March 2017

Medicare Outpatient Observation Notice Requirement

Applies to: Blue Cross Medicare Advantage (HMO)^SM and Blue Cross Medicare Advantage (PPO)^SM

Effective March 1, 2017, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) requires hospitals and critical access hospitals (CAH) to provide notification to individuals receiving observation services as outpatients for more than 24 hours.

Hospitals and CAHs are required to give the CMS-developed standardized notice – the Medicare Outpatient Observation Notice (MOON) – to a Medicare beneficiary or enrollee who has been receiving observation services as an outpatient for more than 24 hours. The notice must be provided no longer than 36 hours after observation services are initiated. To obtain a copy, visit the CMS website and then scroll down for copies of the CMS MOON instructions and forms in both English and Spanish.

The MOON will inform nearly one million beneficiaries annually of the reason the individual is an outpatient receiving observation services and the implications of observation services on cost sharing.

An oral explanation of the MOON must be provided, ideally in conjunction with the delivery of the notice. A signature must be obtained from the individual (or an individual qualified to act on their behalf) to acknowledge the receipt and understanding of the notice (or in cases of refusal of signature by such individual, signature by the staff member of the hospital or CAH providing the notice).