Does Medicare Pay for Drugs While in Hospital?

Navigating healthcare coverage can be challenging, especially during a hospital stay. A common question is whether Medicare covers medications while in the hospital. The answer depends on the Medicare part and the patient’s official status as an inpatient or outpatient. Understanding these distinctions helps clarify financial responsibilities.

Drugs Under Medicare Part A

Medicare Part A, known as Hospital Insurance, generally covers the cost of prescription drugs when a beneficiary is formally admitted to a hospital as an inpatient. For a hospital stay to be considered inpatient, a doctor must issue an official order for admission, and the patient’s care is typically expected to require at least two midnights of medically necessary hospital services. This formal admission means that all necessary medications, supplies, and services provided during the inpatient stay are bundled into the overall hospital bill.

If a patient is officially an inpatient, they usually do not receive separate charges for the drugs administered by the hospital. This comprehensive coverage under Part A applies to all medications used as part of their treatment. The Part A deductible, which for 2025 is $1,676 per benefit period, applies to the inpatient stay, covering the initial costs before Medicare pays.

Drugs Under Medicare Part B

Medicare Part B, Medical Insurance, covers drugs administered in an outpatient hospital setting. This includes situations where a patient is under “observation status,” receives emergency department care without formal admission, or utilizes hospital outpatient clinics. Even if a patient spends a night or more in the hospital under observation, they are still considered an outpatient for billing. Hospitals must provide a Medicare Outpatient Observation Notice (MOON) if observation services extend beyond 24 hours.

Drugs covered under Part B are those not self-administered, such as intravenous medications, injections, or certain chemotherapy drugs provided in a clinic setting. Unlike Part A’s bundled coverage, patients under Part B are responsible for deductibles and copayments for these drugs and services. After meeting the annual Part B deductible, beneficiaries pay 20% of the Medicare-approved amount for covered outpatient services, including administered medications.

Drugs Under Medicare Part D

Medicare Part D, the prescription drug benefit, does not cover medications administered or provided directly by the hospital during an inpatient stay or outpatient visit. Drugs covered under Part A or Part B are excluded from Part D coverage for that specific care setting. Part D primarily covers outpatient prescription drugs a patient would fill at a retail pharmacy or receive via mail order.

Part D may apply for self-administered medications in specific hospital contexts. If a patient is under observation status and needs self-administered drugs, like daily maintenance medications, Part B does not cover them. In these cases, the patient’s Part D plan might cover these drugs, though the patient may need to pay out-of-pocket initially and then submit a claim for reimbursement. Part D plans use formularies (lists of covered drugs) and have specific pharmacy networks relevant for filling prescriptions upon discharge.

Factors Affecting Coverage

The primary factor influencing Medicare drug coverage in a hospital is the distinction between inpatient and outpatient status. This classification, determined by a doctor’s order and formal hospital admission, dictates whether medications fall under Part A or Part B. A patient can remain an outpatient even with an overnight stay if under observation status, impacting their out-of-pocket costs and drug coverage.

Financial responsibilities vary based on this status. Part A involves a single deductible for an inpatient stay, while Part B can entail multiple copayments for each outpatient service, including drug administration. Medicare Advantage plans (Part C) must provide at least the same coverage as Original Medicare (Parts A and B), but their cost-sharing structures and networks may differ. Individuals should confirm their official hospital status and understand their specific Medicare plan details to anticipate coverage for drugs and other services.