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.