Knowledge Base Article

Fall and spring are my favorite seasons. Summer is not so bad either. It’s the transition from winter to spring that can be a challenge. The December holidays are over. Most New Year’s Resolutions have gotten lost in the busy day to day of living. Here in the south the weather can be crazy with an ice storm one weekend, spring like weather the next week and then back into the deep freeze of winter.

The transition from a law consisting of less than four hundred words to implementation of the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act is proving to be a difficult transition too.

NOTICE Act to MOON Implementation Timeline

• August 6, 2015: NOTICE Act signed into law
• August 6, 2016: Effective date for compliance with the law
• August 22, 2016: With the release of the 2017 IPPS Final Rule, implementation was delayed due to the Medicare Outpatient Observation Notice (MOON) being open to public comment and having to go through the Paperwork Reduction Act (PRA).
• December 8, 2016: Final MOON posted to the CMS Beneficiary Notices Initiatives (BNI) webpage with a note that Manual Instructions were to be made available in the coming weeks.
• January 11, 2017: CMS Open Door Forum (ODF). A caller asked for clarification on what they would expect to see on the MOON as the reason the beneficiary is not an inpatient. CMS did not provide an answer and instead instructed hospitals to look for the Manual Instructions to be released in the coming weeks.
• January 20, 2017: Transmittal 3695: Subject: MOON Instructions issued.
• March 8, 2017: Hospitals and Critical Access Hospitals (CAHs) are required to begin providing the MOON no later than this date.

This article highlights the detailed instructions that were issued in Transmittal 3695 that updates the Medicare Claims Processing Manual, Chapter 30 – Financial Liability Protections, section 400 – Part A Medicare Outpatient Observation Notice.

400.2- Scope

Who should receive the MOON? The MOON is to be given to beneficiaries who have been receiving observation services for more than 24 hours. It must be provided no later than 36 hours after the observation services began. The distinction on determining who receives the MOON is if the beneficiary is entitled to Medicare benefits, not if Medicare makes a payment. Specifically, 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).”

Timing of Delivery of the MOON: CMS is allowing delivery of the MOON prior to 24 hrs to “afford hospitals and CAHs the flexibility to deliver the MOON consistent with any applicable State law that requires notice to outpatient receiving observation services within 24 hours after observation services begins.”

400.3 – Medicare Outpatient Observation Notice

The MOON is subject to the PRA process and approval by the OMB. The MOON has accompanying instructions that can be found along with the MOON on the CMS BNI web page. Manual instructions advise the following:

• The MOON may only be modified by its accompanying instructions and guidance in the Medicare Claims Processing Manual, Chapter 30.
• Unapproved modifications cannot be made to the OMB-approved, standardized MOON.

400.3.1 – Alterations to the MOON

• The MOON is two pages in length and must remain so unless additional information or state-specific information results in additional page(s).
• The MOON can be two sides of one page or one side of separate pages. However, it “must not be condensed to one page.”
• Hospitals are allowed to include their hospital logo and contact information at the top of the MOON. However, the text on page 1 of the MOON “may not be shifted from page 1 to page 2 to accommodate large logos, address headers, or any other information.”

400.3.2 – Completing the MOON

“Hospitals must use the OMB-approved MOON (CMS-10611). Hospitals must type or write the following information in the corresponding blanks of the MOON:

• Patient name;
• Patient number; and
• Reason patient is an outpatient.”

MOON Pain Point: Why is Your Patient Not an Inpatient?

Earlier I indicated that during the January 11, 2017 CMS ODF a caller asked for clarification of what CMS would expect to see as the reason a patient is an outpatient and not an inpatient. Unfortunately, above I have included this entire section of the manual instructions, leaving hospitals with an unanswered question and a March 8, 2017 compliance date.

For those reading this that are still developing your internal processes for this new requirement, here are a few resources for consideration as to what CMS has said about why a physician would order observation services.

• “By definition…the reason for ordering observation services will always be the result of a physician’s decision that the individual does not currently require inpatient services and observation services are needed for the physician to make a decision regarding whether the individual needs further treatment as a hospital inpatient or if the individual is able to be discharged from the hospital.” (Medicare Benefits Policy Manual (Pub. 100-02), Chapter 6, Section 20.6)
• CMS indicated in the 2017 IPPS Final Rule that they “may consider, in the future, the other suggestions commenters made to improve the MOON, such as checkboxes with common reasons for the patient’s outpatient status or suggested narratives for insertion in this section.”
• In the official U.S. government Medicare handbook, Medicare and You 2017, CMS tells the beneficiary that “staying overnight in a hospital doesn’t always mean you’re an inpatient. You only become an inpatient when a hospital formally admits you as an inpatient, after a doctor orders it. You’re still an outpatient if you haven’t been formally admitted as an inpatient, even if you’re getting emergency department services, observation services, outpatient surgery, lab tests, or X-rays.”
• CMS Product No. 11435, Are You a Hospital Inpatient or Outpatient? content is like an unabridged version of the MOON and reinforces the fact that observation services are provided to help the doctor decide if a patient needs to be admitted or can be discharged.

