Industry Insights

Medicare Outpatient Observation Notice (MOON) Instructions

March 2017
Author:  Jen Goins

Jen Goins

Managing Consultant

Consulting

312 Walnut Street, Suite 3000
P.O. Box 5367
Cincinnati, OH 45201-5367 (45202)

Cincinnati
513.621.8300

Effective no later than March 8, 2017, hospitals, including critical access hospitals (CAH), must begin delivering the Medicare Outpatient Observation Notice (MOON) to all traditional Medicare and Medicare Advantage plan beneficiaries who receive outpatient observation services for more than 24 hours.

When enacted August 6, 2015, the federal Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) mandated the MOON. Information and instructions regarding MOON have been published in the Medicare Claims Processing Manual Chapter 30 and also are viewable on the Centers for Medicare & Medicaid Services (CMS) beneficiary notice initiative page and CMS-10611

Operational Processes & Required Information for MOON Completion

The NOTICE Act requires the MOON to be provided to a beneficiary or their representative when the beneficiary has been receiving outpatient observation services for more than 24 hours. The MOON must be delivered no later than 36 hours after outpatient observation services begin. Recognizing some state laws regarding notice of outpatient observation are more stringent than those the NOTICE Act requires, CMS allows for delivery of the MOON prior to 24 hours of outpatient observation services.

Not only do hospitals and CAHs need to be able to identify and issue a MOON to beneficiaries with primary traditional Medicare or Medicare Advantage plan coverage, they also must identify and issue the MOON to:

  • Beneficiaries who don’t have coverage under Part B
  • Beneficiaries who were in an outpatient observation status and then admitted as an inpatient prior to delivery of the MOON
  • Beneficiaries with traditional Medicare or a Medicare Advantage plan as secondary insurance

To determine the appropriate point to issue the MOON, the calculation of outpatient observation hours should begin at the time of the physician order for observation documented in the patient’s medical record. The hospital staff member who will deliver the MOON will need to add the patient’s name, unique patient identification number, such as a medical record number, and the reason the patient is in outpatient observation status. 

To help improve beneficiary understanding, hospital staff may provide in the MOON’s additional information section any information they want to communicate to the beneficiary, including, but not limited to:

  • Additional state law information
  • Patient financial responsibility for an outpatient observation encounter
  • Inpatient admission date and time, if applicable
  • Hospital policy regarding waiving costs of self-administered drugs, if applicable

MOON Delivery & Retention

The MOON needs to be issued in both written and oral formats. While CMS is allowing electronic viewing and signature of the MOON, the beneficiary is provided a paper copy of the MOON regardless of the delivery format. The format of the oral notification of the MOON is at the hospital’s discretion and may include video. The hospital must ensure a staff member is available for questions related to written and oral formats. If the beneficiary’s representative is provided the MOON, the hospital is to provide the representative a paper copy, either in person or through certified mail if the representative isn’t at the hospital.

Refusal to sign the MOON by the beneficiary or representative must be documented in the form’s additional information section and be signed and dated by the staff member providing the information.

Retention of the signed MOON should be maintained in the patient’s medical record in paper or electronic format.

Compliance with delivering the MOON will require a multidisciplinary team approach to identify, notify and complete the MOON for the hospital’s Medicare patients.

Contact your BKD advisor for questions or assistance regarding the MOON instructions.

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