Knowledge Base Article

With the release of the 2017 IPPS Final Rule last week, we are one step closer to the MOON. The Medicare Outpatient Observation Notice (MOON) is a requirement of the August 6, 2015 Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act). Guidance for provision of the MOON to Medicare beneficiaries was in the 2017 IPPS Proposed Rule. This week we will walk through the 2017 IPPS Final Rule, which is not the final step to the MOON.

When to Begin Providing the MOON?

The NOTICE Act provided the effective date for this notification to begin 12 months after enactment of the Act on August 6, 2015.

However, in the Final Rule, CMS indicates the standardized notice, the MOON, is going through the Paperwork Reduction Act (PRA) approval process and is subject to a 30-day public comment period that begins on the date of publication of Final Rule. “Following review of comments and final approval of the MOON under the PRA process, hospitals and CAHs must fully implement use of the MOON no later than 90 calendar days from the date of PRA approval of the MOON.” So, when will you be required to provide the Moon?

• Public Comment Period: August 22nd through September 21st

The Final Rule is scheduled for publication in the Federal Register on August 22nd. The public will have 30 days after that to “comment” on the form which puts us at September 21st.

• PRA Process: At a minimum November 20th

An FAQ regarding how long the PRA clearance process takes indicates that “the complete review and approval process can take anywhere from 6-9 months, depending on the number of requests currently in the process and the data collection of the subject matter. This estimate includes the 60-day and 30-day public comment periods and the 60 days OMB has to review and act upon each submission.

• PRA approval to Full Implementation of the MOON: Date TBD

CMS notes the implementation date will be announced on the CMS Beneficiary Notices Initiative Web site at: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html and in an HPMS memorandum to MA plans.

Further, “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.”

Who should receive the MOON?

Insurance Coverage

Individuals entitled to benefits under Title XVIII of the Act, whether or not the services furnished are payable under the title should receive the MOON when he/she receives observation services as an outpatient for more than 24 hours. This would include the following:

• The individual enrolled in Medicare Part A and Part B,
• The individual enrolled in Medicare Part A only “would still receive notice even though the observation services received as an outpatient fall under the Part B benefit and would not be covered or payable by Medicare for that person,”
• Individuals enrolled in a Medicare Advantage (MA) or other Medicare health plan, and
• Individuals where Medicare or MA is the secondary payer. CMS notes “the applicability of the notice requirement depends on whether the individual is entitled to benefits under Title XVIII, not on whether Medicare makes payment (primary or otherwise).”

States with a similar Notice Requirement

“The NOTICE Act specifically requires hospitals and CAHs to deliver notice (written and oral)…to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours. The MOON satisfies the written NOTICE Act requirement for a designated population of Medicare beneficiaries receiving a specific set of services.”

Comments were submitted noting that several states are already required to provide a notice similar to the MOON and it would be beneficial to allow for delivery of the MOON to a broader population (i.e. all Outpatients) to avoid confusion. CMS, reiterated that the NOTICE Act specifically requires provision of the MOON to outpatients receiving observation services and provided the following guidance:

• On a state-by-state basis Hospitals and CAHs will need to determine if delivery of the MOON fulfills individual state requirements.
• When State law, “requires notification to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours and requires such notice to contain content that is not included in the MOON, hospitals may utilize the free text field in the MOON’s “Additional Information” section for communicating such additional content.”
• “Hospitals and CAHs subject to State law notice requirements may also attach an additional page to the MOON to supplement the “Additional Information” section in order to communicate additional content required under State law, or may attach the notice required under State law to the MOON.”

Timing of Delivery of the MOON

Before 24 Hours of Observation

A commenter noted that while the NOTICE Act requires delivery of the MOON to individuals receiving more than 24 hours of observation services as an outpatient, there are State specific laws that require written notice within 24 hours of initiation of services.

CMS clarified “that hospitals and CAHs may deliver the MOON before an individual has received more than 24 hours of observation services as an outpatient.”

