CMS has set March 8 as the date on which hospitals are required to give patients receiving observation services the Medicare Outpatient Observation Notice (MOON).

The Notice of Observation Treatment and Implication for Care Eligibility Act, passed by Congress on Aug. 8, 2015, requires hospitals and critical access hospitals to provide written and oral notification to patients receiving observation services for more than 24 hours. Hospitals must deliver the notice no later than 36 hours after observation services begin, or sooner if the patient is transferred, discharged, or admitted as an inpatient.

CMS also requires hospitals to use a standardized notice and to fill in the specific reason the patient is an outpatient and not an inpatient. The standardized form explains the implications of receiving outpatient services, including the potential out-of-pocket costs and how an observation stay affects the eligibility requirements for Medicare to cover a skilled nursing facility stay. The person delivering the MOON must explain the notice and its content, document that an oral explanation was provided, and answer any questions.

Patients or their representatives must date and sign the notice to indicate they received and understand it.

An important issue for hospital leadership is determining who will be responsible for delivering the MOON to patients and explaining what it means, points out Steven Greenspan, JD, LLM, vice president of regulatory affairs for Executive Health Resources, a Newtown Square, PA, healthcare consulting firm.

Hospital staff also need to determine how they will fill out the blank space that tells patients why they are not appropriate for an inpatient admission.

“The instruction sheet that accompanies the MOON requires a hospital to explain in writing and orally the specific reason the patient is an outpatient, rather than being admitted as an inpatient. CMS failed to clarify further whether this needs to be a clinical reason, a technical reason, or both,” Greenspan says.

In other news from Washington, the 21st Century Cures Act passed by Congress and signed by the president in December contains a provision that requires CMS to take patient socioeconomic status into account when calculating a hospital’s performance in the Medicare Hospital Readmission Reduction Act. The Cures Act instructs CMS to adjust readmission penalties based on the percentage of patients the hospital treats who are dually eligible for Medicare and Medicaid.

A downloadable copy of the MOON notice in English and Spanish and instructions for delivering can be found at: