Why It’s Important to Know the Difference Between Being “Admitted” to the Hospital and Being “Under Observation”
Medicare patients in a hospital seldom know whether or not they’ve been “admitted” to the hospital, or are under “observation”. Being admitted means that the hospital stay will be coded as a Part A claim. Being “under observation” makes it a Part B claim. In addition to higher cost-sharing responsibilities for the patient, when coded as “under observation”, there are no benefits available to help with the cost of rehab in a Skilled Care Facility following a hospital stay. This can be financially devastating for those requiring rehab after a surgery, heart attack, or stroke.
A patient shouldn’t have to question whether or not they’ve been admitted. It’s reasonable to assume that if you are in the hospital overnight, you’ve been admitted. The last thing in a patient’s mind is their official status in the hospital – as if they would even know to ask about it in the first place. Thankfully, that information will now be available to them within 24 to 36 hours after becoming a patient.
Under the recently enacted Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act), hospitals are now required to provide notification to individuals receiving observation services as outpatients for more than 24 hours. This notice informs the patient that being coded as observational means that their stay will result in a Part B Medicare claim, which results in a higher charge to the patient as in a copay and 20% of the Medicare-approved amount for most doctor’s services.
Although this is a good first step, it doesn’t solve the problem of rehab services not being covered by Medicare at all because the original hospital claim was coded as a Part B claim. At least now, however, the patient must be made aware of their official status while in the hospital and the resulting coding of their hospital claim to Medicare.