Hidden costs of hospital observation care
There’s little consensus on what observation is exactly — a period of time, a status, a process — but perhaps this much is established: “It is a designation that is rooted in figuring out, ‘Does this patient need to be admitted?’” says Brian Contos of The Advisory Board Company, a consulting firm that advises hospitals on observation. But despite the extra time it buys clinicians to run tests, diagnose and determine the best treatment, observation can come at a price for some patients, who pay more out of pocket.
A look at how observation compares to inpatient care for people with Medicare:
(outpatient, covered by Medicare Part B)
(covered by Medicare Part A)
|Patients have an annual deductible of $162 for outpatient services.||Patients pay a $1,132 deductible for up to 60 days of care.|
|Patients generally pay 20 percent of the Medicare-approved amount for hospital services.||No copayment is charged for hospital services.|
|Patients pay 20 percent of doctors’ fees, which are separate from hospital charges.||Patients pay 20 percent of doctors’ fees, which are separate from hospital charges.|
|Medications typically aren’t covered unless administered by IV.||Medications are covered in full.|
|The patient may have to pay for tests or services not considered “medically reasonable or necessary” by Medicare.||X-rays and other tests and services are covered as part of the hospital stay.|
|Post-hospital skilled nursing home stays aren’t covered.||Nursing home stays are covered if admitted to the hospital for at least three days in a row.|
Other types of insurance, such as supplemental coverage, long-term care insurance and prescription drug plans, may help with some costs not covered by Medicare.