Get the facts: What is 'level of care?' Does it impact the care I receive during a hospital stay?
Open a newspaper, turn on the nightly news, or scroll through your social feed, and you’re likely to come across conversations about the challenges facing our health care system. These conversations are important, but they’ve also revealed there’s a lot of confusion about health care, and for good reason – it’s very complex.
In this series of articles, we’re setting out to debunk some of the most common myths and misconceptions about health care and health insurance. Our goal is to clear up the confusion and provide the facts about how the health care system works so we can identify solutions to make it better.
When you or a loved one is admitted to the hospital, you might hear terms like inpatient or observation status. These classifications can sound confusing, but here’s what you need to know:
Your level of care does NOT affect the care you receive. It simply refers to how your hospital stay is classified for billing and insurance purposes.
What does “level of care” mean?
Hospitals and health plans use two classifications for hospital stays:
- Inpatient: For patients who need more intensive treatment and are expected to stay longer
- Observation: For patients who need short-term monitoring or treatment, typically less than 48 hours
A level of care review happens during or after your hospital stay. Clinicians review your medical record and apply evidence-based guidelines to confirm whether your care meets criteria for inpatient or observation level of care.
This review does NOT:
- Impact the quality of care you receive
- Change your diagnosis or treatment plan
When is inpatient status appropriate?
Inpatient care requires frequent monitoring, nursing care and support. It could include critical care needs such as:
- Sepsis with organ damage
- Complex surgeries such as organ transplants or heart bypass
When is observation status appropriate?
Observation care is often used for conditions where recovery is quicker, such as:
- Back pain
- Community-acquired pneumonia
- Urinary tract infections
- Monitoring after an event (like irregular heartbeat) or response to therapy
Observation stays can be more effective, affordable and safer for patients. Longer hospital stays can increase risks like infections, falls or confusion.1
How does the cost differ between an inpatient stay and observation?
The way hospitals bill for care impacts what you pay. In 2024, the cost of an average inpatient stay was roughly six times more expensive than an average observation stay.
These differences can impact your out-of-pocket costs, such as copays, amounts applied to deductibles and coinsurance.
If the payment for a hospital stay is not initially approved after care is delivered, it may mean the hospital billed for a level of care that is not consistent with the information in your medical record.
UnitedHealthcare makes level of care assessments to ensure members receive coverage for appropriate, safe care that meets their clinical needs consistent with the information documented in the medical records.
At UnitedHealthcare, we’re working to ensure members have access to appropriate, safe care that meets clinical guidelines and is consistent with medical documentation — while also helping to keep care affordable for everyone.
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