Updated on: November 29, -0001

CMS Dragged Its Feet on MOON, and Hospitals May Pay the Price

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Original story posted on: January 25, 2017

EDITOR’S NOTE: This story was written before President Trump ordered an information lockdown on federal agencies, such as the Centers for Medicare & Medicaid Services, from issuing news releases and using social media to communicate to the public. The president’s decision to impose restrictions on information dissemination was made on Monday, Jan. 23.

As of Monday, Jan. 23, we were 44 days away from the date hospitals are required to start giving out the Medicare Outpatient Observation Notice (MOON). And as we heard on the Centers for Medicare & Medicaid Services (CMS) Open Door Forum call two weeks prior, the agency was planning to release more guidance in “a few weeks” and announce an email address for submitting questions. The CMS subject matter expert who made this announcement then went on to inform listeners that she would not be remaining on the call to take any questions, leaving empty-handed the many people who had called in specifically to hear more details about the MOON.

While Medicare regulations can be complex, especially when dealing with observation and beneficiary rights, it is worth looking at the time frame here. The Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act was passed by Congress and signed by President Obama in August 2015. The Act set a deadline of August 2016 for implementation. In December 2015, CMS held a listening session and allowed callers to ask questions and express concerns, but it was solely a one-way conversation. In April 2016, they released the first iteration of the MOON and solicited comments. This version was roundly criticized from all sides for being both too complex and too incomplete.

A new and much-improved version of the MOON was then released as part of the 2017 Inpatient Prospective Payment Rule, with an extensive discussion held on Aug. 2, and it was sent for approval by the Office of Management and Budget (OMB) five days later. Although CMS expected a prompt turnaround, it was not formally approved until four months later, on Dec. 7,and without a single change. That approval started the 90-day grace period for implementation by all inpatient and critical access hospitals.

That means that last August, CMS had a fairly good idea of what the MOON was going to look like and what hospitals would need to know to use it. Yet when approval was obtained, there was no guidance available. They had four months to prepare guidance and did nothing. It was not until Jan. 20, a full 44 days after OMB approval, that CMS finally gave us a few crumbs of information in Transmittal 3695, an addition to Chapter 30 of the Medicare Claims Processing Manual. Yet there is still nowhere to submit questions.

This transmittal did address some of the things hospitals may not do, such as alter the form to accommodate large logos or address bars, and it did provide more information on how to deliver the form to representatives, with very detailed instructions that actually mention two commercial delivery services (FedEx and UPS).

We still don’t know for certain if we are allowed to use checkboxes in the explanation section, even though many are planning to do so. The instructions mandate that “the specific reason” should be noted. Can one get more specific than the fact that the doctor does not have an expectation of over two midnights of care? There also needs to be an oral explanation provided to patients. How detailed does that explanation need to be? We have to document that the oral explanation was given. Where does that have to be documented? What do we do when Medicare Advantage plans tell us after discharge to bill as observation instead of inpatient? Does that beneficiary need a MOON?

To quote Willy Wonka, there is “so much time and so little to do. Wait a minute. Strike that. Reverse it.” On March 8, there will be real consequences for failing to comply; a patient who is upset at not being admitted as inpatient can call and lodge a complaint, and a hospital can then be surveyed and cited. And the surveyors generally look at everything while they are on site, checking under sinks and looking in offices and cabinets. A hospital I recently visited had to get a special Keurig coffeemaker for their case management office because the store-bought Keurigs do not have a grounding plug. Those surveys could happen on March 8; it’s a set-in-stone deadline for hospitals.

Now of course, I could start reminding readers how unleveled the playing field is; has CMS ever felt any consequences for the three-year backlog in appeals when the requirement is 90 days? When the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) reported recently that CMS did not collect millions of taxpayer dollars in overpayments made to Medicare Advantage plans, was CMS penalized? I know; the world is not fair, so I am not going to dwell on this. It is what it is. We just have to do our best.

On Feb. 2 I am going to take everything we know so far and present a RACmonitor webinar. And attendees will get early access to a video that can be used to explain the MOON to patients. There will be an English and a Spanish version. That alone is worth the price of admission. So please consider signing up, and bring your questions.

Ronald Hirsch, MD, FACP, CHCQM

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at R1 Physician Advisory Services. 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 Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays.

The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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