Am I In or Out? Navigating Inpatient vs. Outpatient Care

By RetireMEDiQ

Even when you take good care of yourself, you may need to occasionally visit the hospital. Unlike visits to your family doctor, hospital stays can vary greatly in cost and coverage. But did you know that your status as a patient (inpatient versus outpatient) can make a big difference in the cost of your care?

What is the Difference Between Inpatient and Outpatient Care?

According to the Centers for Medicare and Medicaid Services, inpatient and outpatient hospital stays are generally defined as the following:

  • Inpatient stays begin when you are formally admitted to the hospital with a doctor’s order. Inpatient status ends the day before you are discharged from the hospital.
  • Outpatient stays apply to hospital visits in which you are not formally admitted to the hospital via a doctor’s order. This can include outpatient surgeries, lab tests and x-rays. Trips to the emergency room are considered outpatient until a doctor formally admits you to the hospital.

What About Overnight Stays?

It is important to note that staying overnight at the hospital does not always mean you are admitted as inpatient. A doctor needs to formally admit you to the hospital for your stay to be considered inpatient. In some cases, doctors provide observation services. These are hospital outpatient services that you receive while your doctor decides whether you need to be admitted or not. We always advise that you ask the hospital staff clear and direct questions to determine when you are considered inpatient and when you are considered under observation.

How Does This Impact My Costs?

Inpatient and outpatient medical services are billed differently. Regardless of the status of your visit, you will always pay your deductible, coinsurance and/or copayment. In general, Medicare Part A does not cover outpatient services. Medicare Part B typically covers the doctor’s services and hospital outpatient services.

As an example, if you are on a Medicare Advantage plan and classified as inpatient, you will most likely have daily copays that cover medical services performed on that day. But when you are considered outpatient, you will generally be billed a copay or coinsurance for each individual service. It may be helpful to think of outpatient billing as “a la carte.”

A Note on Skilled Nursing Facilities

Depending on what type of Medicare plan you have, you may need to meet certain requirements to qualify for coverage in a skilled nursing facility after a hospital visit. One requirement can be a “qualifying hospital stay,” which is defined as an inpatient hospital stay of at least three days. The “three-day stay” rule does not allow outpatient services to count toward the minimum stay. For example, depending on your coverage, if you go to the hospital and are under observation for one day before being treated as an inpatient for two days, your stay would not meet the requirements.

If you have questions about any of the topics discussed in this post, please reach out to us at 1-877-222-1942 or client@retiremediq.com.

If you are not a RetireMEDiQ client and have questions about retirement or Medicare, please contact our team of expert advisors at 1-866-600-5638 or advice@retiremediq.com.

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