Barbara Fradkin – Special to FLORIDA TODAY

Reader question: What is the difference between inpatient and observation status while in the hospital? Is it handled differently by Medicare?  

Answer: Inpatient status means that you have been formally admitted to a hospital with a doctor’s order for medical problems that require highly technical skilled care.

Observation status means that you have a condition that doctors want to monitor to see if you require inpatient admission.

The business of healthcare is ever-changing and the devil is often in the details.

The difference between “inpatient” and “observation” status at the hospital doesn’t sound like it would be very important, but it is.

A patient who arrives through the Emergency Room is considered to be on observation status, which is covered under your Medicare, Part B.

Why? Because the doctor has not yet written an order to admit you to the hospital as an inpatient.

In cases like these, you are still considered an outpatient, even if you spend the night at the hospital.

The decision for inpatient hospital admission is based on your doctor’s judgement and your need for medically necessary hospital care.

Only once the doctor writes the order for inpatient care, does your status change and the inpatient stay “count” begin.

Will you need rehabilitation afterwards?

Importantly, Medicare does not count the time you are in observation status toward the three-day “inpatient” hospital stay required to cover expenses for subsequent rehabilitation.

Physicians are feeling the heat from their patients, regarding in-patient versus observation status, due to the significant financial gap between the two.

If you have secondary insurance with your Medicare, then there usually is not a problem. But for those who cannot afford that second insurance (Medigap), it can become a financial burden.

If you get the Medicare Outpatient Observation Notice at the time of discharge, there is no right to appeal.

However, once you are discharged, you may appeal the hospital care. It helps if you acquire from the hospital written notice explaining why they insisted on observation status.

You also will need supportive documentation from your doctor to appeal the case.

For seniors, hospital status is a situation where it pays to be your own best advocate.

Many doctors are unaware of the potential issues with Medicare. Talk to your doctor and ask for admission as an inpatient as early as possible — especially if you will need to go to a skilled care facility for short term rehabilitation.

Remember: A patient’s status is always assigned based on how the hospital stay ended, not how it started. See more about this important subject online at


One Senior Place is a marketplace for resources and provider of information, advice, care and on-site services for seniors and their families. Questions for this column are answered by professionals in nursing, social work, care management and in-home care. To submit a question, send an email to or visit One Senior Place, The Experts in Aging at

Barbara Fradkin is a Social Worker, Certified Care Manager and the Director for One Senior Place, Viera.