State Medicaid Payment Reform Strategies Promote Improved Birth Outcomes

Improving birth outcomes, including reducing infant mortality, is a priority for state Medicaid agencies that finance nearly half of all births each year. Three states have proven to be creative and effective laboratories in developing initiatives that use Medicaid payment and delivery reform strategies to lower costs, improve access to postpartum care, reward high-quality care, and reduce unnecessary cesarean sections (C-sections).

On average, C-sections financed by Medicaid cost nearly $5,000 more than vaginal births, and the average payment for maternal and newborn care, including neonatal intensive care unit stays, is about $6,100 higher for C-sections than vaginal births. Oklahoma, Tennessee, and Wisconsin, as highlighted in three case studies, employed payment strategies, performance incentives for providers, and quality improvement initiatives to improve birth outcomes and patient experience while reducing overall health care costs.

Earlier this year, the National Academy for State Health Policy (NASHP), in partnership with the National Institute for Children’s Health Quality (NICHQ), conducted a 50-state environmental scan of Medicaid or Children’s Health Insurance Program (CHIP) strategies designed to improve women’s access to high-quality preventive and perinatal care. The scan revealed a number of innovate state payment or delivery reform initiatives, including the three highlighted in the new case studies:

The Oklahoma Health Care Authority created the Cesarean Section (C-section) Quality Initiative to reduce elective C-sections with no medical indication. The initiative is designed to decrease the primary C-section rate performed without medical necessity to 18 percent or less by ensuring providers and hospitals followed best practices when performing C-sections. As of 2016, Oklahoma had reduced the rate of primary C-sections without medical indication to 15.6 percent, resulting in substantial cost savings to the state. Read the case study.

Tennessee’s Department of Human Services’ Division of TennCare (Medicaid) implemented a perinatal episode of care (EOC) payment strategy as part of its overarching Tennessee Health Care Innovation Initiative (THCII). The perinatal EOC focused on women with low- to medium-risk pregnancies and encompasses care provided during the span of the pregnancy, delivery, and postpartum care. This payment strategy is intended to control costs while focusing on patient-centered, high-value health care for pregnant women by rewarding providers who deliver cost-effective, quality care . As a result, Tennessee’s Medicaid program has experienced a 3.4 percent decrease in medical care costs — a total of $4,719,519 — from calendar year (CY) 2014 to CY 2015. Read the case study.

The Wisconsin Department of Health Services, which administers Wisconsin Medicaid, implemented the Obstetric Medical Home (OBMH) program, which targets high-risk pregnant women to reduce birth disparities through effective, comprehensive, coordinated, and quality maternity care. The goal of the OBMH program is to provide holistic care that addresses all health needs of the pregnant patient through care coordination and home visiting. The OBMH program results indicated an improvement in the rate of postpartum care visits from 61.4 percent in 2013 to 85.5 percent in 2015. Postpartum care has the potential to improve outcomes for women and infants, and support ongoing health and well-being. Read the case study.

Federal initiatives like the Collaborative Improvement and Innovation Network to Reduce Infant Mortality (IM CoIIN), led by NICHQ and supported by the Health Resources and Services Administration’s Maternal and Child Health Bureau help to advance state efforts to prevent and reduce infant mortality and eliminate disparities in birth outcomes. These three states are active members in the IM CoIIN. As the OklahomaTennessee, and Wisconsin, case studies demonstrate, Medicaid payment and delivery reform presents an opportunity for cross-agency collaboration to support shared goals of improving maternal and infant health outcomes and reducing costs.

This blog and related publications are joint products of the National Academy for State Health Policy (NASHP) and the National Institute for Children’s Health Quality (NICHQ). This project is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) (under grant # UF3MC26524, Providing Support for the Collaborative Improvement and Innovation Network (CoIIN) to Reduce Infant Mortality, $2,918,909, no NGO sources).