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As the end of 2016 approaches, I will be looking back at the week of Dec. 7-11 as one of the most eventful weeks of the year.

In that short time, I aged about 10 years trying to keep up with the constantly changing Medicare Outpatient Observation Notice (MOON) saga. And for those of you who read the RACmonitor eNews that was sent out during that time, you will recall that I had a conspiracy theory for every step along the way.

Since Oct. 1, when we expected approval of the notice by the Office of Management and Budget (OMB), I had been checking daily for any indication of action on its part. The first change was when OMB posted a notice of MOON preapproval on Dec. 2.

At that point it seemed that an announcement from the Centers for Medicare & Medicaid Services (CMS) was imminent. And it only figures that CMS would post its announcement and the form on Dec. 6, while I was doing sun salutations in my yoga class. But the American Hospital Association (AHA) didn’t miss it, and it promptly sent out an electronic notice. But then, inexplicably, CMS took its announcement down a few minutes later, and the intrigue began.

The next day, Dec. 7, OMB changed the preapproval to “approved without changes.” Was that a factor? Did CMS pull the trigger too fast? What else could it have been? Well, in the 2017 Inpatient Prospective Payment Final Rule, CMS had promised manual instructions, and those were not available, so maybe they wanted to wait for those. But then, on Dec. 8, CMS posted the MOON and the announcement once again. And the only thing different was the presence of the Spanish version. Such a simple explanation.

Well, now we have an approved form and a deadline, so it’s time to get rolling, right? If only it was that easy. There are two looming uncertainties. First, we are required to indicate why each patient is not being admitted as an inpatient. The only guidance is that this reason be specific. It seems that not meeting the two-midnight expectation is very specific, because it is the actual reason. In fact, it was good enough for CMS in the first version of the MOON that was released for public comment. But in Friday’s report on Medicare compliance from Nina Youngstrom, she notes that she spoke with a compliance officer who stated that he thinks CMS wants a clinical reason written on the form.

I disagree, as does Mary Beth Pace from Trinity Health, who has written about this for RACmonitor. We think check-box reasons related to the two-midnight rule are fine. But as with any use of check boxes, adding an option for “other” that allows free text always makes sense.

The other issue is the verbal notification. Once again, we have no idea what CMS expects. The rule only stated that staff be available to provide an explanation and answer questions. So once again, Mary Beth and I feel that a registration clerk can give the form with a simple explanation and then have someone available if there are questions. Unlike what the compliance officer mentioned previously, we do not think a clinical voice is required. Case managers are in short supply at most hospitals, and are usually overloaded with a multitude of ongoing tasks. They are also relatively highly compensated. It would be unreasonable to expect there to be a case manager available in the emergency department at all times for the MOON, especially considering the fact that many patients will have no questions at all. And since the form is not required until 24 hours of observation services have elapsed, if a patient in the ED does have a question, the form presentation and signature can be deferred to the time when a case manager is available.

So clearly, there are varying interpretations. It kind of sounds like the debate over what constitutes medical necessity for hospital care, as there is ample ambiguity and no definitive guidance from CMS. As noted above, CMS has promised more guidance, but the clock is ticking. Hospitals only have until March 8, 2017 to fully implement or they risk a citation by a surveyor if their processes are deemed insufficient.

As with many reports here on RACmonitor, we expect to know more in 2017, so be sure to keep reading and listening to Monitor Mondays.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, 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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