Did you know that you could be admitted to a hospital as an outpatient? This could cost you big if you’re on Medicare!

Yes, you can be in the hospital and still be classified as an “outpatient.” Because many people do not realize this, starting March 8, 2017, Medicare will actually require hospitals to notify you within 36 hours if your status has changed to outpatient. That notice is called the Medicare Outpatient Observation Notice (MOON).

What Outpatient Status Means

• If you don’t have Medicare Part B coverage, you’ll be responsible for the entire cost of your hospital stay. If you do have Part B, you’ll pay 20% of the cost unless you’re covered under a Medicare Supplement Plan.
• Drug prescriptions filled in the hospital are usually billed as part of the hospital stay. If you’re responsible for the full hospital bill, however, you’ll have to pay for the drugs up front and get reimbursed by your Part D drug plan later. This could be difficult.
• Medicare requires a 3-day inpatient stay in a hospital prior to paying for charges at a Skilled Nursing Facility (SNF). Therefore, if you’re considered a hospital outpatient, Medicare will not pay for follow-up care at an SNF.

What you don’t know can cost you. So when we advise LNWM clients on Medicare coverage, we pay special attention to the “gotcha” situations, such as outpatient status. For more info on outpatient status, check out this this blog post by the AICPA (The American Institute of CPAs).