Some Medicare beneficiaries who visit the hospital are getting surprised by big bills because their stays weren't considered inpatient services.
The issue arises when a Medicare beneficiary who comes to a hospital is placed in a status called "observation care." This is supposed to mean that patient is being watched while doctors decide if she can be discharged, or if she is ill enough to be admitted as a true inpatient. Observation is typically supposed to last 48 hours or less.
The number of observation hours grew to around 36 million in 2009, from 23 million in 2006, according to the Medicare Payment Advisory Commission. The commission also saw a growing number of stays lasting 48 hours or longer between 2006 and 2008.
The problem for Medicare beneficiaries is that observation services can result in unexpected expenses. They are considered outpatient care—even if the patient is in the hospital for several days. That means the visit isn't included under Medicare Part A, which covers the total cost of hospital services after a deductible. Instead, the patient owes copayments for services under Medicare Part B, which covers outpatient care and doctors' work. (Beneficiaries who have Medicare Advantage coverage pay according to their particular plan's rules.)
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Source: The Wall Street Journal