Inpatient Care vs Outpatient Care: Knowing the difference could save you thousands

Outpatient care word cloud

Outpatient vs Inpatient: The difference could save you thousands

So what exactly are these terms, outpatientinpatient, observational care, skilled nursing facility? And how do they affect you? If you have a Medicare Supplement Plan, then possibly by thousands of dollars.

No one wants to think about going to the hospital. But when you’re in the hospital, the last thing on your mind is how you will be billed. Understanding the subtleties ahead of time—of how they admit, treat, and bill Medicare patients—can potentially save you thousands of dollars, especially in long-term care costs. If you or a loved one does need to visit the hospital, you’ll be ready after reading our guide.

Outpatient vs Inpatient at-a-glance

An inpatient is a person who is formally admitted to a healthcare facility, like a hospital or skilled nursing facility. If you have not been formally admitted to the hospital by a doctor, you are not an inpatient. An outpatient is a patient who a doctor treats, who may receive ambulatory care at a hospital, and may even spend the night, but is not formally admitted to that facility. Outpatient and inpatient can look and feel very similar because they both take place in a hospital, but you can ask the doctor who is working with you if you are being formally admitted.

Remember: the key phrase for distinguishing between inpatient and outpatient care is ‘FORMALLY ADMITTED.’

How does observational care (aka hospital outpatient care) fit into this?

Observational services are the hospital outpatient services you get while your doctor decides whether to admit you as a patient or discharge you. That can happen in the emergency room or any other part of the hospital. Observational care can even be overnight and last up to 48 hours (although 24 is more typical, some cases have exceeded 48 hours). Due to medical and technological advances, many more health services are available without a formal hospital stay, and hospital observational services are increasing according to the CDC. For seniors, the distinction is even more pertinent, because observational services are most common among people 65 years and over. Please refer to this Medicare.gov publication, page 3 for a few specific examples of how different hospital situations would be covered between Parts A and B.

Will the hospital tell me if I am receiving observational care?

Yes, after 24 hours, as a Medicare patient, you have the right to what is known as a MOON, or Medicare Outpatient Observation Notice. A MOON is a written legal notice that explains if the patient is receiving observational care and the doctor’s reasons for that care. This notice is a written document that also requires an oral explanation by a hospital worker.

With a MOON, you have the right to be informed of the medical and coverage implications of the observational care. This is your chance to get as much clarity of your status from the hospital as you can. Medicare legally requires the hospital to obtain your signature saying that all details have been explained to you, so don’t hesitate to ask every question that you have.

Although you have a right to a MOON after 24 hours, the hospital is not legally bound to give it to you until after 36 hours of observational care has lapsed or upon your release, whichever comes sooner.

Our advice? If you realize that your or your loved one’s stay in the hospital may be a longer visit than expected, keep track of your time, and as your time nears 24 hours, start asking for your MOON to help expedite the progress of your notice. If you anticipate a longer stay, you can advocate to be formally admitted for better coverage. Learn more about MOON.

How does my patient status affect my Medicare charges?

The majority of your charges will be covered in some way with your Medigap plan. When you are an inpatient, Medicare Part A has a $1,340 deductible for all of your hospital and inpatient services for the first 60 days you’re in the hospital (that’s why Medicare refers to Part A as “hospital insurance”). An important distinction: Part B covers 80% of your doctor services, even while formally admitted.

These deductibles and leftover costs are why you have a Medicare Supplement Plan. All Medigap plans cover the Part A deductible, and after paying the Part B deductible, Plans like F and G will cover the other copays and deductibles from Part B. The other Medigap plans vary in how they cover the remaining Part B costs, so refer to your specific plan to understand your coverage. For a further breakdown of the Part A long-term costs, see Medicare and You 2018, page 31.

When you are an outpatient, Part B covers your hospital services and your doctor services after you have met your Part B deductible. Although, because of how Part B functions, you will likely have a copayment for each hospital service, and the amount you pay will vary on the type of Medicare Supplement Plan you have. For the full list of the Part B services and their costs, see pages 35-59 in Medicare and You 2018. You supplement plan will vary in how it covers Part B services, so refer to the specific coverage booklet for your plan.  If you have a Medicare Advantage Plan, your costs will be covered, but will vary with the amount of coinsurance you pay.

So how does Skilled Nursing Facility, or SNF, play in?

This is where the biggest drain on your wallet can come in. Sometimes hospitals transfer you to a skilled nursing facility, or SNF.  Medicare Part A covers 100 days of SNF care, but Part A will only cover it if you have been an inpatient for at least three days and check into a Medicare-approved SNF facility within 30 days. So, if you are expecting skilled nursing facility (SNF) care, you must be keep track of whether or not you are inpatient because three days as an inpatient in a hospital is required before SNF coverage kicks in. This can be confusing because you can spend three consecutive days in a hospital without being considered an inpatient for all three days. So, when you are transferred to a rehabilitation center, and you didn’t reach the three day mark prior to your discharge, you may pay completely out-of-pocket for those SNF costs. Keep an eye out for our upcoming post that gives a more detailed rundown on how Medicare works with skilled nursing facility (SNF) care.

What do I do while I am in the hospital?

Ask questions and look out for yourself. You have a right to have them answered, whether it regards the doctor’s treatment decisions, your status as an inpatient or outpatient, or if Medicare will cover your SNF stay. Remember the golden rule; you are not considered an inpatient nor receiving the financial benefits of an inpatient unless you areformally admitted by a doctor even if you have been in the hospital for a longer stay. If you are not being admitted, ask the hospital for documentation as to the reason. If you are admitted, ask the hospital for documentation on why and when you are formally admitted. Later on, if you feel their decision was in error, you can submit a claim for an appeal.

Finally, bring someone along as your advocate; don’t go to or remain at the hospital alone if you are in the middle of health crisis or treatment. Although you may have your head wrapped around the billing structure now, it can be near impossible to have the wherewithal to apply that knowledge while in the midst of experiencing it. Bring along a trusted family member or friend to be your advocate and handle the line of questioning. And share this article with them so that they are informed of your hospital Medicare needs.

We can help!

Here at Griffin Insurance Solutions, we know that your hospital experience is a unique and individual one that requires expert advice. Our clients trust us and refer us because of availability and willingness to give guidance and advice throughout the year, not just when it’s time to renew. Please call or email with any questions you have while navigating this complex process.