Case study
MOON requirement delayed in IPPS final rule
Learning objective
At the completion of this educational activity, the learner will be able to:
- Identify details of the delay to the Medicare Outpatient Observation Notice (MOON) notification requirement
Hospitals got a last-minute reprieve from the 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 Inpatient Prospective Payment System (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 planned to accept public comments for 30 days. Some experts said that this could mean a January 1, 2017, start date for the requirement, but that remains to be determined, says Stefani Daniels, RN, MSNA, ACM, CMAC, founder and managing partner of Phoenix Medical Management, Inc., in Pompano Beach, Florida.
A reprieve for struggling hospitals
The decision to push back the notification requirement start date was likely a relief for many hospitals who reported struggling this summer to comply with the notification requirement, formally known as the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, which was signed by President Barack Obama August 6. (See related story on p. 3.) 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.
The goal of the legislation is to ensure patients are aware of their status and what it might mean for them financially?in particular, how it might affect their postacute care options.
Patients often (wrongly) assume that if they’re in a hospital bed, they are an inpatient.
They also don’t understand the implications of outpatient billing status.
One of the biggest issues that can crop up when a patient’s care orders place him or her on observation status is that he or she will not be eligible for Medicare coverage for a postacute stay in a skilled nursing facility (SNF), and instead may need to pay more out of pocket. Medicare currently only covers SNF extended care rehabilitation services for patients who have three consecutive inpatient days in a hospital. For example, one day in observation and two days as inpatient equals three days in the hospital, but does not meet the three-day inpatient day stay requirement because it only includes two inpatient days.
"An Office of Inspector General report found that the average out-of-pocket cost for SNF services not covered by Medicare was more than $ 10,000 per beneficiary," stated a press release issued by the congressional leaders who promoted the bill (http://ow.ly/S6JSB).
To comply with the rule, hospitals will now need to designate someone?in some cases it may be the case manager?to provide this notification.
A changing requirement
The 2017 IPPS final rule shed a few additional details about the notification requirement, including that "hospitals and CAHs may deliver the MOON to individuals receiving observation services as an outpatient before such individuals have received more than 24 hours if "the individual is transferred, discharged, or admitted as an inpatient," says Daniels. The final rule also states that insurers must notify patients of any changes in status initiated by the insurer before he or she has left the hospital.
"Too often, hospital business office reps are informed that a level of care change to observation services is being made by the insurer long after the patient has left the hospital. This could result in the risk of noncompliance with the NOTICE Act," says Daniels.
CMS issued a revised version of the MOON document from the first draft of the document, which was published on the PRA website (http://ow.ly/7TPE302eSiM). (See the new version of the form on pp. 7?8.)
"CMS has made substantive changes to the MOON from the first iteration. The old MOON cannot be used," says Ronald Hirsch, MD, FACP, CHCQM, vice president of the Regulations and Education Group at Accretive Health in Chicago.
The new version of the MOON document requires a narrative outlining why the patient is being placed in outpatient status with observation services. "CMS says that in the future it will consider model language for use in this section. The MOON ‘additional information’ section may be used to add information to meet any state law observation notification requirements that differ from the MOON federal requirements but the MOON may not be used for non-Medicare/Medicare Advantage (MA) patients," says Hirsch.
The final rule also says that the MOON is required for any Medicare/MA patient who receives 24 hours of observation and must be given to the patient within 36 hours. But CMS allows the MOON to be given to any Medicare/MA patient who receives observation services.
"On the other hand, CMS ‘encourages hospitals not to deliver the MOON at the initiation of observation services,’ at which point patients may be overwhelmed and confused," says Hirsch.
When organizations are determining which patient should get the MOON, observation hour counting should begin with the order for observation. The 24-hour period is consecutive and "carved out hours" should not be considered, says Hirsch.
CMS doesn’t dictate which staff members can deliver the MOON, rather leaving that up to the hospital or CAH to decide.
In addition, it states that patients don’t have the right to appeal their placement in outpatient status with observation services, says Hirsch. "CMS removed the QIO quality complaint reference on the MOON to avoid confusion about this," he says.
Organizations should note that the MOON is required for patients in whom Medicare is a second payer and for all patients with MA plans even though the copayments and SNF requirements for those patients may differ from those described on the MOON.
Stay tuned for future updates on this topic as CMS works on the MOON and other details of the requirement.
Getting ready for MOON
Learning objective
At the completion of this educational activity, the learner will be able to:
- Identify challenges related to implementing the Medicare Outpatient Observation Notice (MOON) and the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act.
