CMS Updates Medicare Outpatient Observation Notice (MOON)
By Juliet Ugarte Hopkins, MD, ACPA-C
On Friday, February 20, 2026, the Centers for Medicare & Medicaid Services (CMS) officially reauthorized the Medicare Outpatient Observation Notice (MOON). The MOON informs Medicare and Medicare Advantage beneficiaries that they are receiving Observation services as Outpatients rather than being hospitalized as Inpatients. Hospital compliance and case management teams along with physician advisors must be aware of this recent update to the notice to ensure seamless implementation and avoid regulatory penalties.
CMS updated the Office of Management and Budget (OMB) expiration date to February 28, 2029. Fortunately, when CMS updates the OMB expiration date on a required notice, hospitals are not expected to pivot overnight. They can continue using existing stock of the expired MOON for 60 days until April 20, 2026, at which point the new form should be used. Hospitals still utilizing the old version of the MOON after this deadline risk compliance violations.
The purpose of the MOON remains unchanged; however, it does look a bit different from the last version. As before, it requires some reasoning about why the patient is not in Inpatient status. There is space in a white box on the first page of the form to include this information and hospitals can even add standard, printed verbiage to which staff can write in more specifics pertaining to the patient. Given many hospitals may rely on non-clinical staff to deliver this notice, the most simplified options to include may be the best ones, such as:
Your physician has determined a period of observation services will be needed before they can determine if your medical condition [EHR-inserted diagnosis code] requires further treatment as a hospital inpatient, based on Medicare policy, or if your medical condition can be treated as an outpatient followed by discharge from the hospital.
Upon further review of your hospital admission, your physician and the hospital have determined that your medical condition [EHR-inserted diagnosis code] does not meet Medicare inpatient criteria. As a result, your physician has ordered the discontinuation of inpatient services and initiation of outpatient observation services.
While transitioning to the newly dated form, hospital staff must ensure they continue to meet CMS's procedural requirements for the MOON. Namely, delivery is required for all patients covered by Medicare as primary or secondary coverage in addition to patients covered by Medicare Advantage (Medicare Part C) plans; it is required for all patients who have received at least 24 hours of Observation services while in Outpatient status (but can compliantly be given to patients who have received less than 24 hours); it must be delivered to the patient no later than 36 hours after Observation services begin; there must be a clearly documented clinical reason explaining why the patient is receiving Outpatient Observation services rather than being admitted as an Inpatient; providing the physical document is not enough – the written notice must be accompanied by an oral explanation to ensure the beneficiary fully understands the financial and clinical implications of their status as Outpatient.
To facilitate the transition to the updated MOON, hospitals should reference the following official CMS resources:
FFS & MA MOON: This is the primary portal for the most up-to-date form downloads. Hospitals can access the latest English and Spanish versions of the MOON, available in both standard and large-print ZIP files.
Beneficiary Noticed Initiative (BNI): Compliance officers should use this page to monitor the "What's New" section for any upcoming policy shifts regarding the MOON or other critical discharge notices.
CMS Manual System Pub 100-004 Medicare Claims Processing Transmittal 3695 Change Request 9935: Though this reference is on the older side, it remains the definitive primary reference for form completion requirements, delivery protocols, and documentation standards.
Hospital compliance and IT departments should update their EHR systems as soon as possible with the new version of the MOON and prepare updated workflows to integrate the new MOON before the 60-day grace period expires on April 20, 2026.