SouthernWorldwide.com – A significant shift in medical billing for maternity care is set to take effect in January, potentially leading to increased costs for expectant parents in the United States.
The new billing codes, which will replace the current bundled payment system for pregnancy, childbirth, and postpartum services, will allow doctors to charge individually for each visit and service rendered. This move, strongly advocated by the American College of Obstetricians & Gynecologists (ACOG), aims to more accurately reflect the complex and varied care now provided to expectant mothers.
ACOG argues that the previous bundled system, which often set a fixed number of prenatal visits, did not adequately account for the diverse needs of modern pregnancies. With patients often older and managing more complex medical or social conditions, a more granular billing approach is seen as necessary to capture the full scope of care, including remote consultations and specialized treatments.
Dr. Lisa Hofler, chair of Obstetrics and Gynecology at the University of New Mexico and a member of the ACOG committee that developed the new codes, explained that the current system uses an arbitrary number of prenatal visits, which may not suit all patients. The new fee-for-service codes will allow for more personalized care plans, accommodating more or fewer visits as needed.
Similarly, under the existing bundled system, the complexity or duration of labor and delivery did not influence the overall payment. The new codes are designed to better compensate the growing number of medical professionals involved in maternity care, such as hospitalists, midwives, and maternal-fetal medicine specialists, for their specific contributions.
However, concerns are being raised by patient advocates and employers about the potential financial implications for patients, particularly those with high-deductible health plans. Laurie Zephyrin, senior vice president at The Commonwealth Fund, highlighted that an increase in individual line items on bills could translate to higher out-of-pocket expenses for patients with commercial or high-deductible plans.
The ultimate impact on patient costs will depend on how insurance companies implement these new codes. Representatives from the insurance industry, such as Chris Bond from AHIP, have expressed concerns about the tight implementation timeline, noting that it will necessitate substantial operational adjustments to manage and reimburse maternity services under the restructured AMA codes.
The U.S. healthcare system relies on standardized codes for billing, with the Current Procedural Terminology (CPT) codes, maintained by the American Medical Association (AMA), being central to this process. These codes are reviewed by the Centers for Medicare & Medicaid Services (CMS), which sets reimbursement rates based on a fee schedule updated annually.
Barbara Levy, vice chair of the AMA’s CPT Editorial Panel, indicated that while CMS officials were involved as observers during the code development, their final decision on adopting the proposed changes for reimbursement is still pending. The AMA is actively educating healthcare providers and payers about the new coding structure in the interim.
Federal regulations, such as the Affordable Care Act (ACA), mandate that most health plans cover essential maternity care as preventive services at no cost to members. This includes prenatal and postpartum visits, as well as screenings for conditions like diabetes, anxiety, and HIV. However, this coverage does not extend to all services.
Patients often incur additional costs for services like ultrasounds, specialist consultations, and laboratory work. They are also typically responsible for their portion of professional fees for labor and delivery, separate from hospital charges.
The shift back towards a fee-for-service model for maternity care has raised concerns among health policy experts. This payment structure, where providers are compensated for each service rendered, has historically been criticized for potentially incentivizing the provision of more numerous and costly services, rather than focusing on health outcomes.
One of the motivations behind the move towards bundled payments in recent years was the hope of reducing costs and improving quality, including a decrease in C-section rates, which are significantly more expensive than vaginal births. However, bundled payments have not demonstrably reduced the C-section rate in the U.S., which remains around 30%.
Caitlin Donovan, a senior director at the Patient Advocate Foundation, expressed apprehension about the return to a fragmented fee-for-service system, stating that it could further complicate an already complex healthcare landscape. She shared a personal experience where, at age 35, she was advised to undergo weekly ultrasounds during her pregnancy, which she suspected was driven by financial motives rather than medical necessity.
ACOG spokesperson Jamila Vernon clarified that while a detailed first-trimester ultrasound is recommended for older pregnant patients or those with risk factors, subsequent ultrasounds are determined by individual findings and risk factors, not a set number for all patients.
With approximately 3.6 million births annually in the U.S., childbirth is a common medical event. However, it is also costly. Data from 2021-2023 indicates that families with employer-sponsored insurance pay an average of $2,743 for childbirth.
Medicaid covers about 41% of births in the U.S. For families relying on Medicaid, the new billing system is unlikely to have a financial impact, as they generally do not face out-of-pocket costs for maternity care.
ACOG’s primary objective with the new coding system is to enhance the quality of maternity care, particularly in the postpartum period. The bundled payment system made it difficult for researchers to track specific services and their impact on maternal mortality rates, an area where the U.S. significantly lags behind other high-income countries.
The extended postpartum coverage now offered by 48 states and Washington D.C., providing a full year of Medicaid coverage after childbirth, is an area where the new codes are expected to be beneficial. Physicians will be compensated for providing more comprehensive postpartum care beyond the two visits previously recommended under bundled coding.
Kay Johnson, a Medicaid and maternal-child health expert, emphasized the importance of monitoring various postpartum health issues, such as depression, substance use, the resolution of gestational diabetes, and cardiac changes. She believes the new codes will facilitate ongoing care and provide a mechanism for financing it.
Representatives for employers, while acknowledging ACOG’s rationale, remain concerned about potential cost increases. Jeff Levin-Scherz, a population health leader at WTW, suggested that obstetricians might be underpaid and that the new codes could lead to increased billing due to higher visit intensity. Even if patients are not directly billed for these increased services, higher overall costs for plans could lead to increased insurance premiums.
Magda Rusinowski, vice president of the Business Group on Health, expressed concern that the new fee-for-service model might encourage the use of more tests and higher-cost providers, potentially overshadowing services like doulas. She noted that fee-for-service structures in healthcare generally incentivize more procedures and more expensive interventions.
Despite these concerns, Rusinowski acknowledged that it is still early to fully gauge the impact, and many in the industry are actively analyzing how these changes will unfold.
