Medicare and Inpatient vs. Outpatient Treatment Costs

Under Observation vs. Admittance

So what is the difference? Two seniors go to a hospital, receive the same treatment, yet one receives a higher bill than the other. Why?

Here's the deal: There seems to be an increasing trend with some hospitals to classify sernior patients as "under observation" or "held for observation". This outpatient classification has a big impact vs. receiving treatments under an inpatient classification. Take for example a senior that needs a hospital trip due to a fall - They will be evaluated by the hospital staff to determine if they need to be treated for any injuries. If treatment is necessary - those treatments can be provided on an inpatient or outpatient basis.

The inpatient-outpatient qualification is critical as it directly impacts how Medicare will compensate the senior for these healthcare expenses.

Elderly inpatients must pay a fixed deductible, after which Medicare Part A (hospital insurance) picks up the rest of the bill for their hospital stay. Additionally, Medicare Part B (medical insurance) will pay all but 20 percent of an inpatient's doctor's fees. The issue is that Part A only pays when the senior is actually admitted - not for outpatient treatment.

A senior receiving outpatient treatment will not be eligible for the Part A insurance coverage. In such cases, Part B of the Medicare plan will kick in to help pay for these cost, but it won't provide the level of coverage that Part A does and the difference can be thousands out of the senior's pocket. For example, under Plan B, the senior will be paying 20% out-of-pocket for each test and treatment. Even worse, the senior may be looking at having to pay the full cost of any medications and then seek reimbursement from Medicare. Reimbursement of their out-of-pockets costs for the prescriptions isn't a certainty.

Also consider that how the treatments were handled in the hospital can impact the patient out of the hospital. If a senior patient needs follow-up care the level of compensation of that care will depend on the classification of the hospital care and inpatient or outpatient. For example, if a senior needs nursing facility follow-up, their ability to receive compensation for that care will be dependent on if they had at least three days of inpatient hospital stay. 

What's the golden the rule? If a senior is going to be subjected to treatments for a couple of hours in an emergency room or other outpatient form of treatment, it should be identified to the medical staff that continued treatment would be preferred to be done on an in-patient basis. Remember, the medical staff is often focused on the symptoms and cause of ailments, as well as the related treatment and testing needs; the focus isn't necessarily on the cost that is associated with the treatments for the patient. It is up to the elder patient and any one else helping them to identify cost concerns and how they can best be managed.

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