By, Sue Fairley MSN/MHA, RN, Vice President of Nursing and Ancillary Services
and Lisa Fisher, MSW, Director of Case Management and Social Services

Back to: Opinion
August 14, 2014
Follow Opinion

Understanding inpatient versus outpatient admission status

Hospital care can be complex and expensive. Strangely, a short hospital trip may cost more than an extended stay.

In October 2013, Medicare enacted the “two-midnight rule” to discourage hospital inpatient admissions. Medicare patients staying longer than two midnights in the hospital, excluding discharge, may be considered inpatients. Medicare patients that stay less than two midnights typically receive outpatient or observation status.

Observation status costs more for Medicare patients and hospitals. Insurance companies likely will model Medicare’s limited reimbursement plan which means non-Medicare patients may soon experience this change.

Barton wants to help Medicare patients and their families better understand how the “two-midnight rule” affects the patient’s health and financial responsibility.

Any Medicare patient that enters a hospital for emergency care requiring admission is assessed for inpatient or observation status. Based on the patient’s medical condition and symptoms, a medical provider uses Medicare’s established “two-midnight rule” criteria to determine the patient’s status.

Medicare charges observation status like outpatient treatments that occur outside the hospital setting. Outpatients are expected to pay line-by-line for services and both the patients and hospital receives far less reimbursement than an admitted inpatient.

All patients admitted to the hospital receive the same level of expertise and care.

When a patient is admitted to the hospital, the hospital staff considers many factors to determine the patient’s status, such as symptoms, treatment needs, and severity of condition/illness. Physicians use these findings, in conjunction with the established criteria from Medicare, to best determine how long a patient will remain in the hospital. If conditions and circumstances change, admission status can change to match the care needed.

To ensure that medical staff has admitted the patient to the correct status, Barton contracts with Executive Health Resources (EHR) to verify the admitted patient matches the correct status under Medicare Guidelines.

Medical providers are required to follow the two-midnight rule. It is the same for every hospital nationwide.

When Medicare reimbursements decrease, hospitals and medical providers must find other ways to make up this decrease in revenue. The hospital cannot absorb these extra costs and still provide the variety and quality of services to the community. Thus, some costs trickle down to the patient.

In 2013, Barton donated nearly $7 million in care to patients who qualified for financial assistance.

For a comprehensive list of Medicare coverage, visit www.medicare.gov.


Explore Related Articles

Tahoe Daily Tribune Updated Aug 14, 2014 05:40PM Published Aug 21, 2014 10:59AM Copyright 2014 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.