Medical Care Classification:
How to Determine Inpatient vs Outpatient vs Observation Care

Healthcare can be quite complicated, even for doctors. When a patient arrives at a hospital, the first decision you, as a healthcare provider, need to make is whether to admit the patient for inpatient treatment or treat them as an outpatient. Understanding when to classify a patient as inpatient or outpatient is important. It not only helps you treat your patients better but also ensures that your hospital runs efficiently without any hassles. 

In fact, proper patient classification can help hospitals save millions of dollars annually. This is primarily due to fewer billing disputes and the right resource management. 

To provide the right medical treatment to patients, it is important to understand how inpatient and outpatient care works. In this article, we will learn how to determine inpatient vs outpatient by learning about these care classifications in detail. We will also explore the in-between category of ‘observation status’ and how it impacts your hospital operations.

What Is Inpatient Care?

Inpatient care involves medical treatment or services that require a patient to be admitted to the hospital for at least one night. It includes patients who:

    • Typically have serious medical conditions
    • Are recovering from life-threatening diseases

Inpatient care requires constant monitoring, nursing care, and support. It includes the following medical procedures:

    • Serious health issues that require constant monitoring. For example, heart attacks, seizures, and others
    • Complex surgeries, for instance, organ transplants, heart bypass surgery, and more
    • Labor and childbirth
    • Severe burns or similar traumatic injury
    • Chronic diseases, for example, cancer, dialysis, and more

As a more detailed example, a patient who has a heart attack needs to be admitted to your hospital as an inpatient. This patient would need round-the-clock monitoring for some days in your ICU. The said patient would require injection treatment and special instruments to support the recovery journey. Once stabilized, the patient would be transferred to a regular recovery room before discharge.

What Is Outpatient Care?

Outpatient care refers to any medical procedure that does not require patients to stay overnight in a hospital. These patients receiving outpatient care generally visit the hospital during the day to receive the necessary care and return home the same day. These procedures have shorter recovery times and carry fewer risks. Therefore, they do not require overnight hospital stays.

Outpatient treatments include the following types of medical services:

    • Routine checkups and health screenings
    • Vaccinations
    • Blood tests 
    • X-rays, CT scans, and MRIs
    • Minor surgical procedures, for example, biopsy, joint repair, and more

As a more detailed example, let us consider a patient with a wrist injury. It would be difficult to diagnose the damage caused by merely looking at it. The treatment plan would include taking X-rays and evaluating them. When the doctors are through with the imaging process, they can start different treatment procedures like placing a cast or administering some drugs. The patient is then permitted to return home.

Inpatient vs. Outpatient – What’s the Difference?

Although inpatient and outpatient care both offer important medical services, they differ significantly. Let us explore these differences to optimize treatment plans and make informed patient care decisions.

Aspect

Inpatient Care

Outpatient Care

Type of Care Involves high-intensity care. Involves lower-intensity care.
Length of Stay At least one overnight stay. No overnight stay is required. The patient is treated and discharged on the same day.
Monitoring Requires round-the-clock, constant monitoring. Does not require monitoring. However, follow-up visits are encouraged.
Risks and Complications Involved Involves higher risks as procedures done could be more invasive in nature. Lower risk. Complications, if any, can be addressed during follow-up visits or emergency care (in extreme situations).
Costs Involved Expensive due to longer hospital stays and intensive care. Less expensive.
Recovery Duration Longer recovery periods within the hospital. Recovery is usually done at home.
Patient Experience Hospital environment with set routines, healthy meals, and 24-hour nursing care. Patients can recover in the comfort of their homes.
Post-discharge Care A structured discharge plan with possible home care or rehabilitation visits. Follow-up visits.
Hospital Resources Uses a wide range of hospital resources. For example, advanced medical equipment, ICU support, surgical teams, and more. Uses fewer resources like examination rooms, basic equipment, and outpatient surgery areas.
Staffing Requirements Requires extensive hospital staff including dietary services and housekeeping. Limited staff involving fewer healthcare professionals.
Documentation Extensive documentation for patient diagnosis, monitoring, treatment plans, and discharge formalities. Less documentation involving procedure details and follow-up care recommendations.
Billing and Invoicing Complex billing process. For example, room charges, equipment, surgery costs, specialized care, and more. Straightforward billing covers the procedure costs and medical resources.

