CMS Issues Instructions Regarding the Medicare Outpatient Observation Notice (MOON)

Beginning no later than March 8, 2017, and as required by the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act),[1] hospitals and critical access hospitals (CAHs) are required to give patients both oral and written notice when they are outpatients and not admitted as inpatients.[2]  Hospitals must use the written notice developed by the Centers for Medicare & Medicaid Services (CMS), which is called the Medicare Outpatient Observation Notice (MOON).[3]

CMS has now provided additional guidance and instructions about the MOON.[4]

Who, Besides the Patient, Can be Given the MOON

Although the NOTICE Act requires hospitals to give oral and written notice to the outpatient,[5] the MOON requires the signature of the patient or the patient’s representative.[6]

Further elaborating on who can be given oral and written notice of a patient’s observation status, CMS’s instructions define three categories of representatives:[7]

  • Appointed representatives, who “are designated by beneficiaries to act on their behalf;”
  • Authorized representatives, who, “under State or other applicable law, may make health care decisions on a beneficiary’s behalf (e.g., the beneficiary’s legal guardian, or someone appointed in accordance with a properly executed durable medical power of attorney); and
  • A person (typically, a family member or close friend) whom the hospital or CAH has determined could reasonably represent the beneficiary, but who has not been named in any legally binding document, [who] may be a representative for the purposes of receiving the MOON.”[8]  The hospital staff person who initiates contact with the family member or close friend must annotate the MOON and record the date, time, and method of contact (in person or by telephone).

In an exception to the requirement that the MOON be given in person to the patient, CMS’s instructions allow a hospital to make “an off-site delivery to the representative.”  The hospital must communicate orally all of the information contained on the MOON to the representative and then must send “a copy of the annotated MOON” to the representative “by certified mail, return receipt requested, or any other delivery method that can provide signed verification of delivery (e.g., FedEx, UPS).”  The MOON must be mailed on the same day as the telephone call.

Alternatively, if agreed to by the hospital and the representative, the hospital “may send the notice by fax or e-mail.”[9]

Ensuring Beneficiary Comprehension

CMS’s instructions require hospitals to use “their usual procedures to ensure notice comprehension.”[10]  These procedures may include “translators, interpreters, and assistive technologies” as well as language assistance services to individuals with limited English proficiency (LEP) consistent with section 1557 of the Affordable Care Act (ACA) and Title VI of the Civil Rights Act of 1964.”[11]   In addition, as required by the ACA and §504 of the Rehabilitation Act of 1973, hospitals must provide auxiliary aids and services free of charge to patients with disabilities.[12]  The MOON is currently available in English and Spanish.[13]

Hospital Retention of MOON

The original signed MOON must be retained in the beneficiary’s medical record at the hospital.[14]

MOON Training, February 7, 2017

In a very short training call on February 7, CMS referred callers to its guidance documents and declined to answer participants’ written or oral questions.  One posted question asked whether the MOON requires a description of the clinical reason why a patient is an outpatient or whether the hospital can write a statement like “your doctor expects less than two midnights of care.”  This written question was not answered.

The presentation used at the February 7 training describes those patients who must be given the MOON in two ways: as “outpatients” and as “beneficiaries receiving outpatient observation services.”[15]  The final rules provide that notice must be given only to patients who receive “observations services as an outpatient” for more than 24 hours.[16]  In explaining why we have the MOON, the presentation notes, “Outpatient distinction often unclear.”

CMS will have another call on March 7.  Questions may be submitted to MOONMailbox@cms.hhs.gov.

February, 2017 – T. Edelman


[1] Pub. L. 114-42, 42 U.S.C. §1395cc(a)(1)(Y).
[2] Prior Alerts have discussed the NOTICE Act and regulations. See “Hospitals Must Give Patients Notice of Their Observation Status, Beginning March 8, 2017, CMA Alert (Dec. 14, 2016); “Observation Status and the NOTICE Act: Advocates Not Over the MOON,” CMA Alert (Apr. 27, 2016), http://www.medicareadvocacy.org/observation-status-and-the-notice-act-advocates-not-over-the-moon/; “CMS Delays Implementation of NOTICE Act Until Fall 2016,” CMA Alert (Aug. 4, 2016), http://www.medicareadvocacy.org/cms-delays-implementation-of-notice-act-until-fall-2016/; “Observation Status: The NOTICE Act Will Soon Be Law,” CMA Alert (Aug. 6, 2015), http://www.medicareadvocacy.org/observation-status-the-notice-act-will-soon-be-law/.
[3] https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html.  Click on the download for CMS—10611.
[4] CMS, “Medicare Outpatient Observation Notice (MOON) Instructions,” Transmittal 3695, Change Request 9935 (Jan. 20, 2017), https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3695CP.pdf, MLN Matters, “Medicare Outpatient Observation Notice (MOON) Instructions,” https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9935.pdf.
[5] 42 U.S.C. §1395cc(a)(1)(Y).
[6] https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html.  Click on the download for CMS—10611.
[7] CMS, “Medicare Outpatient Observation Notice (MOON) Instructions,” Transmittal 3695, Change Request 9935 (Jan. 20, 2017), https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3695CP.pdf, MLN Matters, “Medicare Outpatient Observation Notice (MOON) Instructions,” https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9935.pdf.
[8] CMS, “Medicare Outpatient Observation Notice (MOON) Instructions,” §400.3.6 (Transmittal 3695, Change Request 9935) (Jan. 20, 2017), https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3695CP.pdf.
[9] Id.
[10] Id. §400.3.7.
[11] Id.
[12] Id.
[13] Id.
[14] Id. §400.3.9.
[15] Janet Miller, CMS, “Medicare Outpatient Observation Notice” PowerPoint (Feb. 7, 2017), http://www.medicareadvocacy.org/wp-content/uploads/2017/02/MOON-Webinar-2017-slides.pdf.
[16] 81 Fed. Reg. 56761, 57039 (Aug. 22, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-08-22/pdf/2016-18476.pdf (declining to provide notice to patients who do not receive “observation services”).  See discussion of which patients receive the MOON in CMA, “CMS Delays Implementation of NOTICE Act Until Fall 2016,” CMA Alert (Aug. 4, 2016), http://www.medicareadvocacy.org/cms-delays-implementation-of-notice-act-until-fall-2016/.