Determining the Appropriate Level of Health Care; Outpatient Observation, Extended Care Recovery or Inpatient Admission?

Determining the Appropriate Level of Health Care; Outpatient Observation, Extended Care Recovery or Inpatient Admission?

Charles Gizara, MS, BSN, RN, CCM
Director Clinical Operations

Hospitals across the country are evaluating the manner in which patients are classified when they receive services in the hospital setting. As a result of changes in our regulatory systems, we are now required to implement a process that clearly distinguishes the status and level of care for patients receiving care in the hospital.

AGH is currently developing policies and procedures to assist healthcare providers (Physicians, Nurses, etc…) to identify patients according to the level of care they need and if they require placement in a hospital bed after elective surgery, a visit to the E.D. , or directly from the Physicians office. Patients that are assigned to a bed in the hospital will be classified as Observation, Extended Care Recovery, or Inpatient.

What’s the Difference-

Observation: (Outpatient Services)
Observation is defined as the use of a hospital bed and period monitoring by hospital staff to evaluate a patient’s medical condition to determine the need for possible inpatient admission. Although patients may be in a hospital bed, services are classified as “outpatient” and may last a few hours up to 48 hours. On extremely rare occasions, services may last up to 72 hours. Examples include; chest pain, asthma, abdominal pain (not requiring surgery), kidney stones, nausea / dehydration, hypertension, transient ischemic attacks (TIA’s), anemia, weakness, and other conditions. Since services are provided as outpatient, Medicare does not cover self-administered medications during this time and patients insured under Medicare are responsible for those costs. Examples of self administered medications include, but are not limited to; insulin, blood pressure medications, Coumadin, diuretics, and many other medications. Patients may be discharged to home or admitted if there is a medical need for additional time or interventions.

Extended Care Recovery: (Outpatient Services)
Extended care recovery (ECR) is the use of a hospital bed and periodic monitoring by hospital staff to evaluate a patient’s response after surgery. ECR is an outpatient service for surgical patients that automatically includes time to monitor their condition. The patient may be discharged to home or admitted if they experience complications. Since services are provided as outpatient, Medicare does not cover self-administered medications during this time and patients insured under Medicare are responsible for those costs.

Both Observation and Extended Care Recovery are covered under Medicare part “B”. Services do not count towards your annual inpatient deductible and patients are responsible for 20% of the Medicare approved amount after meeting the part “B” deductible.



Inpatient Admission:
The placement of a patient in a hospital bed for inpatient care when the physician / surgeon knows that treatment requires more than 48 hours of care for a given condition and they meet medical criteria for inpatient admission. Services are covered under part “A” which apply to the annual inpatient deductible. Self administered medications are covered under this level of care.

To review information from Medicare that outlines the various levels of hospital care and benefits, visit:
www.medicare.gov/Publications/Pubs/pdf/11435.pdf


To obtain detailed information on how Medicare covers hospital services, including premiums, deductibles, and copayments, visit:
www.medicare.gov/Publications/Pubs/pdf/10050.pdf

You may also call 1-800-MEDICARE (1-800-633-4227). TTY users should call: 1-877-486-2048

At this time these services will be implemented April 2011. If you have questions or comments regarding coverage for services or self-administered medications, please contact Medicare and/or your local legislator.