Medicare outpatient, which is covered under Part B of the Medicare program, has different coverage rules and costs from Medicare inpatient care. Medicare inpatient care is covered under Part A.
It is imperative to know when medical care is considered Medicare inpatient vs Medicare outpatient since Part B covers only 80% of the Medicare outpatient charges in most instances. Inpatient care, covered by Part A, will cover 100% of medical care for the first 60 days in a hospital. Certain medical care circumstances are not always obvious as to whether coverage falls under inpatient or the outpatient hospital setting.
** What is outpatient care?
Having an overnight stay in a hospital can still be considered as an outpatient hospital stay rather than inpatient. Sometimes doctors will keep you overnight in the hospital for observation purposes to see if you need to be admitted. To be considered inpatient under Part A coverages, you must be admitted via a doctor’s order. Under a doctor’s professional assessment of your medical condition, the doctor will only admit you based on it being medically necessary to have inpatient hospital care for at least 2 days to treat your condition.
Outpatient care, likewise, means a doctor did not order for you to be admitted to a hospital. Thus, even if you stay overnight in a hospital for observation, it is still considered an outpatient hospital stay. As an example, you enter a hospital for non-inpatient surgery and the doctor decides to keep you overnight for unusual post-surgery symptoms that need to be observed. The doctor does not write any admission order but does send you home the next day. You are not considered an inpatient and all services are covered under Part B.
A more complex example would be if you go to the emergency room and you stay there for 2 nights. The first night you are kept only for observation. On the second day, the doctor decides to admit you. You are not considered an inpatient until that second day when the doctor creates the admission order. At this point, since there was an admitting order, Part A kicks in to pay both the second day as an inpatient and any 3 previous days with non-inpatient services rendered. Thus even though you are not an inpatient on the first day, Part A pays those medical costs due to the doctor writing the admitting order the following day. Any physician charges will be paid under Part B.
** Does Medicare cover them?
Yes, all eligible outpatient care is covered by Medicare. Inpatient services are covered by Medicare also, however, each category is regulated differently for costs and coverages.
** Outpatient surgery
Outpatient surgery is outpatient care under Part B coverage since a doctor performs the services outside a hospital setting. There is no admission order to stay in a hospital by the treating doctor.
** Outpatient services covered by Medicare Part B
Seeking medical care in a doctor’s office, diagnostic tests such as x-rays and lab tests, outpatient surgery, emergency department services, observation services or doctor’s services while an inpatient fall under Part B coverage as outpatient care. Any other hospital services without the doctor’s order to admit you fall under Part B coverage as Medicare outpatient.
** Outpatient costs
As a Medicare outpatient under Part B coverage, all services are covered 80% except for diagnostic tests like lab work or x-rays. These diagnostic tests are covered 100% under Part B. You will be responsible for 20% of the Medicare-approved amount after you pay the Part B deductible, unless you have the secondary insurance coverage called Medigap. Over the counter drugs and prescriptions prescribed by the doctor are not covered under Part B.
Medigap, also called Medicare supplement, will pay all deductibles and coinsurance of 20% owed. Note that some medical providers charge a fixed dollar amount called a “copay”, which the patient is responsible for in addition to coinsurance. Coinsurance is defined as the percentage of medical costs Medicare does not cover, that being 20%.
** Get Additional Medicare Coverage With Supplement Plans
Since Part B mostly covers only 80% for covered services, you can virtually purchase 100% medical coverage by obtaining a Medicare supplement that pays the 20% coinsurance plus any deductible for the year. This is applicable for the Original Medicare consisting of Parts A and B. Medicare Advantage plans and PPO’s have slightly different costs and rules.
Medicare Advantage Plans differ where you are only able to see medical providers within an assigned network of doctors.
The best time to enroll in a Medicare supplement plan is the first 6 months after you are first eligible to join Medicare. After enrolling in Medicare, this 6-month window allows you to enroll in Medigap without restrictions as far as pre-existing medical conditions. After the 6 month window, the supplement insurance plans can refuse to accept you for pre-existing medical conditions.
