4 things to know about billing for hospital observation

A long-fought battle over fair reimbursement rates for both in-network and out-of-network medical coverage has largely pitted payers against providers. Unfortunately, patients are often caught in the crosshairs, strapped with unanticipated healthcare bills that can have detrimental financial effects.

These surprise bills can occur when patients are admitted to the hospital. However, they can also occur when hospitals provide observation care for patients who are not well enough to go home but not sick enough to be admitted, according to a Kaiser Health News report.

Here are four things to know about billing for hospital observation.

1. During hospital observation, nurses check on the patients and physicians order treatments. But surprise bills for hospital observation can come up because Medicare considers this outpatient care, according to Kaiser Health News.

2. Medicare does not cover most of the bill for observation care. Patients instead usually have co-payments for physicians' fees and each hospital service, and also must pay for any routine drugs they regularly take at home for chronic conditions, the report states.

3. Observation patients cannot receive Medicare coverage for follow-up care in a nursing home, although their physicians recommend it, according to Kaiser Health News

4. Medicare officials are working to finalize a notice designed to notify patients regarding observation care, according to Kaiser Health News. This practice is required under federal law that went into effect in August. Hospitals will likely begin using the notices in January, according to the article.



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