Hospitals provide observation care for patients who are not well enough to go home but not sick enough to be admitted. The care may seem just like what an admitted patient receives — they are in a hospital room, nurses check on them and doctors order treatments.

But surprises can arise over billing because Medicare considers this outpatient care. So instead of Medicare picking up most of the bill, patients usually also have copayments for doctors’ fees and each hospital service, and they have to pay whatever the hospital charges for any routine drugs the hospital provides that they take at home for chronic conditions.

This video by Francis Ying and Thu Nguyen, narrated by Lynne Shallcross, explains what happens.

For more information, check out Medicare’s primer on observation care and CHL‘s FAQ.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.