The Hospital Classification That Will Cost You … and Why It’s So Popular

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As a Medicare recipient, if you’re classified as an “outpatient” during a hospital visit, you have to foot a lot more of the bill. Thank goodness Medicare covers those long inpatient stays.

Except … outpatient stays, it turns out, have gotten longer and longer, a study released by Brown University found. Instead of admitting patients who stay in the hospital over a day or two, hospitals have been classifying more of them as outpatients—often, it seems, without the patients knowing.

The increase has corresponded with a change in Medicare rules. California Watch reports:

For example, since 2003, there has been a federal focus on detecting Medicare fraud and curbing costs through audits of hospital practices, including short hospitalizations. Hospitals can avoid some of this scrutiny, however, if a patient is held on an observation stay, which is not counted as an inpatient hospitalization.

There is a class-action lawsuit against the government over this. According to California Watch:

Federal policy permits hospitals to change an inpatient designation to an outpatient observation status before the patient is released. The lawsuit claims that patients aren’t given proper notice when they are on observation stays or when their status is changed from inpatient to outpatient, and it alleges that patients don’t have a clear-cut right to appeal their observation status.