By Lara Anderson
This month marks the beginning of the Medicare
Outpatient Observation Notice (MOON). The MOON is a standardized notice used to
inform Medicare beneficiaries if they are staying in the hospital under
observation status and are not formally admitted as inpatients in the hospital.
Most people assume that if they spend the night
in the hospital, they have been admitted as inpatients, but this can create
costly misunderstandings with financial consequences for Medicare patients.
The new law is intended to protect Medicare
beneficiaries and requires hospitals to explain the MOON to individuals who
receive observation services for more than 24 hours without being formally
admitted. The patient or patient’s representative must acknowledge receiving
the form by confirming with a signature. According to the Centers for Medicare & Medicaid Services, the MOON will inform more than one million Medicare beneficiaries
every year of the reasons they are considered outpatients under observation and
the potential out-of-pocket costs associated with this status.
Hospitals are cautious about formally admitting
patients because Medicare auditors can financially penalize them for inappropriate
admissions. Private companies hired by the government to review Medicare claims
often question decisions by doctors to formally admit patients to a hospital.
For individuals with Original Medicare,
outpatient status is covered under Part B, which may not offer coverage as
complete as Part A hospital benefits. When spending time in the hospital as an
outpatient, the 20% deductible patients need to pay under Part B can quickly
add up. Medigap policies can help pay the gaps in Part B coverage, but patients
often haven’t purchased this additional protection.
Also, Original Medicare (Parts A and B) will
not pay for a skilled nursing facility or non-custodial nursing home care after
a hospital stay if a patient was not admitted to the hospital for three
midnights as an inpatient. Instead, the costs would have to be paid solely by
the patient. An incident like this can have enormous financial consequences for
someone at such a vulnerable stage in life. See relevant stories in The New York Times and NBC here.
There are protections in place for Medicare
beneficiaries, and doctors are often very supportive of ensuring their patients
are covered. If a patient disagrees with the observation status, the individual
can request that the doctor change the status if the patient meets hospital admission
criteria. Another option is to ask his or her own doctor to contact the
treating physicians in the hospital to try to get the status changed.
If the status is not changed, a patient may
follow the appeal process outlined in the Medicare Summary Notice received
after the hospital stay. I called the Centers for Medicare and Medicaid
Services and was informed that patients do have the right to appeal any
Medicare coverage determinations. And while this action is not a guarantee a hospital
stay will be billed as inpatient care, at least there is a chance when appealed.
This new law is an important step in clarifying Medicare rules for patients in an effort to protect their financial well being and provide the best treatment for their individual needs. I look forward to writing a follow-up article that will review the MOON’s effect on Medicare patients, and the impact it has had on hospitals and the Medicare system.