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Outpatient Observation FAQ

1. What is outpatient observation?

Observation is a billing which permits patients who have problems (which normally do not qualify for a hospital stay) to be allowed to stay in the hospital for a “specified amount of time”.

2. What is the difference in billing?

An Observation stay is billed under outpatient services (under Medicare this would be under Part B) while inpatient admission is billed under inpatient services (under Medicare this would be billed under Part A Private Insurances may vary but most permit only 23 hours in observation.

3. What kind of problems do people have that would make observation appropriate?

Problems that can be treated in 24-48 hours or conditions for which the cause has not yet been determined.

4. What are some examples of these problems?

Some examples are nausea, vomiting, weakness, stomach pain, headache, kidney stones, fever, some breathing problems, and some types of chest pain.

5. What is meant by a “specified amount of time?”

Different insurance payors have different amounts of time that are covered in observation.

  • Medicare—observation services cannot exceed 48 hours. Typically a decision to release or admit is made within 24 hours.
  • Medicaid allows up to 30 hours.

6. What happens at the end of the “specified amount of time”?

Your physician will decide whether to release you from the hospital or to admit you as an inpatient.

7. What if my physician decides my condition requires inpatient care?

Your physician must then write an order to convert your outpatient observation stay to an inpatient admission.

8. What if my physician decides that I do not require an inpatient care?

If your physician decides that your care can be performed outside of the hospital you will be released, possibly with home health care services if necessary.

9. Can I be placed into outpatient observation after undergoing an outpatient surgical procedure?

Only if it is medically necessary. Medicare allows for a 4-6 hour “recovery period”. The intent of outpatient surgery is to have your surgery and be discharged the same day. However, if you experience a postoperative complication then your physician may place you into observation to monitor you further.

10. What type of post-surgical conditions may warrant further evaluation in “outpatient observation”?

  • Inability to urinate
  • Inability to keep solids or liquids down requiring IV feedings.
  • Inability to control pain.
  • Unexpected surgical bleeding
  • Unstable vital signs
  • Inability to safely walk after spinal anesthesia

11. What if I desire to spend the night after my outpatient surgery? Will Medicare cover this?

No, Medicare will only pay if there is a medical condition that warrants postoperative monitoring. If you desire to stay over for patient/family convenience, you will be fully responsible for payment.

12. What about “self administered drugs” and other services not covered by my insurance?

  • According to the billing rules for Medicare and Medicaid these charges will have to be billed to the patient.
  • Medicare and Medicaid will not pay for your pills or tablets and even some injectable drugs that fall under the category of self-administered. Please refer to the online version of the National Medicare Handbook at www.medicare.gov or call 1-800-633-4227 if you need more information.

A complete list of deductibles/services covered by observation/outpatient status is in your Medicare and You handbook.

If you would like to speak to someone regarding your financial responsibility as a result of this hospitalization, please feel free to contact our Patient Account Liaisons at ext.7689.

 
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