Medicare - Observation Status And How It Can Affect You!

"Observation Status" is a designation used by hospitals to bill Medicare.1

People who receive care in hospitals, even overnight and for several days, may learn they have not actually been admitted as inpatients. Instead, the hospital has classified them as Observation Status, which is an “outpatient" category.1

Since March 8, 2017, hospitals have been required to give patients the Medicare Outpatient Observation Notice (MOON) within 36 hours if the patients are receiving "observation services as an outpatient" for 24 hours. Hospitals must also orally explain observation status and its financial consequences for patients. The MOON cannot be appealed to Medicare.1

Outpatient Observation Status is paid by Medicare Part B. When hospital patients are classified as outpatients on Observation Status, they may be charged for services that Medicare would have paid if they were properly admitted as inpatients.1

Most significantly, patients enrolled in Original Medicare will not be able to obtain any Medicare coverage if they need nursing home care after their hospital stay. Medicare only covers nursing home care for patients who have a 3-day inpatient hospital stay - Observation Status doesn’t count towards the 3-day stay.1 (A Medicare Supplement would also not cover the cost.)

Most Medicare Advantage Plans now include a specific Observation Status benefit co-payment. However, be sure to check your specific Medicare Advantage plan for details. Also, a three day prior inpatient hospitalization does not apply to Medicare Advantage plan members, however, referrals and plan authorizations would be required for admittance to a Skilled Nursing facility.

To read more click on the web link below:

1. Source: Center for Medicare Advocacy

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