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MOON Advisory: Medicare Updates Observation Status Rules

By Christopher Cheney  
   December 08, 2016

Beginning in March, hospitals will be required to notify Medicare beneficiaries of the financial consequences of receiving at least 24 hours of hospital services under outpatient status.

An updated version of the Medicare Outpatient Observation Notice (MOON), which alerts Medicare beneficiaries about the potential coverage consequences of inpatient vs. outpatient status at hospitals, was released by the Centers for Medicare & Medicaid Services this week.

By March 8, 2017, hospitals will be required to present the MOON advisory in writing and verbally to Medicare beneficiaries who receive at least 24 hours of hospital services under outpatient status.

Read the MOON

Patient status can have a significant financial impact on how Medicare pays for medical services provided in hospitals and post-acute-care settings such as skilled nursing facilities.

Advisory Highlights
Under the advisory, for outpatient care in a hospital, services are paid under Medicare Part B. "For Part B services, the beneficiary generally pays. Medicare beneficiaries admitted to hospitals as inpatients have their services reimbursed at the higher Medicare Part A rates.

If a Medicare beneficiary is not admitted to a hospital as an inpatient for at least three days, stays at post-acute care facilities are not reimbursable at Medicare Part A rates.

In addition to giving Medicare beneficiaries advance warning about the three-day minimum inpatient-stay requirement for Part A reimbursement of SNF care, MOON also helps alert Medicare beneficiaries about the potential reimbursement consequences of CMS' so-called two-midnight rule.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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