Question: My mother went into the hospital from a fall. When released 4 days later, the hospital told my father that she was “not admitted” only “under observation” for the time there. Why would they do this? Is it something with the hospital billing and Medicare coverage?

Answer:  Unfortunately this is something more and more elders and their families are running in to.  This does relate to hospital billing and especially the crackdown on hospitals in regards to over hospital billing for stays.  This was never really intended to be a status for patients for more than about 24-48 hours, but increasingly families are experiencing what yours did with stays upwards of 3-10 days classified as observation status.  This is particularly problematic when a patient needs inpatient skilled nursing care afterwards, because Medicare requires a 3 day hospital stay (with admitted status) in order to cover subsequent rehabilitation or skilled nursing in a skilled nursing facility.  Additionally, the patient may be responsible for some services received during the hospital stay, which is essentially treated as an outpatient stay.

Be aware that Medicare recipients do have the right to appeal coverage decisions.  This is also an important issue for families to be aware of in order to be able to ask questions and get more details when a loved one is in the hospital.  The Medicare coverage (or non-coverage in the case of no qualifying hospital stay) of inpatient rehabilitation can be worth thousands of dollars, and may be key to a loved one’s recovery.


Shannon Martin, M.S.W., CMC
Aging Wisely, LLC
Clearwater, Florida  33756

Medicare and Hospital Billing – “Admitted” vs. “Under Observation” was last modified: November 23rd, 2022 by Phil Sanders