On December 8, 2016, the Centers for Medicare & Medicaid Services (“CMS”) posted the final Office of Management and Budget (“OMB”) approved version of the Medicare Outpatient Observation Notice (“MOON”) on its Beneficiary Notices Initiative website. CMS indicated that hospitals and critical access hospitals (“CAHs”) are required to provide the MOON to applicable patients beginning no later than March 8, 2017.

The MOON is intended to assist hospitals and CAHs in notifying patients of their observation status and related implications pursuant to the Notice of Observation Treatment and Implication for Care Eligibility (“NOTICE”) Act enacted on August 6, 2015. Hospitals and CAHs must present the MOON to Medicare patients who are placed in outpatient observation status for longer than 24 hours, verbally discuss its contents with such patients and obtain appropriate signatures. The approved MOON form in both English and Spanish, as well as related instructions, can be found here. The MOON appears to be unchanged from the version proposed to OMB by CMS in August of this year. Our prior article on this topic can be viewed here.

Utilizing the MOON

CMS implemented the NOTICE Act by revising the Medicare Conditions of Participation to require hospitals and CAHs to provide the standardized MOON to patients entitled to Medicare benefits if the patient receives more than 24 hours of outpatient observation services. The MOON must be provided no later than 36 hours after observation services are initiated or sooner if the individual is transferred, discharged or admitted as an inpatient and must be accompanied by a verbal explanation of its contents. The MOON must be signed by: (i) the patient; (ii) the patient’s representative; or (iii) if the patient/patient representative refuses to sign, the staff member who presented the MOON along with additional required information regarding the signature refusal. A copy of the signed MOON must be retained by the hospital or CAH, but it may be kept electronically.

In addition to indicating the patient’s name and patient identification number on the form and obtaining the requisite signatures, the MOON also contains two free-text fields that hospitals and CAHs will need to complete. The first requires the hospital or CAH to indicate why the patient is in an outpatient stay rather than an inpatient stay. CMS has indicated that a single, pre-printed generic explanation will not be appropriate. Rather, the hospital will be required to state the specific reason a particular beneficiary is an outpatient rather than inpatient. CMS may consider proposing checkboxes with common reasons for the patient’s outpatient status or suggested narratives for insertion in this section at a later date.

Second, CMS has noted that the “Additional Information” section should be used to provide information including, but not limited to, Accountable Care Organization information, notation that a beneficiary refused to sign the notice, hospital waivers of the beneficiary’s responsibility for the cost of self-administered drugs, Part A cost-sharing responsibilities if the beneficiary is subsequently admitted as an inpatient, physician name, specific information for contacting hospital staff or additional information that may be required under applicable state law. Hospitals and CAHs should also use this section to include a hospital employee signature in the event of patient refusal to sign, which must include the staff member’s title, a certification that the MOON was presented and the date and time of presentation of the MOON to the patient. Hospitals may attach additional pages to the MOON if more space is needed for this section.

CMS has not prescribed what level of staff member must deliver the MOON to a patient and is leaving such determination to the individual hospitals and CAHs. However, the staff member must be able to explain the contents of the MOON and assist in answering the patient’s questions in compliance with the verbal notification requirements of the NOTICE Act.

CMS has indicated that manual instructions containing further guidance on completion and issuance of the MOON will be made available in the coming weeks.

Practical Takeaways

Hospitals and CAHs that have not already done so should consider updating policies and procedures to address the NOTICE Act’s requirements and plan educational opportunities for personnel delivering the MOON to explain its contents and the process for obtaining the requisite signature(s).