If you were under observation in the hospital, you might get a bill for pills like your usual blood pressure or diabetes medicine. Medicare says that in most cases, Part B doesn't pay for these "self-administered drugs" in hospital outpatient settings, and observation is an outpatient service. Your Medicare drug plan (Part D) may pay you back for covered drugs if you send it a claim.
What are self-administered drugs?
Medicare's hospital benefits booklet describes them as prescription medicines you'd normally take on your own, like daily drugs for blood pressure or diabetes. When you're an inpatient, Part A generally covers drugs you get in the hospital. When you're an outpatient, including under observation, Part B usually doesn't pay for them.
Over-the-counter drugs, like aspirin or laxatives, are generally not covered by drug plans either.
Not sure whether you were inpatient or observation? See observation status vs. inpatient and the Medicare Outpatient Observation Notice.
Why did the hospital bill me for them?
Medicare's booklet explains that most hospital pharmacies don't take part in Part D. So the hospital may bill you directly for the drugs, and you'd send the claim to your drug plan yourself.
Hospital drug charges may be higher than what you pay at your own pharmacy, so ask your plan to pay its share.
Will my Part D plan pay me back?
It depends. Medicare's booklet says:
- Your plan will only cover drugs on its drug list (formulary), unless you get an exception.
- Your plan will check whether you could have gotten the drug from an in-network pharmacy.
- If the plan covers the drug, you may need to pay the difference between what the hospital charged and what the plan paid, plus your usual deductible, copay, or coinsurance.
- That amount counts toward your Part D out-of-pocket costs if the claim goes to your plan.
Medicare.gov lists the Part D yearly out-of-pocket cap at $2,100 in 2026 and $2,400 in 2027. See the Part D out-of-pocket cap.
How do I ask my drug plan for a refund?
- Get an itemized hospital bill that lists each drug by name, strength, date, and charge. See how to ask for an itemized hospital bill.
- Call your Part D plan (the number is on your drug plan card) and ask how to send a paper claim for drugs from an out-of-network pharmacy.
- Fill out the plan's claim form, and attach the itemized bill and proof you paid.
- Explain the situation in a short note: you were an outpatient under observation and the hospital pharmacy wasn't in network.
- Keep copies of everything.
What to say to your drug plan:
"I was in the hospital under observation from [date] to [date]. The hospital billed me for my regular medicines, [drug names], because Part B doesn't cover self-administered drugs. How do I send a claim to be paid back? Where do I mail or upload it, and is there a form?"
Sample note to include with the claim:
"I was a hospital outpatient under observation at [hospital] from [date] to [date]. The hospital pharmacy isn't in your network. These were my regular prescription drugs, which I couldn't get from my own pharmacy while in the hospital. Please review this claim for payment. The itemized bill and proof of payment are attached."
Medicare's appeals booklet says plans decide requests to pay you back within 14 calendar days.
What if the plan says no?
If a drug isn't on the plan's list, Medicare's booklet says you can ask for an exception or appeal the plan's decision. The plan must send a written decision that explains how to appeal. See Part D formulary exceptions and how to appeal a Medicare denial, step by step.