Last week was an anxiety-inducing week for me. The 2017 Inpatient Prospective Payment System (IPPS) final rule was expected on Aug. 1, and in fact it was required by statute to be released on that date.

But that didn’t happen; the Centers for Medicare & Medicaid Services (CMS) made me wait another day. Yet when it was released on Aug. 2, CMS gave us the long-awaited information on the Medicare Outpatient Observation Notice, or MOON. The MOON was mandated by the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, and was required by law to be issued to all patients receiving more than 24 hours of observation services as of Aug. 6.

To add to my frustration, when the IPPS final rule was finally released, it took CMS 165 carefully crafted words to say that it was delaying the federal requirement to notify observation patients. And because they don’t come right out and say it, and due to the fact the law says we have to start on Aug. 6, many have questioned this.

The best analogy I can think of is this: there is a law ruling that when driving, you have to stop at red lights. But if you approach an intersection with a red light and there is a police officer instructing you to drive through the intersection, you are going to keep driving. The police officer is permitted to allow you to break the law. So CMS is the police officer here, telling hospitals that they are allowed to break the law that Congress passed – until they tell you that you must start obeying it.

There was some good news in the rule. CMS is not specifying what staff must present for the MOON; you can train clerical staff to do it. You can also present the MOON prior to the 24th hour of observation. In fact, you can present it at the initiation of observation services, but CMS has reminded hospitals that at that time, patients are often overwhelmed with paperwork and uncertainty – so they encourage hospitals not to routinely present it at the beginning of observation.  

But the reality is that most observation patients are stable, and that’s why they are not being admitted as inpatients. So shouldn’t we tell patients when they start to receive a service that they are receiving that service instead of afterwards? I think that the emergency department (ED) is the place for the MOON for most patients, but proper judgment should be used. If a patient is overwhelmed, confused, or insufficiently stable to participate in a discussion, the MOON should be deferred until that changes.

As expected, the MOON rules received a lot of attention, including an article in the New York Times. But what got my blood boiling was a statement by the Center for Medicare Advocacy in its press release about the MOON.

“Although there is no formal way to change a patient’s status, patients and their families and advocates should do whatever they can to get the patient’s status changed to inpatient while the patient is still in the hospital,” the release read. “Ask the attending physicians to help.”

This is outrageous; the Center is telling patients to ask the hospital staff and doctor to commit Medicare fraud. Patients who do not warrant inpatient admission cannot be admitted as inpatients. There is nothing that patients or family members can do to change that other than to talk to their elected representatives about the federal regulations. Furthermore, observation is less expensive for the patient than admission when the two-midnight rule is followed, so insisting on inpatient admission is insisting on a higher bill. In my opinion, The Center for Medicare Advocacy should issue a formal retraction.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the American Case Management Association and a Fellow of the American College of Physicians.

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PROGRAM NOTE: For more information on the MOON, download the on-demand webcast “Avoid Being Wrong on Patient Rights,” conducted by Ronald Hirsch, MD.

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