News & Commentary

Difficult Birth For Maternity Bundles


It would seem that bundling payments for maternity care would be a no-brainer, but there are significant hurdles, according to a white paper by the Health Care Payment Learning and Action Network, a collaborative effort that includes payers, providers, employers, and states, under the sponsorship of the federal government.

Bundling could lead to savings. Childbirth accounts for roughly a quarter of all hospitalizations and about $64 billion in payments to hospitals.

Volume and cost of maternity care
Commercial market Medicaid
Volume (2013) 2,012,584 births (48.99%) 1,811,759 births (44.10%)*
Vaginal $18,329 $9,131
Cesarean $27,866 $13,590
*The remaining births were covered by Medicare or other payers, or the mother was uninsured
Source: Mitre Corporation, “Accelerating and Aligning Clinical Episode Payment Models,” 2016

“Fortunately, Medicaid (which pays for approximately 45% of births annually), commercial payers, and large purchasers have begun to develop episode payment initiatives for maternity care in recognition of the ways in which episode payment can drive higher quality, lower-cost care,” said the white paper.

Because Medicaid is administered by the states, broadly mandating maternal bundled payments across the country is difficult, if not impossible. There’s also the question about which services and care should the bundle payment include.

There are three general bundling models, comprehensive, comprehensive birth center/midwife, and blended rate for hospital labor and birth, according to the white paper.

Comprehensive defines the episode as prenatal, labor and birth, and postpartum for the woman and, sometimes, for the newborn. “It is agnostic as to both the birth site and who manages the birth, and as to whether the birth is vaginal or a cesarean, but it is typically priced assuming a hospital birth,” the white paper stated.

A comprehensive birth center/midwife bundle is similar to comprehensive, but it’s priced based on midwife management.

The blended rate combines cesarean and vaginal birth reimbursement rates into a blended case for hospitals, with the goal of decreasing cesarean rates. Hospital payments and the clinical professional fees are the same in this model, regardless of the delivery method. The episode price also includes the costs of postpartum complications but not other postpartum costs.

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