Falling MOON Will Impact Hospitalists on March 8

Effective March 8, we have to deliver CMS’ Medicare Outpatient Observation Notice, the MOON, to all Medicare and Medicare Advantage patients hospitalized under observation status for 24 or more hours. This must happen within 36 hours of the observation order, even if eventually changed to inpatient status. A result of the well-intentioned NOTICE Act, the MOON is supposed to clarify when a patient is being observed rather than admitted (SHM has a useful FAQ for background).

The MOON is a flawed document. For those not familiar, the MOON is a CMS-standardized document that hospitals have limited ability to edit. A point of contention for hospitalists, the first section states, “You’re a hospital outpatient receiving observation services. You are not an inpatient because:” followed by a blank field. The second section states, “Being an outpatient may affect what you pay in a hospital.” There are also specific delivery and receipt requirements, which create additional administrative work for providers, despite the fact that hospitalization status is an administrative and billing determination with no clinical relevance.

During the February 28 Open Door Forum held to answer MOON-related questions, CMS representatives dodged definitive answers, but clearly indicated that they expect the initial field to contain personalized, detailed, and understandable-for-laypeople reasons that a patient would be under observation. The representatives refused to provide examples or acknowledge that observation status is not determined by providers.

Also deeply frustrating is the fact that the MOON must be provided to both Medicare and Medicare Advantage beneficiaries. This disregards that Medicare determines status based entirely on an arbitrary time-based determination – the well-established Two-Midnight Rule – while the many Medicare Advantage plans can individually determine status in any manner they see fit, generally focusing on clinical rather than time-based criteria. It is hard to calculate how many patients will be affected, but we know that there were 1.7 million observation claims in 2012, with 700,000 inpatient claims that started with observation days; the recent OIG report on the impact of the Two-Midnight Rule suggests that observation rates may be increasing.

Between the lack of a simple answer as to why a patient must be under observation and the reference to cost issues, one can imagine that hospitalists will be deluged with questions from concerned patients and families, followed by requests for status changes. So now, we will have to discuss vagaries of insurer-driven status determinations rather than relevant clinical problems. As a result, a hospitalist’s ability to build trust with a patient is likely to be negatively impacted and their time dedicated to patient care reduced. And, when informed that we cannot simply make someone an inpatient on request, will patients feel compelled to leave the hospital against advice due to cost concerns?

What can we do as physicians? First, I think that speaking as a group and supporting SHM is important. The Public Policy Committee continues to advocate for meaningful changes in CMS’ observation policies, as well as on other relevant issues.

Second, paying attention to status determination and working cooperatively with your patients will be critical. Because we can’t just make a status what we or a patient want it to be, we will need to be prepared for increased stress on the patient-doctor relationship. This issue impacts patient costs, patient benefits, and hospital workflows and revenues, so there are multiple viewpoints and interests at work.

Patients are sure to be concerned about “what you pay in a hospital,” and that precise number is hard to determine. We must prepare to deal with patients who want to leave against advice or become upset or confused upon receiving the MOON. The best solution for concerns on the wards remains to be open communication and empathy, and working with your patients to ensure they get the best care possible. In the bigger picture, consider contacting your congressional representatives. I routinely tell my patients to do so – or to contact Medicare when they express confusion or frustration with Medicare-related issues.

Only time will tell how the NOTICE Act and the MOON impact patients and physicians – and only rational reform, or better yet, abolishment of observation as a status – will really help anyone.

Bartho Caponi MD, FHM graduated from the University of Illinois at Rockford College of Medicine in 2005 and completed his internal medicine residency at the University of Wisconsin in 2008. He has been practicing hospital medicine at the University of Wisconsin since then, on teaching and non-teaching services. In 2012, Bart became a utilization review advisor, and has since served as UW Health's Medical Director for Case Management and Utilization Review. He has also been a member of SHM's Education Committee since 2013, and a member of the American College of Physician Advisors since 2015.

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