Beginning in January 2027, maternity care billing in the United States will transition from bundled payments to fee-for-service codes, a shift that could increase out-of-pocket costs for patients and raise insurance premiums, while gaining support from obstetricians for better care tracking.
What happened
The American College of Obstetricians & Gynecologists (ACOG) and the American Medical Association (AMA) have developed new billing codes for maternity care that replace the current global bundled payment system with more detailed, à la carte fee-for-service codes. This change aims to accurately reflect the complexity and variety of care modern obstetricians provide, including varied numbers of prenatal visits, labor and delivery services, and postpartum care.
Under the existing bundled codes, obstetricians receive a single payment covering a set number of prenatal visits (generally 13) and a uniform fee for any delivery regardless of complexity. The new codes will enable billing for specific visits and services based on patient needs, including care from hospitalists, midwives, and maternal-fetal medicine specialists.
While physicians advocate that the new coding system improves care customization and compensates providers fairly, patient advocates and employers express concerns that a return to fee-for-service could increase costs for those with commercial and high-deductible insurance plans. Insurance groups also warn that the rapid implementation requires substantial operational adjustments.
The Centers for Medicare & Medicaid Services (CMS) is currently reviewing the new codes for inclusion in the 2027 fee schedule, with a final decision expected in July. Federal law mandates that most health plans cover key maternity services as preventive care at no cost, but patients often pay for additional services such as ultrasounds and specialist consultations. The new billing structure may increase itemized charges, potentially translating into higher patient expenses and premiums.
Why it matters
Childbirth is one of the most common and costly medical events in the U.S., with families paying an average of $2,743 out of pocket under employer insurance. The growing number of patients with complex health needs highlights the need for more flexible maternity care billing. However, changes could have significant financial repercussions for patients, especially those with high-deductible plans, and may affect insurance premium trends.
The detailed reporting enabled by the new codes is expected to facilitate better evaluation of maternity care outcomes, especially postpartum care, which is critical for addressing issues like maternal mortality and complications after birth. Extended postpartum coverage, increasingly recognized and expanded at the state Medicaid level, could be better supported with fee-for-service payments.
On the downside, experts caution fee-for-service models may incentivize more frequent visits and costly procedures, which could drive up overall healthcare spending without necessarily improving outcomes.
Background
Bundled payments for maternity care were introduced to lower costs and improve quality by consolidating services into a single payment. Despite these intentions, key outcomes such as Cesarean delivery rates have not significantly changed.
The shift towards individualized billing comes amid increasing medical complexity among pregnant patients, with providers seeking reimbursement models that align with current clinical practice. The AMA develops Current Procedural Terminology (CPT) codes that standardize medical billing, while CMS oversees payment rates and reimbursement policies for public and private insurers.
Approximately 41% of U.S. births are covered by Medicaid, which generally shields low-income families from increased out-of-pocket costs. The new billing approach will primarily impact those with commercial insurance plans.
Sources
This article is based on reporting and publicly available information from the following source:
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