What you should know about Medicare and inpatient vs. outpatient care

Those of us with ANCA vasculitis can find ourselves in the hospital for a variety of reasons. If you’re on Medicare, there is a little-known caveat related to hospitalizations that are coded as outpatient for observation. I learned this the hard way and want to be sure you know about it. I also learned there is a law in place to help protect us.

Here’s what I didn’t know and what I need you to know before you’re the one in the gown: If you’re admitted to the hospital as an inpatient, your medications are part of your care. But a lot of us never get admitted at all. We’re held “under observation” — sometimes for a night or more — and treated like inpatients in every way except on paper. That matters a lot in terms of the bill you may receive for oral meds, which can be deemed “self-administered” — even though they’re administered by a nurse — and are billed under part D and not under part B coverage.

That’s what happened to me. The IV medications from a hospitalization were billed the way you’d expect: processed through my insurance, in network, and unremarkable. The oral medications, however, were billed as if I’d walked into a pharmacy. Those can be billed at list price or even higher. For example, for me, Tylenol was billed at $6 a pill.

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There is a law called Medicare Outpatient Observation Notice (MOON) that says hospitals must “provide notification to individuals receiving observation services as outpatients for more than 24 hours explaining the status of the individual as an outpatient, not an inpatient, and the implications of such status.” In other words, they’re supposed to tell you plainly that you haven’t been admitted, that it’s outpatient care, that you’ll be billed for each pill you are given, and that you have to file your own claim to potentially be reimbursed.

My insurance requires a separate claim form for every medication, which means I’d need to file about 15 claims. Also, Medicare part D generally won’t reimburse you for over-the-counter drugs like Tylenol and MiraLAX.

Here’s what I wish someone had told me: The moment you’re settled into the hospital, ask whether you’ve been admitted or are under observation. Don’t assume that overnight means inpatient. If it’s observation, ask for the MOON notice and don’t let anyone tell you it doesn’t apply to you.

Also specifically ask about your daily pills: whether the hospital will bill them separately and whether you’re allowed to use your own medications from home. Many hospitals have a process for this, sometimes called “patient’s own medications,” where your pharmacy-labeled bottles can be verified by staff and used instead of hospital-billed doses. It has to be requested and is almost never simply offered.

If the bill comes anyway, ask for proof that they provided the MOON notice in writing. You are allowed to push back, calmly and clearly, in writing. I did.

Note: ANCA Vasculitis News is strictly a news and information website about the disease. It does not provide medical advice, diagnosis, or treatment. This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website. The opinions expressed in this column are not those of ANCA Vasculitis News or its parent company, Bionews, and are intended to spark discussion about issues pertaining to ANCA vasculitis.