Having a baby in America is already a financial nightmare. It is about to get worse. Starting in January, the medical billing machine is tossing out the old playbook. Instead of charging one flat “bundled” rate for pregnancy, delivery, and postpartum care, doctors are going à la carte. Every visit, every checkup, every minor service will have its own price tag.
OB-GYNs are thrilled. They have lobbied for this for years. Patient advocates and employers? Not so much. They smell a cash grab.
The American College of Obstetricians and Gynecologists (ACOG) claims the old system is outdated. Patients are older now. They are sicker. They have complicated medical needs that require a small army of specialists. The old bundle assumed a neat, arbitrary package of 13 prenatal visits. But pregnancy is rarely neat.
“It doesn’t fit everyone,” says Dr. Lisa Hofler of the University of New Mexico, who helped design the new codes with the American Medical Association. Under the old rules, a grueling, multi-day labor billed the same as a quick, uncomplicated delivery. One code covered it all.
The new system fixes that. It lets hospitalists, midwives, and high-risk specialists bill for exactly what they do. But for the average patient—especially those trapped in high-deductible health plans—this precision comes with a steep price.
More line items mean more bills. “The cost piece is critical,” warns Dr. Laurie Zephyrin of The Commonwealth Fund. Will insurers absorb these new charges, or will they pass the buck to families? It depends on how greedy the insurance companies want to be.
Insurers are already whining about the timeline. Chris Bond, representing the insurance lobby group AHIP, called the rollout “rushed.” He warns it will fundamentally disrupt how maternity care is managed.
Right now, the federal government is reviewing the new codes. The Centers for Medicare & Medicaid Services (CMS) will drop its proposed fee schedule in July. No one knows if they will actually approve the changes. But the AMA is already training doctors on how to use them.
Sure, the Affordable Care Act protects some things. Basic preventive care—like standard prenatal visits and diabetes screenings—must be covered at no cost. But the “bundle” never covered everything. Parents already pay out-of-pocket for ultrasounds, lab work, and hospital delivery fees.
Going back to fee-for-service billing is a massive red flag for health policy experts. When doctors get paid per service, they have a financial incentive to do more. More tests. More procedures. More bills. The industry originally pushed bundled payments to stop this exact behavior, hoping to lower the U.S.’s staggering 30% C-section rate. It failed. C-section rates did not budge.
“I always worry about piecemealing,” says Caitlin Donovan of the Patient Advocate Foundation. She remembers her own pregnancy at age 35. Her doctor insisted on weekly ultrasounds after week 20, claiming she was “geriatric.” There was no medical reason for it. It was just a lucrative cash grab.
Childbirth is the most common medical event in the country, with 3.6 million babies born annually. It is also incredibly expensive. Even with employer-sponsored insurance, families pay an average of $2,743 out of pocket.
Low-income families on Medicaid—which covers 41% of U.S. births—will not feel the sting. They do not pay out-of-pocket costs.
ACOG argues the new codes will actually improve care, especially after the baby arrives. Under the old bundle, postpartum care was a black box. Nobody knew what services patients actually received. That made it impossible to study why the U.S. has such abysmal maternal mortality rates compared to other wealthy nations.
Postpartum care is critical. With 48 states now extending Medicaid coverage to a full year postpartum, doctors can finally get paid to monitor new mothers for depression, diabetes, and heart issues over the long haul. “You have a way to finance it,” says maternal health expert Kay Johnson.
But employers, who foot the bill for private insurance, are bracing for impact. Jeff Levin-Scherz, a health consultant at WTW, admits obstetricians might be underpaid. But he warns that more codes mean higher billing intensity. Even if prenatal visits are technically “free” to the patient, employers will face higher costs. And those costs will eventually trickle down to employees in the form of higher premiums.
Magda Rusinowski of the Business Group on Health agrees. Fee-for-service systems always incentivize more expensive tests and higher-level providers over cheaper, effective alternatives like doulas.
For now, the industry is waiting to see how the chips fall. But for expectant parents, the message is clear: get ready to read the fine print on your next medical bill.
