What is the Appropriate Level of Health Care: Outpatient Observation, Extended Care Recovery or Inpatient Admission?
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
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.
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:
To obtain detailed information on how Medicare covers hospital services,
including premiums, deductibles, and copayments, visit:
You may also call 1-800-MEDICARE (1-800-633-4227). TTY users should call:
If you have questions or comments regarding coverage for services or self-administered
medications, please contact Medicare and/or your local legislator.