2017 MOON update: Take this seriously

February 17th, 2017 / By Barbara Aubry, RN

Last year I wrote a blog about the new Medicare Outpatient Observation Notice or MOON, the latest in the CMS library of Beneficiary Notices. A lot of folks thought no big deal—this only impacts case managers and since I work in HIM or CDI, I really don’t need to be concerned with this.

I am here to dissuade you of that thought. Recently, I attended a meeting of compliance officers and at the top of their discussion list is the new MOON, aka CMS-10611. Hospitals are struggling with who will deliver the notice, how, when, what can be changed and all the other usual operational issues that come with a new layer of regulation. One person at the meeting said, “Well, at least this doesn’t impact billing,” and of course, I had to respectfully disagree.

Let’s review what we know of Beneficiary Notices—the notice given to outpatients prior to providing a service that is not covered for their diagnosis. As you recall, the ABN must be signed by the patient or representative prior to provision of the non-covered service, kept in the medical record and when the service is billed, specific modifiers need to be appended to the claim to indicate the notice was provided and the outcome. Provision of the ABN impacts clinical, coding and billing—same with the MOON.

Recently, CMS updated information regarding the MOON since the industry seems to be struggling with its implementation. Transmittal 3695, “Change Request 9935 making changes to the Medicare Claims Processing Manual, Chapter 30” was released January 20, 2017. Click here to view the PDF in its entirety.

Provision of a MOON

Basically, the MOON informs all Medicare beneficiaries of their status when they are an outpatient receiving observation services. This is important since it is sometimes difficult for a patient to know they are not considered an inpatient of the hospital or critical access hospital (CAH). The MOON must be delivered to the patient or their representative when observation services span 24 hours or are expected to span 24 or more hours. Specifically, per CMS: “The NOTICE Act requires hospitals and CAHs to provide written and oral explanation of such written notification to individuals who receive observation services as outpatients for more than 24 hours.”

CMS allows the hospital or CAH a bit of leeway: the MOON must be provided no later than 36 hours after outpatient observation services begin, but may be provided earlier. Beneficiaries impacted include:

  • Beneficiaries who do not have Part B coverage (as noted on the MOON, observation stays are covered under Medicare Part B)
  • Beneficiaries who are subsequently admitted as an inpatient prior to the required delivery of the MOON
  • Beneficiaries for whom Medicare is either the primary or secondary payer

The MOON does not need to be delivered to every Medicare beneficiary who receives outpatient services, only those receiving at least 24 hours of observation services. Per CMS, the observation clock calculation begins when “the clock time observation services are initiated (furnished to the patient), as documented in the patient’s medical record, in accordance with a physician’s order. This follows the elapsed clock time, rather than the billed time associated with observation services.”

Scope and Risk

A MOON needs to be delivered to the patient or their representative within the prescribed time frame noted above. It is expected that the patient will sign the MOON, and then a copy must be retained in the medical record and a printed copy given to the patient. CMS also requires an oral explanation, in addition to a written one, explaining why observation services were ordered.

From a risk management perspective, I recommend caution here. Compliance officers need to speak with hospital counsel and the chief of the medical staff if necessary to determine the type of oral/written explanation to be provided regarding the order for observation services. Specifically, CMS instructs “the MOON is intended to inform beneficiaries who receive observation services for more than 24 hours that they are outpatients receiving observation and not impatient, and the reasons for such status, and must be delivered no later than 36 hours after observation services begin.” Remember, all entries in a medical record are examined when there is a complaint against a provider.

In regulatory matters, I am a worst-case-scenario thinker because, as life proves, worst case scenarios play out all the time. Be sure to consider the reason for the observation order from the patient’s perspective as well as their family. They are in the hospital and usually not happy about it; they are stressed, frightened and sick. They have just been informed that even though it feels like they are an inpatient (gown, IV, bed, medications, room, food, nurses, doctors, tests, etc), they actually are not and their insurance coverage is different. And the collective “you” of the hospital are preventing them from becoming inpatients for some clinical reason they do not fully understand. You get the picture.

The regulations go on to explain what can and cannot be edited in the notice format, delivery instructions, signature requirements, what must be done if the patient refuses to sign, etc.

Educate Staff

Without the MOON, observation services are dicey. Rife with regulation, it has become even more challenging since the patient is fully educated on how their status will impact their coverage. Staff will need thorough education—case managers, social workers, physicians, nurse practitioners, utilization review, CDI, anyone working in the ED or observation area of the facility, and HIM. Delivering the notice in a timely manner is key but even more critical is the content of the notice. Be sure it is adequately explained to the patient why they are in observation rather than admitted. I suggest discussing planned intervention and an expected time line so the patient and family can anticipate when their status may change and how they will be impacted.

ED administrative staff must be aware of the requirement so they can monitor cases that are under the hour countdown. They can reach out to case management for those who need to be reviewed to ensure delivery of a MOON ASAP.

Physicians must be educated on the MOON even though they likely will not be receptive to more regulatory requirements. The CDI team can help here by providing input on how the provider can document so that data can be taken directly from the medical record and applied to the MOON. In my experience, physicians do not like to document the thought process that helps them arrive at a decision, but it may be necessary so that the MOON supports the “reason for observation status.”

HIM needs to be educated to look for the notice in the medical record and double check that it was provided on time before coding and billing the claim. A process needs to be created to manage those cases missing the required beneficiary notice.

An Important Unanswered Question

CMS has provided fairly clear instructions regarding the MOON, but I cannot find an answer to “what do we do if we have an observation case that qualified for a MOON but none was delivered? Can we bill this case? Or, like the ABN rules, if the notice was not provided on time, is the patient not responsible for the charges since the hospital/provider “knew or should have known that the service was not covered?”

The implementation date for CR 9935 is fast approaching—February 21, 2017. Perhaps CMS has not determined how claims will be impacted when providers do not comply with the MOON requirements? One thing I am certain of: Auditors will be looking for MOON notices for all observation case reviews. Comply or beware. I will update this blog as CMS releases more information regarding how non-compliant cases are to be treated.

Good luck with this.

Barbara Aubry is a regulatory analyst for 3M Health Information Systems.