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CMS Releases Medicare Outpatient Observation Notice Form

On December 8, 2016, the Centers for Medicare and Medicaid Services (CMS) published the Medicare Outpatient Observation Notice (MOON), which educates Medicare beneficiaries on the effect of outpatient status, particularly as it pertains to cost-sharing requirements and skilled nursing facility (SNF) eligibility. The MOON was published by CMS to implement the Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act), which was enacted on August 6, 2015. The NOTICE Act seeks to eliminate any surprises Medicare beneficiaries might experience after (1) receiving large out-of-pocket costs for a hospital stay in which they received outpatient observation services but were not admitted as inpatients, and (2) learning that time spent under observation does not count toward their eligibility for SNF coverage.

Beginning on March 8, 2017, hospitals and critical access hospitals must provide the MOON to Medicare beneficiaries receiving observation services as an outpatient for more than 24 hours. The MOON must be provided no later than 36 hours from the time the beneficiary begins receiving outpatient observation services (or, if sooner, upon release). The MOON must be accompanied by an oral explanation of the information in the form and must be signed by the beneficiary or the beneficiary’s representative. Failure to provide the MOON to applicable beneficiaries is considered a violation of the hospital’s Medicare provider agreement and could result in termination of the hospital’s Medicare provider agreement.

Hospitals should ensure they understand the NOTICE Act requirements and implement applicable policies and procedures for MOON compliance prior to March 8, 2017.

A copy of the MOON is available from CMS’s website.

© 2020 McDermott Will & EmeryNational Law Review, Volume VI, Number 356


About this Author

Emily J. Cook, McDermott Will Emery Law Firm, Health Care Attorney

Emily J. Cook is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Los Angeles office.  She focuses her practice on Medicare provider certification, reimbursement and regulatory compliance.

Monica Wallace, regulatory counseling lawyer, administrative attorney, McDermott Will Emery, law firm

Monica A. Wallace is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on complex regulatory and transactional counseling to health care organizations such as health systems, hospitals, physician groups, integrated delivery systems, durable medical equipment prosthetics and orthotics suppliers, home health agencies, and other health care providers. Monica’s regulatory practice focuses on the Anti-Kickback and Stark laws; Medicare and Medicaid reimbursement and billing; legal assessments and compliance programs; and other general regulatory matters including licensure, survey/certification, and accreditation. Her transactional practice includes mergers, acquisitions and affiliations; divestitures; hospital/physician joint ventures; and corporate reorganization.

Justin P. Aiello, Litigation Attorney, McDermott Will, Law firm

Justin P. Aiello is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Miami office.  He focuses his practice on litigation matters.

Justin received his J.D., magna cum laude, from the University of Miami School of Law, where he was a member of the Business Law Review.  While at the University of Miami, he acted as a Dean’s Fellow in the legal research and writing department.  Justin also served as a judicial intern for the Honorable Edwin G. Torres of the United States District Court for the Southern District of Florida, and the...

Dana Dombey, McDermott, private equity funds lawyer, strategic investors attorney

Dana Dombey focuses her practice on representing private equity funds, strategic investors, ambulatory surgery centers and physician practices in a variety of transactional and regulatory matters.

Dana has assisted clients in connection with numerous transactions, including management and professional service arrangements, mergers and acquisitions, and joint ventures. She also regularly advises clients with respect to state licensure issues, compliance, Medicare and Medicaid reimbursement, corporate practice of medicine laws, the Anti-Kickback...