After 24 Hours of Observation

Even with this clarification CMS went on to indicate “that we do not encourage hospitals and CAHs to deliver the MOON at the initiation of outpatient observation services. Routine and systematic delivery of the MOON by a hospital or CAH at the initiation of observation services would, in effect, render the MOON a notice of receiving outpatient observation services, as all patients receiving observation services would be given the MOON independent of the length of time they received observation services.”

When does the 24 hour timeframe begin?

Several commenters requested clarification as to whether the timeframe starts:

1. After services begin following the written order for observation services;
2. When related services commence if such services commence before the written order was executed and the patient occupies an outpatient bed count; or
3. Based on the documentation of when nursing care began.

CMS indicated “there may be times when an individual is subject to an order for observation services, but is not actually receiving observation services. For example, following an order for observation services in an emergency department, a hospital may need to wait to begin furnishing observation services until a bed is available for the patient. In this situation, services are considered initiated when observation services commence.”

They went on to clarify “that the start of observation services, for the purposes of determining when more than 24 hours of observation services have been received, is the clock time as documented in the patient’s medical record at which observation services are initiated (furnished to the patient) in accordance with a physician’s order.”

What if a Resident writes the order?

Several commenters also requested clarification when the order for observation services was written by a resident. CMS responded that “to the extent that a resident is authorized by State licensure law and hospital staff bylaws to order outpatient services, once observation services are initiated in accordance with the resident’s order, the 24 hour time period will commence.”

Billable or Elapsed Time to Count the Hours?

A commenter noted that the counting of hours could be interpreted as elapsed time or billable time. CMS believes using elapsed time is most consistent with language in the NOTICE Act. “Therefore, for purposes of identifying the 24-hour timeframe for which an individual has received observation services, and thus is required by the NOTICE Act to receive notice by the hospital or CAH, observation time will be measured as the elapsed time in hours beginning at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

How will the MOON work with the 2-Midnight Policy?

“The NOTICE Act requires hospitals to inform patients who have remained outpatients of the hospital and received observation services for more than 24 hours that they are not hospital inpatients and are subject to potentially different cost-sharing requirements and postacute care benefits than someone who has been admitted as an inpatient. We note that a scenario could arise whereby a patient is admitted to the hospital immediately after being a hospital outpatient receiving observation services for greater than 24 hours. In such a scenario, the inpatient admission may be payable under Medicare Part A under the 2-midnight policy and, as stated earlier, the hospital or CAH would still be required to furnish the MOON to the patient within 36 hours after the time the individual begins receiving observation services.”

What if the Inpatient Admission occurs prior to delivery of the MOON?

As recommended by a commenter, CMS agrees that when “an inpatient admission occurs prior to delivery of the MOON, the MOON should be annotated with date and time of the inpatient admission. Therefore, we are requiring that, in the event that a patient is subsequently admitted as a hospital inpatient directly after receiving observation services for more than 24 hours, and the inpatient admission occurs prior to delivery of the MOON, the MOON be annotated with the date and time of the inpatient admission. Additional guidance regarding elements for the free text field of the MOON will be provided in the CMS Internet Only Manual.”

Written Notice Requirements

A standard notice (the MOON) is to be used by all hospitals and CAHs. Several comments were submitted regarding the form content and format. Changes made in response to comments include:

• A reduced number of fillable fields on the MOON, specific examples provided by CMS include:
• The physician name and the date and time observation services began are no longer on the notice,
• The field for the hospital name was removed. CMS indicated that consistent with current beneficiary notices, and as will be detailed in future guidance, hospitals will be permitted to preprint the MOON to include their hospital name and logo at the top of the notice.
• One commenter suggested making the MOON a single page. CMS noted this would require the font to be too small but did note that hospitals may print the MOON as two sides of a single page.
• The CMS’s Office of Communications performed a plain language review and appropriate changes were incorporated wherever possible.
• In response to suggestions to keep the focus of the MOON on status and related coverage and cost-sharing implications, the QIO contact section was removed from the MOON.

