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Medicare and the MOON

Starting in 2017, all hospitals and critical access hospitals (CAH) were required by law to give the Medicare Outpatient Observation Notice, known as MOON, to patients receiving observation services. If you’re new to the world of Medicare, what does the MOON mean for your loved one? This article explains.

What is MOON?

The MOON is a standardized notice to inform beneficiaries (including Medicare health plan enrollees) that they are an outpatient receiving observation services and are not an inpatient of the hospital or CAH.

The MOON is mandated by the Federal Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act), passed on August 6, 2015. The NOTICE Act requires all hospitals and CAHs to provide written and oral notification, within 36 hours, to patients who are in observation or other outpatient status for more than 24 hours. The notice must explain the reason that the patient is an outpatient (and not an admitted inpatient) and describe the implications of that status both for cost-sharing in the hospital and for subsequent “eligibility for coverage” in a skilled nursing facility (SNF).

What are Observation Services?

Observation services are given to help your loved one’s doctor decide if the patient needs to be admitted as an inpatient or discharged. A patient can be under observation in the emergency department or another area of the hospital, including a regular patient bed. Observations usually last 48 hours or less.

Observation services have been around for a long time. The problem is that patients and their families haven’t always been notified when a loved one was receiving observation services. The MOON form changes that.

Being a hospital outpatient affects the amount your loved one may have to pay for time in the hospital and may affect coverage of services after he or she leaves the hospital. Medicare has a number of rules about the way they pay for care in a hospital.

Medicare Part B covers outpatient hospital services, including observation services when they are medically necessary. Generally, if you have Medicare Part B, you may pay:

  • 20 percent of Medicare-approved amount for most doctor services, after the Part B deductible, or

  • A copayment for each individual outpatient hospital service that you get.

Part B copayments may vary by type of service. In most cases, your copayment for a single outpatient hospital service won’t be more than your inpatient hospital deductible. However, your total copayment for all outpatient services may be more than the inpatient hospital deductible.

If you’re enrolled in a Medicare Advantage plan (like an HMO or PPO), your costs and coverage are determined by your plan. Check with your plan about coverage for outpatient observation services.

If you are a Qualified Medicare Beneficiary through your state Medicaid program you cannot be billed for Part A or Part B deductibles, coinsurances, and copayments.

Questions? Call Takacs McGinnis Elder Care Law at (615) 824-2571.


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