Important Things to Know about Inpatient and Outpatient Status

Here are a few points to remember when choosing the right kind of care for your patients.

    • You must follow a set of criteria to determine if a patient should be admitted as an inpatient. This could include a number of tests to evaluate how bad the illness is and whether the illness requires that patient to be in high-level care.
    • Care classification significantly impacts insurance coverage. You must convey the type of care classification to your patients in advance. This will help avoid misunderstandings regarding their treatment plans and insurance coverage. 
    • Some patients whose condition is uncertain can be kept under observation to see how they respond to treatments. You can keep them in the hospital for a short period (in most cases, up to 48 hours – more details linked here) to determine if they can go back home or if they need to stay longer in the hospital as an inpatient.

Understanding Observation Status in Patient Care

Observation status applies when a patient needs to be closely monitored to determine if further treatment or admission is needed. It allows healthcare professionals to assess patients’ condition for a shorter period (usually less than 48 hours) to decide on future treatment plans. It is a temporary care classification that falls between inpatient and outpatient care.

Patients are usually placed under observation status if:

    • They are presenting symptoms that are not immediately clear and require further evaluation.
    • They had a minor surgery or treatment procedure that requires temporary monitoring to ensure they are stable before being discharged.
    • They have chronic conditions that may require additional treatment based on initial interventions.

Observation status ensures you make informed care-related decisions while making sure your patients receive appropriate monitoring.

Optimize Your Decision-Making with AdmissionCare

Making accurate decisions about the right kind of patient care classification is crucial for enhancing patient outcomes and hospital efficiency. However, navigating the complexities of this classification can be quite challenging with constantly changing regulations, especially when choosing between inpatient and observation status

This is where innovative solutions like AdmissionCare help.

AdmissionCare is an all-in-one tool to streamline your care classification process. It automates criteria for admitting physicians to accurately determine and document the level of care a patient needs. 

    • Integrates seamlessly with your EHR tool to simplify the patient admission process.
    • Determines the most appropriate bed status for each patient depending on their illnesses.
    • Aggregates and synchronizes all clinical documentation into the patient’s record.
    • Eliminates the administrative burden on hospitalist and emergency physicians by streamlining admission workflows and reducing interruptions from UR teams and physician advisors. 

Schedule a customized demo today to see how AdmissionCare can improve admissions and optimize your decision-making process.

FAQs

How to identify inpatient and outpatient claims?

How to identify inpatient and outpatient claims?

Inpatient claims are for services provided when a patient is admitted to the hospital for an overnight stay, while outpatient claims apply to treatments or procedures where the patient is not admitted and goes home the same day.

What is the difference between outpatient and inpatient?

What is the difference between outpatient and inpatient?

Outpatient and inpatient care differ in terms of the type of treatment and its duration.

    • Inpatient Care – Requires hospital admission for overnight stays. Continuous monitoring is needed.
    • Outpatient Care – Patients receive care without being admitted. They return home the same day.

How do you know if a CPT code is inpatient or outpatient?

How do you know if a CPT code is inpatient or outpatient?

To determine if a CPT code is for inpatient or outpatient, check the specific code descriptions and guidelines:  

    • Inpatient care – codes start with ‘1’ or ‘0′.
    • Outpatient care – codes start with ‘9’.

What is the difference between inpatient and OPD?

What is the difference between inpatient and OPD?

Inpatient care involves hospitalization while OPD does not. Inpatient care requires patients to stay overnight for treatment and extended observation. OPD care includes providing medical services to patients without hospital admissions or overnight stays.