Get Ready to MOON Your Patients!


The requirements of the NOTICE Act take effect on August 6.

By Timothy Kelly, MS, MBA

“They’ve ordered observation for Mr. Smith. Would you please MOON him?”

While that exchange may strike us as a joke today, it will likely become part of our accepted vernacular in just a couple of months. A MOON – Medicare Outpatient Observation Notice – is both a written document to be executed and also a conversation to be had with a patient. This new Centers for Medicare & Medicaid Services (CMS) form is designed to meet the requirements set forth in the Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act).

Putting patients on NOTICE

The NOTICE Act – signed by President Obama on August 6, 2015 – is designed to help eliminate confusion on the part of Medicare beneficiaries who are admitted for observation services as outpatients. In 2014 testimony before the Senate Special Committee on Aging, providers noted that many seniors have never heard of “observation.” Older Medicare patients often expect admission to a hospital to be covered under Medicare Part A, the entitlement that they paid into throughout their working lives. Many hospitals endeavor to address this knowledge gap by educating patients who are admitted for observation services as outpatients. Those organizations typically advise patients on an impromptu basis that their observation care may be covered to an extent by Medicare Part B, assuming the patient is part of the 93 percent of beneficiaries who have Part B coverage. The NOTICE Act seeks to standardize this education process and ensure that it is applied consistently and uniformly to every Medicare beneficiary. 

All hospitals must comply with the provisions of the NOTICE Act effective August 6, 2016. Notification must be provided to all patients who receive observation services as outpatients for greater than 24 hours. That notification – the MOON – must be provided no later than 36 hours after service begins. The information communicated to patients via the MOON focuses primarily on financial considerations, including:

  • A reminder that Medicare Part A does not cover outpatient services.
  • An explanation that Medicare Part B may result in a copayment for each individual outpatient hospital service along with a 20% copayment for most physician services (after the Part B deductible).
  • A statement that the provision of typical medications that a patient may be taking for chronic conditions (“self-administered” drugs) will likely result in an out-of-pocket charge to the patient.
  • An advisement that observation services as outpatient will not count as part of the three-day inpatient stay required for Medicare Part A coverage of subsequent care in a skilled nursing facility.

Shoot for the MOON

The MOON (CMS form number CMS-10611) is presently available in draft form, along with a supporting statement that provides background on the MOON and instructions for completing the MOON. A few key points concerning this notification process:

  • The notification to patients must be oral as well as written, with the MOON serving as the written component.
  • The MOON may be issued electronically, including the use of digitized signature capture. However, a paper copy of the signed MOON must still be provided to the patient.
  • An acknowledgement signature must be obtained from either the patient or his/her representative.
  • In the event that the Medicare beneficiary refuses to sign the MOON, the staff member who presented the notice must append a statement certifying that notice was presented along with the staff member’s name, title, signature, date, and time.
  • Key pieces of information for providers to know when completing the MOON: the patient’s attending physician for the hospital visit as well as the date and time at which observation services began for the patient.

Considerations to MOON over

Better-informed patients may likely ask additional questions and may make decisions based on the information provided. Forward-thinking hospitals will be prepared for:

  • Patients who request pricing information. Upon understanding their copayment responsibilities, patients may want to estimate their out-of-pocket costs associated with an outpatient stay.  Many hospitals currently offer patient price lists. Ensure that your price list describes the cost of observation services, common laboratory and diagnostic tests, and the cost of typical doses of “self-administered” drugs.
  • Patients who leave AMA (against medical advice). Upon learning the financial implications of a hospital visit not covered by Medicare Part A, some patients may elect to leave AMA. As a result, organizations should endeavor to formalize their patient follow-up initiatives. The best programs contact all patients who leave the ED the day after discharge to assess well-being, understanding of instructions, and compliance with plans for follow-up appointments with primary care providers.

Once in a Blue MOON

CMS estimates that delivery of the MOON will take only five minutes. This is likely a fair projection for knowledgeable patients who have previously received observation services as an outpatient; this is extremely optimistic for patients who are new to the process. Well-prepared hospitals will endeavor to educate patients about the nuances of outpatient care early in their stay – prior to the order for observation services – by providing patients with supplemental education materials. Easy-to-understand documents have been developed by CMS and by many state hospital associations (e.g. Florida, Illinois, South Carolina).



Tim Kelly is responsible for patient education and patient follow-up solutions at Taylor Healthcare. He has presented on the NOTICE Act at the 2016 Texas Regional HIMSS Conference and at RL Palooza ‘16. On both July 7 and July 21, at 1 p.m. EST, Tim will present a complimentary webinar: “The NOTICE Act: What Your Organization Must Have in Place by August 6.”