Medicare-Observation status–Medicare’s little trick

Observation status refers to this increasingly common hospital practice of putting patients in beds and providing them with medical and nursing care, diagnostic tests, treatments, services, food, and a wrist band – but calling them outpatients, not inpatients.

No harm, no foul?  Wrong!  It’s simple – the difference in terminology makes all the difference in the world: Inpatients qualify for Medicare coverage of their nursing home care following a hospital stay; outpatients don’t.


Congressman Joe Courtney (D. CT),  and the Center for Medicare Advocacy held a Congressional briefing on “observation status” to alert Congress about Medicare beneficiaries who are being denied Medicare coverage for care in a skilled nursing facility (SNF) when their prior stay in an acute care hospital is labeled “outpatient observation” rather than inpatient. Read about this at http://salsa.democracyinaction.org/o/777/p/dia/action/public/?action_KEY=8514

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