A New MOON Rises

by Marianne Ramey, Senior Partner, PhoenixMed
Published on Dec 12, 2016

 As required by the Notice of Observation Treatment and Implications for Care Eligibility Act of 2015 (NOTICE Act), hospitals and critical access hospitals must provide the Medicare Outpatient Observation Notice (MOON) to Medicare beneficiaries who have received more than 24 hours of observation services as an outpatient, and such notification must occur no later than 36 hours after the beneficiary begins receiving observation services. Hospitals must provide the MOON effective March 8, 2017 to beneficiaries entitled to Medicare, whether or not the services provided are payable. This includes not only patients enrolled in both Parts A and B, but also beneficiaries enrolled only in Part A and not enrolled in Part B benefits, enrolled in Medicare Advantage, or who have Medicare as a secondary payer.

The purpose of the MOON is to inform Medicare and commercial Medicare Advantage patients in observation status, that they do not qualify as inpatients, and thus are subject to Part B cost sharing requirements (if covered under Part B) or outpatient charges. The hospital must provide both oral and written notice to beneficiaries notifying patients in observation status that they will not meet the 3-day inpatient hospital stay required for Medicare coverage of skilled nursing facility care following discharge.

As you prepare for MOON, it is important to note that CMS is not dictating who must deliver the MOON to a patient; however, the staff member must be able to explain the contents of the MOON and be prepared to answer any potential questions from the patient. 

You will also notice that the MOON has an open text field on page1 of the new form #CMS-10611.  This may present a challenge depending upon who is explaining the MOON. Since a physician is the only authorized individual to make a status determination, we recommend that the physician  complete that section. To make it as convenient as possible, print the form using a check box format to list the reasons.  The section begins with: "You're a hospital outpatient receiving observation services. You are not an inpatient because:...."   The first check box might state something like  "....according to Medicare rules, we are using this time to complete an evaluation of your current condition to determine if you need to be admitted or discharged."  The second box might state, "....we do not anticipate that the care you need right now will exceed two midnights in the hospital and according to Medicare rules, that does not qualify for a hospital admission."  The 3rd box should be "other" to give physicians the opportunity to write their own reasons.  Unlike the Center for Medicare Advocacy which is trying to empower Medicare patients to demand an inpatient admission whether needed or not, the goal for the hospital is to shift the decision for observation from the hospital to compliance with Medicare rules.

We note that a handful of states already require similar notifications, and the Chief Compliance Officer (CCO) should ensure compliance with the new NOTICE Act requirements in addition to applicable state law. To date, CMS is not aware of any state law in direct conflict with or contradictory to the final rule. CMS notes the MOON may already comply with certain state laws. Alternatively, CMS indicates in its final rule that hospitals and CAHs may craft an "Additional Information" statement or separate attachment to be included with the MOON to align the MOON with state law requirements, if possible. However, where state law and the NOTICE Act do not align, hospitals and CAHs may be required to provide duplicate notices at different times. The CCO should consider the state-imposed legal obligations in this regard and determine the most efficient way to comply with both the NOTICE Act and applicable state law in a way that will ensure proper understanding by patients.