Beware of the MOON

Beware the MOON

By Carl A. Glad, Esq.

Partner Law Offices of Kurt M. Ahlberg

Next month Medicare beneficiaries will become aware of the MOON.  Starting in March all hospitals will be required to notify Medicare beneficiaries of their patient status and the consequences of that status.  This process is known as the Medicare Outpatient Observation Notice or MOON.  The MOON will be provided to Medicare beneficiaries that have received 24 hours of care in a hospital in either an outpatient or observation status.

Currently, a hospital may classify a Medicare beneficiary’s status as either inpatient, outpatient, or observation.  This status can have a serious financial impact on the beneficiary.  Due to cost cutting and audits, hospitals are more frequently classifying patients in an outpatient or observation status.  In fact, from 2006 to 2014 the number of treatment days classified as outpatient or observation more than doubled.  More simply, Medicare beneficiaries are arriving at hospitals, including the emergency room, and receive treatment without being fully admitted as an inpatient.  Outpatient care is paid through Medicare Part B.  Medicare Part B generally covers only 80 percent of the costs of treatment.  Additionally, some medications including those that are self-administered are not covered while in an outpatient or observation status.  Most concerning, when a Medicare beneficiary is in an outpatient status they will not qualify to receive Medicare coverage for 100 days at a skilled nursing facility after discharge from the hospital regardless of whether they need to be admitted to a nursing facility. 

The updated MOON will require both a written and verbal explanation to the Medicare beneficiary of their status and the financial impact of that status.  This is a step in the right direction but, unfortunately, many individuals are too overwhelmed by their medical needs to fully understand the long-term impact of this notice.  That is why it is crucial to have a Health Care Representative that actively follows your treatment and communicates with your doctors.  It is also important to notify friends, family and your primary care physician that you have been hospitalized.

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Jay Jaser's picture

Hi Carl, This is a great blog addressing a significant problem for many seniors.
Linda Ziac's picture

Carl - I just read your article on the MOON, which I appreciate you posting. I did a talk last week for an AARP chapter, and out of the 97 people in the audience, only 7 people said they had heard of observation status. In addition, of these 7 people, only 2 people understood what observation status is, and the potential impact that observation can have on a person's healthcare and finances.