So, why is your patient not an inpatient? There are basically two reasons. Either your doctor expects you will need hospital care less than two midnights or because you’re Medicare Advantage Plan has advised that the stay should be observation. What you put on the MOON will be a decision to be made as part of the implementation process plan at your hospital.

400.3.3 – Hospital Delivery of the MOON

Hospitals are to deliver a written MOON, as well as provide oral notification.

Oral Notification must:

• Consist of an explanation of the standardized written MOON.
• The format for oral notification is at the discretion of the hospital or CAH.
• The format may include, but is not limited to, a video format.
• No matter the format, a staff member must always be available to answer questions related to the MOON in its written and oral delivery formats.

Signature Requirement

The beneficiary or his/her representative must sign and date the MOON “to demonstrate that the beneficiary or representative received the notification and understands its contents. Use of assistive devices may be used to obtain a signature.”

Delivery of the MOON

• A hospital can issue the MOON in electronic format for signing. However, the beneficiary must be given the option of requesting a paper copy to sign if they prefer.
• Regardless of digital or paper form and signature, “the beneficiary must be given a paper copy of the MOON.

400.3.4 – Required Delivery Timeframes

• The MOON must be delivered when the beneficiary has received observation services as an outpatient for more than 24 hours.
• The MOON must be delivered no later than 36 hours after observation services began.
• If a beneficiary is transferred, discharged, or admitted the MOON must be delivered before 36 hours.
• The MOON may be delivered before receiving 24 hours of observation services.

Observation Start Time

For purposes of delivering the MOON, the start time “is the clock time observation services are initiated (furnished to the patient)…in accordance with a physician’s order.

Elapsed Time

Again, for purposes of delivering the MOON, time is to be measured as elapsed time beginning at the time in the record when services began in accordance with the order for observation rather than billable observation time.

400.3.5. – Refusal to Sign the MOON

When a beneficiary refuses to sign the MOON and there is no representative to sign on behalf of the beneficiary the following guidance is to be followed:

• The MOON must be signed by the staff member presenting the written notification.
• The signature must include their name, title, and a certification that the notification was presented, and the date and time it was presented.
• The staff member would annotate the “Additional Information” section of the MOON to include their signature and certification of the delivery.
• The date and time of refusal is considered the date of notice receipt.

400.3.6 – MOON Delivery to Representative

• The MOON may be delivered to a beneficiary’s appointed representative or authorized representative.
• If the MOON is delivered to a “representative who has not been named in a legally binding document, the hospital or CAH annotates the MOON with the name of the staff person initiating the contact, the name of the person contacted, and the date, time and method (in person or telephone) of the contact.”

Exception: Delivery to a representative not physically present to receive delivery of the notice.

If this exception occurs the hospital must:

• Complete the MOON as required and telephone the representative,
• Information provided telephonically includes all contents of the MOON,
• The date and time the hospital communicates or makes a good faith attempt to communicate the information is considered the receipt date of the MOON,
• The hospital would need to annotate the “Additional Information” section to reflect that all of the indicated information was communicated, and
• The hospital would need to annotate the “Additional Information” section with the name of the staff person initiating the contact, the name of the representative contacted by phone, the date and time of the telephone contact and the telephone number called.

Specific guidance on mailing a copy to the representative is in the manual instructions. The important thing to note is that CMS indicates that “the burden is on the hospital or CAH to demonstrate that timely contact was attempted with the representative and that the notice was delivered.”

400.3.7 – Ensuring Beneficiary Comprehension

The standardized MOON is available in English and Spanish. If the beneficiary is unable to read and/or comprehend the required oral explanation, “hospitals and CAHs must employ their usual procedures to ensure notice comprehension.” Usual procedures may include:

• Translators,
• Interpreters, and
• Assistive technologies.

400.3.8 – Completing the Additional Information Field of the MOON

CMS instructs that this section may be populated with any additional information a hospital wishes to convey to a beneficiary. CMS specific examples of what may be put in this section include:

• Contact information for specific hospital departments or staff members.
• Additional content required under applicable State law related to notice of observation services.
• Part A cost-sharing responsibilities if a beneficiary is admitted as an inpatient before 36 hours following initiation of observation services.
• The date and time of the inpatient admission if a patient is admitted as an inpatient prior to delivery of the MOON.
• Medicare Accountable Care Organization information.
• Hospital waivers of the beneficiary’s responsibility for the cost of self-administered drugs.
• Any other information pertaining to the unique circumstances regarding the particular beneficiary.

CMS will allow hospitals to attach additional pages to the MOON when more room is needed.

400.3.9 – Notice Retention of the MOON

• The hospital or CAH must retain the original signed MOON in the beneficiary’s medical record.
• Electronic notice retention is permitted.
• The beneficiary is to receive a paper copy of the MOON that includes all of the required information.

400.4 – Intersection with State Observation Notices

“States that have State-specific observation notice requirements may add State-required information to the “Additional Information” field, attach an additional page, or attach the notice required under State law to the MOON.”

MMP, Inc. strongly encourages hospitals to closely review the MOON form instructions found on the BNI webpage as well as the Manual instructions to ensure compliance with the NOTICE Act.