CMS finalizes MOON form for observation patients

CMS recently finalized the long-awaited Medicare Outpatient Observation Notice (MOON), which is now set to become effective no later than March 8, 2017.

Hospitals must use the MOON form to comply with the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act. The requirement imposed by NOTICE was set to go into effect August 6 but was delayed in the August 2 release of the 2017 inpatient prospective payment system (IPPS) final rule until the MOON form could be revised in response to comments.

The NOTICE Act created a great deal of confusion for acute care and critical access hospitals when it was released in August 2015. It gave hospitals one year to develop a system for providing a verbal and written notice of outpatient status to any patient in observation who has been in the hospital for more than 24 hours, stipulating that hospitals must inform patients of their status within 36 hours from the start of the service. Questions arose about what CMS would consider an appropriate written notice, who should deliver such a notice, and whether the notice could be given to observation patients prior to the 24-hour mark.

The release of the 2017 IPPS proposed rule presented hospitals with the proposed method of delivering a written observation notice and the other MOON requirements. However, CMS listened to comments from hospitals and revised the proposed MOON form. This resulted in hospitals remaining in limbo because the MOON could not be finalized until after the release of the revised MOON form, a subsequent 30-day comment period, and the final Paperwork Reduction Act approval.

“In anticipation of the finalized MOON form, some hospitals have likely begun the steps to implement the requirements,” says Valerie A. Rinkle, MPA, a lead regulatory specialist for HCPro, a division of BLR, in Middleton, Massachusetts. “This is especially true for hospitals in states that already are required to give notices to observation patients under their state law. The hospitals that are already giving notice will need to ensure they download and use the finalized MOON form and check the finalized instructions for the form against their current process.”

Hospitals that have not been giving notice to observation patients will also need to download the finalized MOON and instructions and begin developing a process. According to Rinkle, this will entail a team to evaluate the following questions:

• What staff have the best competencies to deliver the notice and have the conversations with patients to answer their questions confidently and build a relationship of trust with the patient and the hospital?
• Will a notice be given upon the order for observation or closer to the 24-hour requirement?
• Will staff be monitoring outpatients receiving observation services to collaborate with physicians to obtain an inpatient order prior to 24 hours because the patient needs medically necessary hospital care for a second night and avoid having to administer the MOON, and instead, be able to administer the Important Medicare Message (IMM) required for inpatients?
• Has or will the hospital decide to follow the voluntary Office of Inspector General (OIG) guidance to write off noncovered self-administered drugs so that this can be explained to patients? Note that the OIG published guidance last year that reversed prior guidance and allows hospitals to avoid having to bill and collect these noncovered charges from Medicare outpatients as long as they follow the OIG requirements.

Hospitals should develop a script or guidelines for the verbal explanation of the MOON notice so information is explained consistently, including the reason the patient is an outpatient rather than an inpatient, Rinkle says. “This is one key reason that clinical staff may have better skills to explain the notice than non-clinical staff,” she adds.

Rinkle recommends bringing the following people together when developing a hospital’s process for complying with the final MOON and instructions: 

• Compliance
• Nursing
• Case management and/or utilization review nurses
• Physician advisors
• Emergency department case management/manager
• Patient access or revenue cycle

The process a hospital follows for delivery of the IMM may serve as a model for MOON, although hospitals must evaluate whether the staff who currently deliver the IMM are appropriate to explain the MOON.

“Hospitals are incentivized to improve their patient experience scores and a new outpatient patient experience survey will be required in 2018 for the Hospital Outpatient Quality Reporting Program, so it is important to consider how giving the notice may impact patient experience,” Rinkle says. “So like the scene in the holiday classic movie “It’s a Wonderful Life,” this 2017 holiday season will be time for hospitals to all lasso the MOON!”

English and Spanish versions of the finalized MOON, along with instructions for completing the form, are available for download on CMS’ Beneficiary Notices Initiative website.