How a Medicare-Covered Hospital Stay Could Cost You Thousands

A seemingly insignificant hospital in or outpatient label can add tens of thousands of dollars to your Medicare beneficiaries’ out-of-pocket costs after a hospital visit.

When Medicare beneficiaries are treated in a hospital, whether they are labeled “inpatient” or “outpatient” can make a costly difference in the bill — potentially increasing out-of-pocket costs by thousands of dollars.


You probably think these two terms simply define whether the person spent the night in the hospital. But Medicare uses the words differently.

Your classification as an inpatient or outpatient is what Medicare calls your “hospital status,” and it can affect your out-of-pocket costs for a variety of services. As Medicare defines these terms:

  • “You’re an inpatient starting when you’re formally admitted to the hospital with a doctor’s order. The day before you’re discharged is your last inpatient day.
  • You’re an outpatient if you’re getting emergency department services, observation services, outpatient surgery, lab tests, or X-rays, or any other hospital services, and the doctor hasn’t written an order to admit you to a hospital as an inpatient. In these cases, you’re an outpatient even if you spend the night in the hospital.”

Note that the difference between these two statuses can be nuanced, essentially coming down to what a doctor writes in your chart. As Medicare puts it, “your doctor must order [inpatient] admission and the hospital must formally admit you in order for you to become an inpatient.”

This inpatient status creates a normal medicare payments for you that reduces your out of pocket expense significantly.

In our effort to give solutions for money problems we at The Money Connection are always on alert for improving your financial situation.

E. Bishop III, The Money Connection.Com

“Following The Money People”

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