MOON Requirement Delayed in IPPS Final Rule

Hospitals got a last-minute reprieve from the Medicare Outpatient Observation Notice (MOON) notification requirement, which was set to go into effect August 6. Citing the need for additional time to revise the standardized notification form that hospitals will need to use to notify patients about the financial implications of being assigned to observation services, CMS moved back the start date for the requirement in the 2017 IPPS final rule to “no later than 90 days,” after the final version of the form is approved.

CMS released the new draft of the form August 1 and plans to accept public comments for 30 days. The MOON notification form is intended to be used to help hospitals comply with the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act. The act requires hospitals to provide 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 within 36 hours from the start of the service, or at the time of discharge, about their status. However, without a final version of the form ready for use, it would appear that hospitals cannot comply with the NOTICE Act at this time.

“Hospitals should review the IPPS final rule that contains significant clarification on things like when and how the notice is delivered and finalize their own policies for delivering the notice pending the final version of the MOON being available,” says Kimberly Anderwood Hoy Baker, JD, CPC, director of Medicare and compliance for HCPro in Middleton, Massachusetts.

CMS stated in the 2017 IPPS final rule:

We expect the final [Paperwork Reduction Act] PRA approval of the MOON around the time the implementing regulations are effective. Therefore, the implementation period for hospitals and CAHs will begin sometime after the effective date of this final rule and will be announced on the CMS Beneficiary Notices Initiative Website at: https://www.cms.gov/Medicare/Medicare-General-information/Bni/index.html and in an HPMS memorandum to MA plans. During this implementation period, hospitals and CAHs will have time to prepare for implementation, consistent with past implementation practices for beneficiary notices. Hospitals and CAHs will be required to deliver the MOON to applicable patients who begin receiving observation services as outpatients on or after the notice implementation date.

Hospitals will likely not be required to provide the MOON notification form to patients until 90 days after PRA approval, which could mean compliance with the MOON and NOTICE Act is at least 120 days out from the final rule release date given that there is also a 30-day comment period on the revised form.

“Hospitals should watch the Beneficiary Notice Initiative page, where CMS said they would announce implementation information, for more information on the finalization of the MOON and implementation timeframes,” says Baker.