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ancillary services

What are ancillary services?

Ancillary services are medical services provided in a hospital while a patient is admitted, but which can be paid by Medicare Part B (outpatient care). This can happen when the Part A (inpatient) claim is denied because Medicare believes that it was unreasonable or unnecessary for the person to be admitted as an inpatient.¹ Ancillary services include care such as diagnostic x-rays and lab tests, prosthetic devices, physical therapy, and various screening tests, among others.²

In 2013, CMS finalized regulations to make it easier for hospitals to rebill services to Medicare Part B if a claim to Medicare Part A is denied.³ So instead of just being able to obtain payment for the limited list of ancillary services that were previously eligible for Part B coverage in that situation, hospitals can now rebill most services under Part B if the Part A claim is denied.

Footnotes

”Inpatient Ancillary Services” Noridian Medicare. And “Medicare Benefit Policy Manual, Chapter 6 – Hospital Services Covered Under Part B, Section 10” Centers for Medicare & Medicaid Services. Accessed May 29, 2025 ⤶
”Medicare Benefit Policy Manual, Chapter 6 – Hospital Services Covered Under Part B, Section 10” Centers for Medicare & Medicaid Services. Accessed May 29, 2025 ⤶
”CMS finalizes FY 2014 policy and payment changes for inpatient stays in acute-care and long-term care hospitals” Centers for Medicare & Medicaid Services. Aug. 2, 2013 ⤶

How will my costs be affected by inpatient or observation status?

If you aren't actually admitted to a hospital – and are classified as "under observation" – your costs could change significantly.

inpatient care

Inpatient care is medical treatment administered to a patient whose condition requires treatment in a hospital or other health care facility, and the patient is formally admitted to the facility by a doctor.

Medicare Part A ‘hospital insurance’ – coverage of inpatient care

Medicare Part A (hospital insurance) pays for a range of inpatient care in hospitals, skilled nursing facilities, and critical-access hospitals. Part A also covers some home healthcare and hospice services.

How will my costs be affected by inpatient or observation status?

If you aren't actually admitted to a hospital – and are classified as "under observation" – your costs could change significantly.

inpatient care

Medicare Part A ‘hospital insurance’ – coverage of inpatient care

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ancillary services

What are ancillary services?

What are ancillary services?

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How will my costs be affected by inpatient or observation status?

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How will my costs be affected by inpatient or observation status?

inpatient care

Medicare Part A ‘hospital insurance’ – coverage of inpatient care