpatient if they expect that you will need to stay in the hospital for medically-necessary, inpatient-level care over two or more midnights.

If you are not formally admitted as an inpatient, then you are considered a hospital outpatient, even if you stay overnight. There are a number of hospital services that are almost always provided as outpatient care, such as an emergency room visit or planned outpatient surgery. 

Observation services, sometimes called observation status, are outpatient services. They include ongoing short-term treatment and assessment of whether you should be admitted as an inpatient or if you can be discharged. Although they may involve an overnight or longer stay, observation services are outpatient services, so it is important to ask your doctor about the services you receive and what your hospital status is. Since observation services are provided to you as an outpatient, your coverage and costs will be different from the coverage and costs if you were an inpatient.”1

Click on the web link below to read more about coverage and costs if you stay in the hospital overnight:

1. Source: Dear Marci - Medicare Rights Center (

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