When CMS decided to postpone the MOON notification requirement a few days before the scheduled implementation date of August 6, it provided a welcome reprieve for many hospital staff members who were scrambling to get ready (see related story on p. 1).
"We were almost ready to go, however, plans are actually now on hold until the final draft is approved, in probably January," says Frantzie Firmin, MS, RN, director, utilization management and care coordination of Brigham & Women’s Hospital in Boston.
The hospital’s preparations included development of a process to deliver the notification to patients who needed it.
"Our organization, Partners Healthcare System, has decided to address the MOON implementation systemwide. As a result, we set up a case management expert panel, which is a collaborative practice committee that meets regularly to address and develop a plan that will ensure regulatory compliance across the system," she says.
The group worked with the electronic medical system team to develop an automated workflow directly within the system. "Each hospital has its own work queue set up," says Firmin. "The Medicare patients in the work queue are only those in observation status that have been there 12 hours or more."
Care coordinators and insurance support nurses have access to the work queue, which allows them to identify their observation patients. "Furthermore, we have also added functionality in [our electronic system] to document that the notice has been given," she says. Staff members are able to check off the status and date of receipt for each patient, and then the patient’s name moves out of the work queue.
The system also allows the insurance support nurse or care coordinator to print the form and provide a copy to the patient before discharge.
Other organizations had taken similar steps.
RWJ Barnabas Health in Toms River, New Jersey, also formed a small task force to ensure compliance with MOON, says Shawna Grossman Kates, MSW, MBA, LSW, CMA, the organization’s case and bed management director. But while MOON is new to them, this type of observation notification requirement is not. New Jersey hospitals have already been subject to an even more restrictive patient notification requirement for several years, she says.
Hospitals in New Jersey must issue a letter to patients detailing their status at the time of placement.
Sometimes that’s difficult to do. It requires different portals because notifications may affect everyone, from the elderly adult coming in through the ER to pediatrics observation patients or labor and delivery observation patients.
"To some degree, the emphasis on MOON has instigated a renewed attention to make sure we’re in compliance with the state of New Jersey’s regulations and that we have continuity and standard practices on a systemwide basis," she says.
Massachusetts General Hospital in Boston has come up with a workflow for how the form will be delivered and a communication plan to deliver it, says Nancy Sullivan, MBA, CMAC, executive director of case management at the organization.
But like other organizations, plans at Massachusetts General Hospital are on hold as CMS prepares the final version of the new MOON form.
Part of the hospital’s initial plan to comply with MOON prior to the postponement was to print a daily report that listed the patients who would need the notice and to use case management resource specialist staff members, who provide support to case managers, to deliver the notification. The hospital worked with staff members to develop a training script.
A challenging requirement
While case management experts agree that notifying patients and giving them information about their status is the right thing to do, there are significant challenges they are trying to work past to make the notification a reality.
For example, CMS’ new proposed form, says Kates, is not written in simple language that is easy for most patients to understand. "The Medicare MOON document is not third-grade reading level language," she says. This means that unless CMS makes changes to the form before finalizing it, there will be an additional burden on staff members delivering the notification to clearly explain it to patients. Many organizations will likely need to come up with simpler materials to augment the form to help patients understand the complex subject matter.
Organizations are not permitted to modify the finalized version of the MOON form. "But many are coming up with a one-page handout or an FAQ, or adapting their state hospital association FAQ on observation documents," says Kates.
While CMS estimates the notification process would take about 15 minutes per patient, says Sullivan, it’s likely to take much more staff time due to the complexity of the material.
"The kinds of topics that they plan to include in the letter are complicated," she says.
The challenging nature of these discussions was reinforced by a recent conversation Sullivan had with an elderly family member whose husband was admitted to the hospital.
The woman had called Sullivan in hopes of having her explain all the hospital jargon and insurance-speak. Trying to explain the billing nuances involved in skilled nursing facilities and Medicare Advantage is no easy task, says Sullivan?particularly if the family is in the midst of a medical crisis.
"I feel like the patient should know what their financial responsibilities will be, I support the concept," she says. But at the same time she says she also understands the real challenges hospital staff members involved in delivering that information will face.
Another factor complicating the notification is that it’s unclear how many languages the document will be available in. At Massachusetts General Hospital, patients speak a multitude of languages so the hospital will likely need translation services when delivering the written and verbal notices.
A third challenge is having a system in place to ensure all the patients who need notifications, get them.
