Does Medicare Pay For Observation?

Does Medicare Pay For Observation?

Medicare pays for observation care only when the physician needs to monitor or keep an eye on a patient's condition. This monitoring may require frequent visits to the patient's bedside to provide care.

Medicare Part B usually pays for at least the first 48 hours of observation care. However, the exact length of time a patient can receive Medicare-covered observation care varies. Generally, physicians must use their medical judgment to make decisions about how long a patient needs to be observed.

Medicare Part B also covers observation care for patients who are waiting for admission to a hospital inpatient bed. These patients, who are not admitted to the hospital, are known as "wait" or "hold" patients.

Medicare Part B does not cover observation care for patients who are waiting for a bed to become available in a skilled nursing facility (SNF) or in a long-term care facility (LTF). However, it may cover certain tests or procedures done during the wait for an SNF or LTF bed, such as certain diagnostic tests.

Medicare Part B covers certain services during observation care and if the patient is admitted to the hospital. They may include:

inpatient services, such as care in a hospital's intensive care unit (ICU) or coronary care unit (CCU), depending on the patient's condition

some services provided by hospital outpatient departments, such as physical therapy, occupational therapy, and speech therapy

outpatient prescription drugs

care in a hospital's emergency department (ED), which includes necessary x-rays, laboratory tests, and electrocardiograms (EKGs)

radiation therapy, physical therapy, occupational therapy, and speech therapy if you are receiving these services as part of your inpatient care, and

imaging tests or procedures performed in a hospital outpatient department, such as x-rays, laboratory tests, and some electrocardiograms.

Medicare Part B does not cover the following services during observation care and if the patient is admitted to the hospital:

the services of doctors who do not have admitting privileges at the hospital where the patient is hospitalized, and

the services of out-of-network doctors.

If you do not have Medicare Part B, you can still get Medicare-covered observation care. You must pay for the services out of your own pocket. If you have Medicare Part B but want to opt for observation services that are not covered, you can do so. You will be responsible for paying for these services.

For more information about observation care, go to Medicare.gov and enter "observation care" in the search box.

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What are the rules for "hold" or "wait" patients?

Medicare Part B does not pay for the services of doctors who do not have admitting privileges at the hospital where the patient is hospitalized. However, it will pay for certain tests or procedures done during a patient's wait for a hospital bed. These include certain diagnostic tests, radiation therapy, physical therapy, occupational therapy, speech therapy, and certain outpatient prescription drugs.

When a patient is admitted to a hospital as an inpatient, the hospital will admit the patient first. Then the hospital will make a "hold" or "wait" order for a bed to become available in a SNF or an LTF. Usually, both the hospital and the SNF or the LTF get paid for the patient's stay. However, if the patient is not admitted to the hospital, Medicare will not pay for his or her stay in a SNF or an LTF.

What are the rules for "hold" or "wait" patients who are waiting for admission to a hospital inpatient bed?

Medicare Part B will pay for hospital outpatient services and physician services for "hold" or "wait" patients during the time they are waiting for a bed to become available in a hospital.

Certain services, such as those provided by hospital emergency departments (EDs), radiation therapy, physical therapy, occupational therapy, and speech therapy, are covered only if the services are provided as part of a patient's inpatient care.

What are the rules for Medicare Part D (prescription drug coverage)?

Medicare Part D covers outpatient prescription drugs that are medically necessary, which means these drugs are routinely prescribed for the patient's condition. Medicare Part D covers outpatient prescription drugs that are not medically necessary if they're prescribed to treat a condition that temporarily interferes with the patient's normal activities.

Medicare Part D will cover outpatient prescription drugs when a doctor determines that a patient needs them on a temporary basis. Medicare Part D may also cover outpatient prescription drugs when a doctor determines that a patient may need them on a regular basis.

For example, if a doctor determines that a patient has a temporary condition that requires outpatient prescription drugs, Medicare Part D will cover the prescription drugs if they're medically necessary.

For more information about prescription drug coverage, go to Medicare.gov and enter "prescription drug coverage" in the search box.

What are the rules for Medicare Part C (Medicare Advantage)?

Medicare Part C is a voluntary program. If you enroll in Medicare Part C, you will have the same coverage as you would have with traditional Medicare. If you continue to receive your health care coverage from a traditional Medicare provider, you will not have to change plans, doctors, or hospitals.

Medicare Part C is also called Medicare Advantage. Medicare Advantage plans are run by private insurance companies that have contracts with the federal government. Medicare Advantage plans provide all the benefits that traditional Medicare does, plus additional services. These plans may also cover the services of doctors who do not have admitting privileges at the hospital where the patient is hospitalized or out-of-network services.

For more information about Medicare Advantage plans, go to Medicare.gov and enter "Medicare Advantage" in the search box.

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