What “Additional Information” is expected to be included in this section of the MOON?

CMS generally does not specify expected language for additional information of beneficiary notices. However, they believe this section may be used for the following:

• A place to include information such as unique circumstances regarding the particular patient,
• A place to note when a beneficiary refuses to sign the MOON,
• A place to note 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, or specific information for contacting hospital staff.

Required Retention of the MOON in the Medical Record

Several commenters requested clarification on how the document must be maintained. CMS indicated that “consistent with longstanding practice in implementing beneficiary notices, we will require that hospitals and CAHs retain a signed copy of the MOON. Such a practice assures both hospitals and CAHs and surveyors that the appropriate notices have been delivered as required. However, in the past, we have permitted providers to determine the method of storage. This same flexibility will be afforded to hospitals and CAHs delivering the MOON. Hospitals and CAHs may choose to retain a signed notice as a hard copy or electronically.”

Delivering the MOON

CMS proposed the use of the MOON to include all of the information elements required by section 1866(a)(1)(Y)(ii) of the Act to fulfill the written notice requirement of the NOTICE Act. An English language version of this notice has been submitted to the OMB for approval. Once the English language version is approved a Spanish language version will be made available.

CMS notes that if an individual cannot read the MOON or comprehend the required oral explanation, they expect hospitals and CAHs to employ their usual procedures to ensure notice comprehension and refers you to the Medicare Claims Processing Manual (Pub. 100-4), Chapter 30, Section 40.3.4.3, for similar existing procedures related to comprehension of the Advance Beneficiary Notice of Noncoverage (ABN). CMS finalized the proposed provisions for delivering the MOON without modification.

Oral Notice

Several commenters questioned how they should handle and document the oral explanation required by the NOTICE Act. Interestingly, one commenter recommended that CMS allow the oral explanation to be delivered as a video presentation with staff being present to answer any questions and provide additional explanation when needed. The following are CMS responses to comments and questions:

• The statute requires an oral explanation of the written notification, or MOON.
• A video presentation is acceptable if there is someone available to answer questions.
• The NOTICE Act requires delivery of a written and oral explanation of the MOON when notice delivery is required.

Signature Requirements

The NOTICE Act sets forth that the written notice must be:

• Signed by the individual receiving observation services as an outpatient, or
• Signed by a person acting on the individual’s behalf to acknowledge receipt of the notice, or
• If the individual or person refused to provide a signature, “the written notification is to be signed by the staff member of the hospital or CAH who presented the written notification and certain information needs to be included with such signature.” The “certain information” to be included is the staff member’s name and title, a certification statement that the notice was presented, and the date and time the notice was presented.

CMS finalized the proposed signature requirements without modification.

No Appeal Rights under the NOTICE Act

In the proposed rule CMS stated the NOTICE Act “does not afford appeal rights to beneficiaries…to provide clarity to this point, we are proposing to amend the regulations at 42 CFR 405.926 relating to actions that are not initial determinations, by adding new paragraph (u) to explain that issuance of the MOON by a hospital or CAH does not constitute an initial determination and therefore does not trigger appeal rights under 42 CFR part 405, subpart I.” After consideration of public comments the proposed revision to §405.926(u) was finalized without modification.

When will you be required to provide the MOON? Not for a while. In the meantime, the current draft document looks different from the first iteration. I would encourage key stakeholders to closely review this document, submit comments to the Office of Information and Regulatory Affairs, Office of Management and Budget and begin to work through the process of providing the MOON.

Resources:

Link to pre-published 2017 IPPS Final Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-18476.pdf

Link to Details for CMS Form Number CMS-10611: Medicare Outpatient Observation Notice: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html?DLPage=2&DLEntries=10&DLSort=1&DLSortDir=descending

• Note: Instructions for submitting public comments are not in the final rule document. Until a correction notice can be published in the Federal Register, instructions are available at this website.