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Medicare Outpatient Observation Notice

How Hospitals Must Inform Patients of Observation Status

The Centers for Medicare and Medicaid Services (CMS), on December 8, 2016 published the Medicare Outpatient Observation Notice (MOON). The MOON is to educate hospitalized Medicare beneficiaries on the effects of outpatient status. If you are in observation care (not admitted) at the hospital, your services will be billed to Medicare Part B. This notice should alleviate any surprises Medicare beneficiaries may encounter in regards to Medicare Part B charges and not qualifying for skilled nursing facility care.

Even if you stay overnight in a hospital bed, you might be in observation or outpatient status. Medicare Part B covers outpatient hospital services. You pay a copayment for each individual outpatient hospital service you receive, paying 20% of the Medicare approved amount after you pay the Part B annual deductible of $183 (for 2017). If you remain in observation status throughout your entire stay (not admitted), you are not eligible for Medicare covered skilled nursing facility care after your hospitalization. Medicare will only cover skilled nursing care if you first have a qualifying inpatient (not observation status) hospital stay. A qualifying inpatient hospital stay means that you have been admitted to the hospital for three consecutive days (counting the day you’re admitted, but not counting the day of your discharge). You pay nothing for covered skilled nursing facility services for the first 20 days, then a copayment for days 21-100. Medicare will not pay beyond 100 days.

Starting March 8, 2017, if you are a Medicare beneficiary and have been in observation status for more than 24 hours, hospitals and critical access hospitals must provide the MOON to you. The notice has to be provided no later than 36 hours after observation services are started, or if sooner, upon release.

An oral explanation of the MOON must be provided, ideally in conjunction with the delivery of the notice and a signature must be obtained from the individual, or a person acting on such individual’s behalf, to acknowledge receipt. In cases where such individual or person refuses to sign the MOON, the staff member of the hospital providing the notice must sign the notice to certify that notification was presented.

All individuals with Medicare have certain guaranteed rights. You have the right to have your questions about Medicare answered and get a decision about health care payment or services. You have the right to get a review (appeal) and file a complaint (sometimes called a “grievance”) of certain decisions about health care payment and coverage of services.

If you have any questions about your observation services, ask the hospital staff member giving you the MOON or the doctor providing your hospital care. You can also ask to speak with someone from the hospital’s utilization or discharge planning department. 1-800-MEDICARE is always a good resource for answers to your medical costs. If you need further assistance, call Senior Services at 633-3700. Consultations are available throughout the year for those who would like assistance with Medicare questions or options.