Yes.
For simplicity, we set $M_1=M \times \{-2\}, M_2=M \times \{0\},N_1=N \times \{0\}$ and $N_2=N \times \{1\}$ such that $N_1$ is contained in $M \times (-2,0)$. Moreover, we denote the region bounded by $M_1$ and $N_2$ by $\Omega$.
There is a natural projection from $\Omega \to M_1$ and the induced map $\pi_1(\Omega) \to \pi_1(M_1)$ is surjective. We claim that this map is also injective. Indeed, this follows from the fact that $\Omega$ has a deformation retraction to the region bounded by $M_1$ and $N_1$ and the latter is contained in $M \times [-2,0]$, which is contained in $\Omega$.
Therefore, the inclusion $M_1 \to \Omega$ induces an isomorphism between fundamental groups. By the same reason, it also induces isomorphism between higher homotopy groups. In other words, $M_1$ is homotopic to $\Omega$.
So far, all arguments apply to general dimensions. If the dimension is 2, one can prove $\Omega$ is homeomorphic to $M_1 \times [0,1]$ from Hempel's book Theorem 10.2. In particular, $N$ is homeomorphic to $M$.