Opinion: New billing codes likely to raise maternity care costs

OpinionFirst Opinion New billing codes likely to raise maternity care costs Employers and Medicaid will bear the brunt of the changes Manage alerts for this article Email this article Share this article By Jeff Levin-ScherzJuly 23, 2026 Levin-Scherz is a senior managing director and population health leader of the North American health and benefits practice at WTW. He is an assistant professor at Harvard Medical School and the Harvard T.H. Chan School of Public Health. The approach to paying obstetricians and midwives is changing. These changes will likely raise the cost of childbirth, with no guarantee of better maternity outcomes. The American Medical Association (AMA), at the recommendation of the American College of Obstetrics and Gynecology, will eliminate the global payment codes for deliveries used by obstetricians and midwives at the end of this year. The AMA will replace these global fees, where health plans paid for professional services based on a single bill after delivery, with fee-for-service, or pay-as-you-go, codes for prenatal and postpartum visits, fetal monitoring, and various procedures.Advertisement Professional global maternity codes were instituted in the 1990s, and it’s hard to argue that they have led to vast improvements in maternity care. During this time, cesarean section rates have increased from 22.9% in 2000 to 32.5% from in 2025. U.S. maternity mortality rates and severe maternal morbidity rates are the highest among wealthy nations. Earlier prenatal visits are associated with better pregnancy outcomes, but global billing codes don’t capture the timing of prenatal visits. Counterpoint Good riddance to bundled ‘global’ maternal care billing Read the essay Obstetricians and midwives have long been anxious to update their reimbursement methodology. Waiting until after delivery to get paid for their services creates a serious cash flow concern, and some have complained of difficulty dividing up the global payment between providers. The current billing system does not provide for additional payments for medically complex pregnancies, which are more likely to require interventions and require additional expertise. The average risk profile of pregnant women in the U.S. has worsened as more women delay pregnancy and obesity rates have risen. But these flaws could have been fixed without eliminating a global fee. Obstetricians and midwives could have been paid earlier for prenatal care, and global fees could have incorporated complexity. Innovations such as doula care, blood tests to project risk of preeclampsia, and biometric tests to predict labor were already billed separately. This change will facilitate improved claims-based reporting, but researchers can use electronic medical records to assess appropriateness of care.Advertisement The Centers for Medicare and Medicaid Services will release the relative payment for each of the new and revised codes this summer. The AMA says this change will be cost-neutral, but the impact will depend on assumptions that the AMA’s update committee made about whether the fee-for-service payment will lead to more utilization or higher billing intensity for maternity services. There is every reason to believe that this change will result in cost increases for employer-sponsored health plans and Medicaid programs, each of which pay for about half of all deliveries. The global professional fee will end on Dec. 31, but providers will begin billing prenatal visits using office codes for deliveries in 2027 starting in mid-2026. Actuaries did not include these costs when developing calendar 2026 budgets, so plan sponsors will incur unexpected claims during this calendar year. Prenatal visits will be billed using office visit codes, which can vary in intensity from level 2 to level 5. In most health plans, level 5 office visits pay about twice as much as level 3 visits. Providers will likely use artificial intelligence to justify billing for higher intensity prenatal visits. Prenatal and postpartum visits will be associated with a site of service. This could allow expensive facility charges for visits performed in offices of professionals employed by hospitals, moving in a direction contrary to efforts to implement site-neutral payments. Many procedures including induction and fetal monitoring have historically been bundled into the global professional fee. Separate fees for various interventions could lead to an increase in medically questionable procedures. Even if procedure volume remains unchanged, delivery costs could rise if the AMA’s committee underestimated how frequently these services were performed when bundled into the global fee. Maternity care represents the largest driver of hospital admissions for many employers, especially those with younger populations. The average delivery cost in the U.S. was $15,712 for vaginal deliveries and $28,998 for cesarean section deliveries in 2021-2023. Most of the additional cost of this maternity unbundling will fall on employers, as women tend to meet their annual out-of-pocket maximum in the year that they give birth. The average out-of-pocket cost of childbirth is $2,743, already a significant financial challenge for young families. Prenatal and postpartum visits are covered as preventive care without cost sharing, although any incremental procedures done in the calendar year before delivery could increase out-of-pocket patient expenses. Professional fees generally represent only about one-fifth of total maternity costs, so this change is likely to lead to only modest increases in total medical expenses. However, it coincides with many other factors raising health insurance premiums, including overall inflation, labor costs, pharmaceutical innovation, and provider consolidation. Health policy experts have often suggested that alternative payment models, including bundled payments, can help improve the quality of care and constrain cost increases. They have pointed out that fee-for-service payments encourage overutilization and increased billing intensity. However, health policy experts have been largely absent in the conversation around the elimination of global professional billing for maternity care.Advertisement The AMA is delegated by CMS to determine billing codes and definitions, and this decision cannot be easily overturned. But employers that sponsor health insurance plans can act to be ready for these changes. They can query their insurance companies to be sure that they are able to pay using the new codes. Understanding claim adjudication readiness is important to prevent claim backlogs and increase in incurred-but-not-reported amounts. Employers can request reporting from health plan carriers and administrators to assess the impact of this billing change on utilization and total costs. Further, employers should be sure that their plan actuaries have incorporated the potential impact of these billing changes into their 2027 health plan premium rates. Employers also might consider communicating new billing methods to plan members, although the financial impacts to plan members are likely to be small. In the meantime, maternity care outcomes in the U.S. continue to be worse than in other developed countries that spend much less on health care. There is enormous opportunity for employers and Medicaid plans to improve maternity quality and outcomes. Employers and health plans should evaluate newly available claims data to assess timing and adequacy of prenatal visits, postpartum visits, and appropriate vaccination both before and during pregnancy to protect the mother and her newborn. They should also assess whether this new payment methodology leads to an increase in medical interventions which will increase costs and could lead to even higher rates of cesarean sections in low-risk pregnancies. American mothers continue to die and suffer from severe maternity complications at rates that would be unacceptable in any peer nation. Employers, health plans, and Medicaid programs should use this moment of reimbursement transition to reinforce their commitment to evidence-based interventions that have been shown to improve outcomes, including earlier prenatal care, doula access, recommended vaccinations, mental health support, and perinatal collaboratives. The billing system is changing — the standard of care must rise with it.Advertisement Jeff Levin-Scherz, M.D., M.B.A., is a senior managing director and population health leader of the North American health and benefits practice at WTW. He is an assistant professor at Harvard Medical School and the Harvard T.H. Chan School of Public Health. He writes the Substack Employer Coverage. Letter to the editor Have an opinion on this essay? 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