Are You Prepared To MOON Your Patients?

Medical Outpatient Observation Notice (Moon) …Coming soon to a Hospital Near You

On April 18, 2016, the Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule for implementing the Notice of Observation Treatment and Implication for Care Eligibility (“NOTICE”) Act. The proposed rule requires CMS to develop a standardized form known as the Medicare Outpatient Observation Notice (“MOON”) to notify patients classified as outpatients receiving observation services and the implications of that status. When finalized, the MOON form must be presented to, verbally discussed with, and signed by certain Medicare patients who are placed in outpatient observation status.  The full text of the proposed rule can be found here.


The NOTICE Act was enacted on August 6, 2015. It requires hospitals, including CAHs, to inform Medicare patients who receive outpatient observation services for more than 24 hours of their observation status and its implications in terms of cost-sharing while in the hospital and for subsequent eligibility for coverage in a skilled nursing facility. The notice is required to be given within 36 hours of the beginning of such services or upon release from the hospital if release occurs sooner than 36 hours.

The standardized notice, or “MOON” form is going through the approval process and is subject to a 30-day public comment period that began on August 22, 2016 when the final rule was published. The final rule can be found here. The final rule became effective on August 6, 2016. However, mandated use of the MOON notice form is subject to a 30-day public comment period beginning on August 22, 2016. Following the review of comments and final approval of the MOON under the Paperwork Reduction Act (PRA), hospitals and CAHs must fully implement use of the MOON no later than 90 calendar days from the date of approval of the standard form.

Summary of the Rule

CMS has proposed use of a standardized notice form, called the Medicare Outpatient Observation Notice (MOON), which must be used by all applicable hospitals and CAHs. An English language version of the MOON has been presented to the Office of Management and Budget for approval and is subject to public review and comment. Once approved, a Spanish language version will also be made available. 

The final rule requires hospitals and CAHs to provide the standardized MOON form to patients entitled to Medicare benefits if the patient receives more than 24 hours of outpatient observation services.

The written MOON form, once approved:

  • Will include all the informational elements required for written notice under the NOTICE Act;

  • Will include a blank “additional information” section for providing any additional relevant information;

  • Must be provided no later than 36 hours after observation services are initiated, or sooner if the individual is transferred, discharged or admitted as an inpatient;

  • Must be accompanied by a verbal explanation of its contents; and

  • Must be signed by: (i) the patient; (ii) the patient’s representative; or (iii) if the patient/patient representative refuses to sign, the staff member who presented the MOON along with additional required information regarding the signature refusal. 

The NOTICE Act applies only to individuals entitled to Medicare benefits, including beneficiaries enrolled in Medicare Advantage or other Medicare health plans. The MOON form and verbal notification must be provided to patients entitled to Medicare benefits regardless of whether the outpatient observation services furnished are payable under Medicare. For example, the MOON must be provided to a Medicare Part A patient who has not enrolled in Part B even though the outpatient observation services would not be covered under Medicare Part A for that patient. The notice requirements apply equally to patients enrolled in a Medicare Advantage or other Medicare health plan.

Prepare to MOON Your Patients!

Facilities and other interested parties impacted by the NOTICE Act should consider updating policies and procedures to address the NOTICE Act requirements, i.e., providing the MOON form and verbal notification. Additionally, hospitals and CAHs should plan education and training for personnel delivering the MOON form, explaining its contents, and obtaining the requisite signature(s). 

About the Author

Michelle K. Buford is a healthcare regulatory attorney practicing with the law firm of Sullivan Stolier Schulze & Grubb LLC.

Sullivan Stolier Schulze & Grubb has assisted its clients for many years with compliance and other healthcare regulatory issues.