Medicare: Inpatient or Outpatient?

Staying in the hospital without being formally admitted can cost you thousands of dollars

Jean Arnau spent five days in the hospital with a fractured spine — lying in a hospital bed, wearing a hospital gown and ID bracelet, eating hospital food and receiving regular nursing care.

But when she was discharged and needed to transfer to a rehab facility, her family learned that she had never been formally admitted as an inpatient to the hospital at all. Instead, she'd been classified as an outpatient under "observation" — a status that would cost her thousands of dollars.

Most patients would regard as meaningless the seemingly slight distinction between the two labels — after all, they're getting exactly the same kind of care. But it can have costly consequences.

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