Skip to Content

MOON Notices Have Been Required Since March 8, 2017

on Tuesday, 7 March 2017 in Health Law Alert: Erin E. Busch, Editor

On March 8, 2017, Medicare hospitals and critical access hospitals (“CAH”) were required to begin giving notices to Medicare patients who remain in observation bed status for more than 24 hours.  The Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) was adopted in August 2015, establishing the Medicare Observation Notice (MOON) as a means of informing Medicare beneficiaries of the impact of being an observation patient as opposed to an inpatient.

The principal differences to be explained to Medicare beneficiaries is the beneficiary responsibility for cost-sharing as a result of receiving observation services under Part B in contrast to inpatient services under Part A and the fact that observation status does not count toward the three day inpatient stay that is a condition of Medicare covered skilled nursing services.  The MOON form specifically explains that for Part B services, the beneficiary generally pays a copayment for each outpatient hospital service and 20 percent of the Medicare-approved amount for physician services , after the Part B deductible has been paid.

It is anticipated that Medicare hospitals will issue more than one million MOON notices annually.  As a part of the process of issuing the MOON notice, there must be a verbal instruction on the contents of the MOON and a chance for questions and answers.  The hospital or CAH staff is to attempt to obtain the signature of the Medicare beneficiary or a responsible party on the beneficiary’s behalf. Because timing is important, the beneficiary or responsible party is to be asked to date his/her signature.  If the individual refuses to sign the MOON, the hospital or CAH staff is required to sign the notice to certify that notification was provided.

CMS has developed a MOON form, which can be placed on hospital or CAH letterhead.  The most challenging blank to be filled in on the MOON is in response to the following prompt:

“You’re a hospital outpatient receiving observation services.  You are not an inpatient because: _____________________________.”

“Observation care” is defined by the Medicare Benefit Policy Manual as “ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.”  Thus, a reasonable insert in response to that prompt will almost always be something along the lines of “you require ongoing short term treatment or assessment before a decision can be made whether you will require treatment as a hospital inpatient.”

The MOON notice may be furnished immediately at the time of admission to observation status, and in any event must be provided no later than 36 hours after such admission.  As indicated above, the notice must be provided to all patients who stay longer than 24 hours.

The MOON form prepared by CMS is available on the CMS website, along with instructions.  

Barbara E. Person



1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500

Law Firm Website Design