KHA Update: Notification Procedures for Outpatients Receiving Observation Services

Enacted August 6, 2015, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) requires hospitals and Critical Access Hospitals (CAHs) to provide notification to individuals receiving observation services as outpatients for more than 24 hours.  Hospitals and CAHs would be required to furnish a new standardized notice developed by the Centers for Medicare & Medicaid Services (CMS), the Medicare Outpatient Observation Notice (MOON), to a Medicare beneficiary who has been receiving observation services as an outpatient for more than 24 hours. The statute also mandates that the Secretary of Health and Human Services develop a plain language written notice.

To fulfill the statutory requirements, CMS developed the MOON for approval.  The MOON will serve as the standardized form to notify persons entitled to Medicare benefits, and it contains all of the informational elements as required by law.  A copy of the CMS Supporting Statement for the MOON, the actual MOON form, and the instructions can be downloaded from CMS’s Paperwork Reduction Act (PRA) listings webpage at: 

The statutory effective date of the NOTICE Act is 12 months after the date of the enactment, which is August 6, 2016.  CMS accepted public comments on the MOON as part of the 2017 inpatient prospective payment system (IPPS) proposed rule for 2017.  KHA provided comments to CMS regarding the August 6 effective date, expressing concern that additional time is needed to allow hospitals to fully implement processes required to fulfill this requirement.  Hospitals should review the MOON notice and instructions to develop a plan for implementation of this CMS requirement

Tish Hollingsworth
Vice President of Reimbursement
Kansas Hospital Association
(785) 233-7436