"The biggest implementation challenge will be to ensure we have a mechanism in place to capture all the patients that have been in observation across the hospital," says Firmin. "Although we have a dedicated observation unit, we often have observation patients overflowing across the hospital."
In order for the notification process to be successful, staff members?including nursing staff?should be engaged in the process, says Sullivan. Ideally, nursing staff should have a working knowledge of these issues, particularly in the event a case manager isn’t available and a patient starts asking questions.
It remains to be seen what the final MOON form will look like. CMS opened a 30-day comment period on the MOON August 1 and has said that the rule will go into effect no more than 90 days from the finalization of the form.
Based on this timeline, Kates says she anticipates a January 1 start date, but that remains to be seen.
In the meantime, organizations will be waiting to see the final result of this process, and from there determining how to comply.
Ask the Expert
Questions about MOON and CMS notification regulations
Learning objective
At the completion of this educational activity, the learner will be able to:
- Identify strategies to comply with the Medicare Outpatient Observation Notice (MOON) notification and understand rules related to navigating the skilled benefit for Medicare
One of the topics raising the most questions in case management today is related to the MOON notification requirement. Hospitals were struggling this summer to comply with the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, which was signed by President Barack Obama August 6, requiring 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. Just prior to the August 6 implementation date, hospitals received word that the notification requirement would be delayed pending approval of modifications made to the government’s notification form. (See related story on p. 1.)
But despite the delay, case managers still have questions about MOON, which were answered this month by Ronald Hirsch, MD, FACP, CHCQM, vice president of the Regulations and Education Group at Accretive Health in Chicago. Janet L. Blondo, MSW, LCSW-C, LICSW, CMAC, ACM, CCM, C-ASWCM, ACSW, manager of case management at Washington Adventist Hospital in Takoma Park, Maryland, and Peggy Rossi, BSN, MPA, CCM, a consulting associate for the Center for Case Management in Wellesley, Massachusetts, also tackled a Medicare notification question this month.
Q: What is the consequence if we miss giving a patient who meets the MOON criteria the notice? Has there been an update if the observation hours will need a modifier or the claim a value or condition code to show that the notice was given?
Hirsch: CMS has not stated the consequence of not issuing a MOON. CMS will be updating its survey tools in the future and may address it there. CMS stated in the IPPS final rule that, "all monitoring and enforcement of the MOON will be consistent with our oversight procedures for other hospital delivered notices."
Q: Now that CMS has released a new version of the MOON form, how should my organization proceed?
Hirsch: CMS released a new version of the MOON August 1, but it must go through the public comment period. After that time, it will be issued an Office of Management and Budget number and then there will be a 90-day implementation period. Until that time, hospitals should follow any state regulations for notices to outpatients and patients receiving observation services.
Q: I read your article on navigating the skilled benefit for Medicare and I have a few related questions. My understanding is that you can only use a Hospital-Issued Notice of Noncoverage (HINN) for inpatient, so you could use it if less than a three-day stay. We have been giving Advance Beneficiary Notices (ABN) for our traditional Medicare patients that are observation when families are not timely on getting a skilled nursing facility secured to those patients that require it. Is this correct?
Rossi: The HINNs have varied uses, and if a HINN is used it should be the HINN1, as this is a letter used to deny any admission?it is a preadmission denial and is issued when it is known the stay will not be covered. Another letter to use will be an ABN, as the ABN is a letter designed by CMS to deny outpatient services, when it is known they will not be covered.
Blondo: HINN1 is known as a preadmission/admission HINN and can be given prior to a hospital stay when it is expected that the entire stay will be denied for coverage. So if a patient was brought to the hospital ED for the purpose of SNF placement and the physician is writing an order to admit to inpatient, many hospitals have their ED case manager intervene by giving the patient and family the HINN1. The physician does not have to agree with the issuance of the denial notice. Seeing the denial notice often convinces the patient and family to choose another plan of care for the patient, and no admission takes place.
For patients placed in observation, ABNs are used for Medicare Part B outpatient services when it is believed Medicare will no longer pay for the services it normally would cover. Some common reasons one would issue an ABN include when services are not reasonable and necessary or when the care is custodial. So if the family hasn’t moved fast enough to take that available SNF bed and the patient’s care is considered custodial, it is correct to issue the ABN.
For more information, see Medicare Advance Beneficiary Notices, October 2015, Medicare Learning Network, Department of Health and Human Services, Centers for Medicare & Medicaid Services at: www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/abn_booklet_icn006266.pdf.
Got a question on any case management topic that you’d like to ask our experts? Email it to Kelly Bilodeau at Kelly@phbphoto.com.