Do You Know What Medicare Covers in the Hospital?

Your hospital status can affect how much you pay for the services you receive. Knowing how Medicare covers hospital care helps ensure that you ask the right questions to reduce your health care costs. Below are some coverage tips and points to remember complied by the Medicare Minutes program, a partnership of Medicare Rights Center and the Senior Medicare Patrol (SMP).

Point 1: Know whether you are receiving inpatient or outpatient hospital care.
It is important to know whether you receive inpatient or outpatient hospital care to understand how your services are covered. Inpatient hospital care is care you receive as a formally admitted inpatient. Staying overnight in the hospital in itself does not make you a hospital inpatient. You have to be formally admitted into the hospital by an attending physician in order for your care to be considered inpatient hospital care. If you are not admitted into the hospital, the care you receive at a hospital will be considered outpatient care.

As a reminder, Medicare Part B covers outpatient hospital care, such as observation stays, emergency room visits, and same-day surgeries. An outpatient stay occurs when you are kept in the hospital for monitoring, but you are not admitted as an inpatient. The length of an outpatient stay depends on your medical circumstance. Being an outpatient means that you will be responsible for more of your hospital costs than if you were admitted as an inpatient. You should ask the hospital whether you are an inpatient or outpatient, so you know how your services are covered. Tell your caregivers and family members to ask on your behalf if you are unable to ask about your inpatient status yourself.

Note that observation services are services used to assess whether you need to be admitted as a hospital inpatient or if you can be discharged. If you are in the hospital, but you are on observation status, you are not considered a hospital inpatient. Knowing whether your hospitalization is considered an observation stay is especially important because observation stays can look and feel like inpatient stays. Observation stays occur when a physician does not expect you to spend more than two days in the hospital and therefore does not admit you as an inpatient. Observation stays can affect the skilled nursing facility (SNF) care you are eligible for after your hospital stay and can lead to higher out-of-pocket expenses. Original Medicare requires a 3-day inpatient hospital stay in the 30 days before you enter a SNF. Know if you meet the three-day requirement before leaving the hospital and entering a SNF. The best way to find out if you are under observation is to ask the hospital staff. Ask family members or caregivers to ask on your behalf if you are unable to ask yourself.

If you have a Medicare Advantage Plan, it must cover the same level of care as Original Medicare, but you may have different costs and restrictions. Contact your Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222 if you would like to talk about the differences and similarities between Original Medicare hospital coverage and the coverage offered by your plan.

Point 2: Know the cost-sharing rules for hospital stays, both inpatient and outpatient hospital care.

If you have Original Medicare and are a hospital inpatient, your Part A costs depend on where you are in your hospital benefit period. A hospital benefit period begins the day you’re admitted as an inpatient and ends when you’ve been home for 60 days. You must meet a deductible for each benefit period of $1,260. If you are an inpatient for over 90 days, you may use your lifetime reserve days: you get 60 non-renewable lifetime reserve days, which have higher coinsurance costs.

As an inpatient, you owe a separate 20% coinsurance under Part B for all physician services. If you receive outpatient hospital services, you typically also have to pay a copayment for each outpatient service you receive. The costs may include facility fees. You also pay a 20% coinsurance for physician services you receive. Remember that your costs may be different if you have a Medicare Advantage Plan. Call your plan for a breakdown of inpatient and outpatient hospital costs. Call your local HICAP if you need additional assistance understanding the breakdown of costs.

Point 3: Know the difference between a service received and a billing error.
If you are an Original Medicare beneficiary, you will receive a Medicare Summary Notice (MSN) every quarter that lists the health care services you have received during the previous three months, and their costs. Similarly, if you have a Medicare Advantage plan and/or Part D drug plan, you will receive periodic Explanation of Benefits (EOB) from your plan, listing the services you have received and their costs. The MSN and the EOB are not bills, but instead let you know the health care services you have received. Review your MSN or EOB carefully to make sure you actually received the services listed. If you discover duplicate orders for medications or lab work, or if you think you or Medicare are being held wrongfully responsible for the cost of a service, contact your hospital’s billing department to request a correction. If the hospital is uncooperative or if you are still suspicious, call our Senior Medicare Patrol – or SMP- program for further assistance at 1-855-613-7080.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.