Medicare coverage can be confusing. Take Medicare ‘Under Observation’ status, as an example.

“Judith Stein got a call from her mother recently, reporting that a friend was in the hospital. “Be sure she’s admitted,” Ms. Stein said. “Of course she’s admitted,” her mother said. “Didn’t I just tell you she was in the hospital?” But like a sharply growing number of Medicare beneficiaries, her mother’s friend would soon learn that she could spend a day or three in a hospital bed, could be monitored and treated by doctors and nurses — and never be formally admitted to the hospital. She was on observation status and therefore an outpatient.” — Two Kinds of Hospital Patients: Admitted, and Not, by Paula Span

Medicare ‘in-patient’ vs. Medicare ‘under observation’

Nicknamed the ‘two-midnight rule’, Medicare requires a patient’s stay must include two midnights to be classified as an in-patient. Medicare Part A will cover In-patient status.

Medicare classifies any stay less than two midnights as ‘under observation’ or out-patient care.  ‘Under observation’ status puts the care costs into the Medicare Part B.

“Under Part B, they’re billed separately for every procedure and visit and drug, and the co-pays can mount until patients owe hundreds or thousands of dollars — which they may only discover upon receiving the bills.”  — Two Kinds of Hospital Patients: Admitted, and Not, by Paula Span

“…nearly two-thirds of those who do need skilled nursing have to shoulder the substantial costs themselves, according to a report from the AARP Public Policy Institute.” — Under ‘Observation,’ Some Hospital Patients Face Big Bills, by Paula Span

Be proactive to confirm your loved one’s status when being admitted to the hospital. Knowing the difference between Medicare ‘in-patient’ vs. Medicare ‘under observation’ status can be counted in thousands of dollars.

Paula Span with the New York Times has written several articles around Medicare’s ‘Under Observation’ status. See two articles linked above.