The blog of the Urban Institute
April 10, 2020

Enhanced Medicaid Support for Out-of-Hospital Births Could Protect Moms and Babies and Reduce Hospital Strain

April 10, 2020

Keeping healthy people out of the hospital is a high priority as the nation attempts to reduce strain on hospital resources and minimize exposure to COVID-19.

Minimizing COVID-19 exposure for pregnant women and newborns is of particular concern, given that the vast majority of births happen in hospitals. Also, in response to the pandemic, many hospitals are changing their labor and delivery policies to discharge women more quickly after delivery and to restrict partners, doulas, or other family members from being present during labor and delivery and after the birth.

Although out-of-hospital births have increased slightly in recent years, most women in the United States continue to opt for a hospital birth. Recent news reports and the American Association of Birth Centers (AABC), however, indicate many are currently reconsidering their options given the risks of COVID-19 and their concerns that they may have to experience labor alone, without critical social support.

Safe, out-of-hospital birthing options do exist for low-risk births, but many women currently lack access to these alternative options, such as birth centers and home births attended by midwives.

Medicaid doesn’t always cover out-of-hospital births

Medicaid is a dominant payer of births in the United States, covering more than 40 percent of births nationwide (PDF) and more than 60 percent of births in several states. These rates are likely to increase in the coming weeks and months as many newly unemployed women become eligible for pregnancy-related Medicaid coverage.

Although birth center reimbursement is required under the Affordable Care Act, the Urban Institute’s recent evaluation of the Strong Start for Mothers and Newborns initiative (PDF) found birth center providers struggle to successfully participate in Medicaid. They often have difficulty obtaining contracts with Medicaid-managed care organizations, and even when they succeed, reimbursement rates are often too low to cover the actual cost of care.

On the fee-for-service side, birth center reimbursement for professional and facility fees are a fraction of what the program pays obstetricians and hospitals. These factors cause many birth centers to limit the number of Medicaid beneficiaries they serve.

Additionally, Medicaid can cover licensed professional midwives (LPMs)—the predominant home birth attendants—but a limited number of states have chosen to cover home births. And in some states that do cover home births, stricter regulations limit access by requiring certified nurse midwives to attend even very low–risk births.

How policymakers can expand access to out-of-hospital birth options

The AABC has indicated that birth centers across the nation are accepting late transfers and working to ramp up capacity to accommodate growing demand for out-of-hospital births. In addition, home birthing options for women with low-risk pregnancies rely only on staff capacity and can potentially be more flexible than birth centers if women meet the criteria for a home birth. But without further Medicaid policy and payment changes, out-of-hospital birth options will remain inaccessible to many pregnant Medicaid beneficiaries.

To rapidly expand access to birth centers and home birthing options for women enrolled in Medicaid—at least during the pandemic—state Medicaid programs could take the following actions:

  • Individual state Medicaid agencies could immediately improve reimbursement rates for midwifery care and birth center facility payments.
  • Medicaid-managed care plans could quickly expand their networks to including freestanding birth centers.
  • The (at least) 20 state Medicaid agencies that do not currently cover home births could immediately expand benefits to include coverage to midwives who attend home births, particularly LPMs.

The Centers for Medicare & Medicaid Services can support these actions by providing guidance and related resources to states to enable them to quickly take these steps to limit COVID-19 exposure of pregnant women and their infants.

Improving access to out-of-hospital birth alternatives could help keep pregnant women and their newborns healthy—maintaining their safety and relieving some strain on the health care system during the coronavirus pandemic. It could also provide valuable policy guidance and experience for more permanent policy changes once the pandemic subsides.

Ashley Esposito, who is pregnant with her first child due in July, stands outside her home in Baltimore, Maryland, April 6, 2020. There is a rising demand for home birth in the US because of the coronavirus pandemic, even if the procedure is costly and "out of network" for most of them. Meanwhile midwifes are swamped and trying to adapt to this wave of patients. (Photo by SAUL LOEB/AFP via Getty Images)

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