General Question for the Week of May 9, 2016

General Compliance Question of the Week


Can you provide information related to the notice that must be given now to observation bed patients? 


Enacted August 6, 2015, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) requires hospitals and critical access hospitals (CAHs) to notify individuals who are receiving observation services as outpatients for more than 24 hours.  

Hospitals and CAHs would be required to furnish a new CMS-developed standardized notice, the Medicare Outpatient Observation Notice (MOON), to these individuals no later than 36 hours after observation services are initiated. One goal of the notice is to provide the implications of observation services on cost-sharing and post-hospitalization eligibility for Medicare coverage of skilled nursing facility (SNF) services. 

Ideally, says CMS, when the notice is provided to the patient, an oral explanation must be provided, and his or her signature must be obtained. If extenuating circumstances prevent this, an individual qualified to act on the patient’s behalf must acknowledge receipt and understanding of the notice. When the patient or representative refuses to sign the notice, a staff member of the hospital or CAH providing the notice may sign it.

More information can be found in the proposed inpatient prospective payment system (IPPS) rule at

Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.