​The Centers for Medicare and Medicaid Services (CMS) has provided additional guidance to hospitals on providing a Medicare Outpatient Observation Notice (MOON) to Medicare beneficiaries who receive observation services as outpatients for more than 24 hours. The provision went into effect on March 8, 2017. In answers to hospitals' frequently asked questions (FAQ) about the notice, CMS advises hospitals that they cannot modify the format and language of the standardized notice except the free-text field of the notice. The standardized two-page notice informs the beneficiary about observation services and the implications it can have for the beneficiary's cost sharing and the beneficiary's eligibility for Medicare coverage of post-hospital skilled nursing services. The free-text field is intended to provide the clinical rationale for a beneficiary to receive observation services as an outpatient. The language should be "reasonably understandable" to the beneficiary and explain that the physician has ordered outpatient observation services to evaluate the beneficiary's symptoms and diagnosis and to assess whether the beneficiary should be admitted, discharged, or transferred to another facility, CMS advised. Hospitals can modify the free-text field to use prepopulated checkboxes as long as the option remains to enter free text for circumstances that do not fit within the prepopulated checkboxes. CMS also noted that psychiatric hospitals are required to comply with the provisions to provide the notice. The notice must be provided to beneficiaries or their representatives no later than 36 hours after observation services begin. CMS estimates that about 1 million beneficiaries will receive the notice annually.

HRC Recommends: Risk managers should review CMS's guidance about the required notice and ensure that their organizations' approach complies with all the provisions to give notice to Medicare beneficiaries in outpatient observation.