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Admission vs. Observation

The difference in Admission and Observation status

What conditions are typically treated as Observation status?

Usually observation status is for conditions which can be treated in 48 hours or less. Some common examples are nausea, vomiting, head and stomach pain, fever, weakness, kidney stones, some breathing problems and chest pain. 

Will I be treated differently than admitted patients?

Absolutely not! Your care is equally important to us and the quality of care remains the same whether you are admitted or an observation patient.

How will this impact my hospital bill?

Observation patients are billed as an outpatient service (under Medicare Part B). Inpatient admissions are billed under inpatient services (under Medicare Part A). Observation patients may have insurance co-pays and deductibles associated with the outpatient terms of their health insurance policy. Out of pocket  expenses may differ depending on your status as an observation patient or as a full inpatient admission.

How Long will I be in Observation?

Observation services typically last less than 48 hours, depending on the insurance you have. At the end of your observation stay, your physician will decide if you will be discharged or if you will be admitted.

Patients who stay the night in a hospital may be considered an Admission or they may be Observation status. The difference between the two could impact what is covered during the stay and what portion of the patient’s bill for which they are responsible. Patient status is determined according to federal laws and regulations that define who is an inpatient and who is an outpatient. Hospitals must understand and be compliant with these rules or face significant financial penalties. Complex new Medicare admission policies make almost any Medicare patient spending less than two nights in a hospital an outpatient, unless they are having complex surgery or a procedure that must be performed under inpatient status, according to Medicare rules. Regulations encourage hospitals to place more patients in observation. In doing this, they are following Medicare guidelines.

The physician has the ultimate responsibility to order admission, but the hospital is held accountable for proper billing. On top of that, Medicare respects the physician’s ability (with hospital guidance) to make the decision to order observation – and they do not allow beneficiaries to appeal.