Archive: 31 July 2016

Starting next week all hospitals have to start serving the MOON to patients

templatesThe Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act), which was enacted on August 6, 2015 law requires hospitals and critical access hospitals (CAHs) to provide written notification and an oral explanation to individuals receiving observation services as outpatients for more than 24 hours. This notification must be provided no later than 36 hours after observation services are initiated or sooner if the patient is being transferred, discharged, or admitted as an inpatient. CMS then details their proposal in the form of possible scenarios of when the MOON would or would not be given. if released from the hospital or CAH.

CMS expects there will be times when an individual has received more than 24 hours of observation services that has not yet received the MOON, and there are imminent plans for discharge to home, another facility, transfer to another unit or facility to receive care that does not include observation services, or admission to the hospital or another facility as an inpatient. In these cases CMS is proposing “that the MOON must be given sooner than the 36-hour time limit for delivery because the MOON must be delivered before the individual is discharged, transferred, or admitted. When there are no plans to transfer, discharge, or admit an individual who receives observation services for more than 24 hours, we are proposing that the MOON must be provided within 36 hours of the initiation of observation services.”

CMS also believe that in the “rare circumstances where a physician initially orders inpatient services, but following internal utilization review (UR) performed while the patient is hospitalized, the hospital determines that the services do not meet its inpatient criteria and the physician concurs with UR, orders the discontinuation of inpatient services and initiation of outpatient observation services (that is, a Condition Code 44 situation), the MOON would be delivered as required by the NOTICE Act (when outpatient observation services have been ordered and furnished for more than 24 hours).”

When a CMS reviewer determines that an inpatient admission was not medically reasonable and necessary after the beneficiary has been discharged making the stay not appropriate for Medicare Part A payment, “the beneficiary’s patient status remains “inpatient” as of the time of the inpatient admission. The patient’s status is not changed to outpatient because the beneficiary was formally admitted as an inpatient, and there is no provision to change a beneficiary’s status after he or she is discharged from the hospital.” In this scenario there would be no need to issue the MOON as the patient’s status remains inpatient regardless that it was an improper admission.

Similar to Scenario 3, when a hospital determines through Utilization Review after the beneficiary has been discharged that the inpatient admission was not reasonable and necessary there would be no need to issue the MOON as the patient’s status again remains inpatient. 

This proposed rule requires CMS to develop a standardized form known as the Medicare Outpatient Observation Notice (“MOON”).

CMS is proposing that hospitals and CAHs would be required to use a proposed standard notice (the MOON) for written notification. This standard notice would:

  • Explain that an individual is an outpatient receiving observation services and not an inpatient, and the reason(s) for this patient status.
  • Provide an explanation of implications of receiving observation services as an outpatient, such as implications related to cost-sharing requirements under Medicare and post-hospitalization eligibility for Medicare-covered Skilled Nursing Facility (SNF) care.
  • Include a blank “additional information” section so hospitals and CAHs may add “additional information.”
  • Be in “plain language written for beneficiary comprehension.”

The NOTICE Act sets forth that the written notice must be:

  • Signed by the individual receiving observation services as an outpatient, or
  • Signed by a person acting on the individual’s behalf to acknowledge receipt of the notice, or
  • If the individual or person refused to provide a signature, “the written notification is to be signed by the staff member of the hospital or CAH who presented the written notification and certain information needs to be included with such signature.” The “certain information” to be included is the staff member’s name and title, a certification statement that the notice was presented, and the date and time the notice was presented.

Definition of Observation Services

“Services that are reasonable and necessary, specifically ordered by a physician or other non-physician practitioner authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services, and meet other published Medicare criteria for payment.”

At this point in the proposed rule, CMS makes the distinction that “individuals receiving observation services will always be registered as outpatients; however, not all outpatients receive observation services.”

CMS is set to release single star hospital overall quality ratings soon


More than 74% of the hospitals in the country score less than three stars in this new Five Star Rating system.

Hospital Compare is a consumer-oriented website that provides information on how well hospitals provide care to their patients. This information can help consumers make informed decisions about their health care. In a major step to educate and inform consumers about hospitals’ quality rankings CMS has developed an Overall Hospital Quality Star Rating (Star Rating) that reflects comprehensive quality information about the care provided at our nation’s hospitals. The Star Rating takes 62 existing quality measures already reported on the Hospital Compare website and summarizes them into a unified rating of one to five stars.

Here is a preview of the information CMS has released today:

Healthcare expenses expected to grow faster than GDP during the next decade

In a recent article published in Health Affairs, the authors (Office of the Actuary, Centers for Medicare and Medicaid Services (CMS)) have projected that healthcare expenditure in the United States for the period 2015 to 2025 to grow at an average annual growth rate of 5.8%, which is a full 1.3% higher than the projected GDP growth rate during the same period. The share of healthcare expenditure as a percent of GDP is expected to climb from 17.5% in 2014 to 20.1% in 2025!

As the effects of Affordable Care Act start to subside in the next two years, the key factors contributing to the growth of healthcare expenditure will be economy, growth in medical prices and aging population.

No respite to patients from increasing medical costs




Consumer Price Index (CPI) numbers from June 2016 which were released today show that prices for medical care have started to go up again after a lull for a couple of months. At 0.4% the price for medical care increased twice as much compared to all other items. Prices of hospital services increased by 4.3% compared to June of 2015 while in-patient hospital services prices jumped by 5.1%!

Prices of prescription drugs also increased quite significantly by 4.4% compared to June 2015.

Over the last 12 months, the price of medical care has increased over four times faster than the prices of all other items.

Looks like there is still no respite to patients from ever increasing medical costs.