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Standard Summary
Comprehensive overview in 1-2 paragraphs
The BABIES Act aims to reduce maternity care shortages and improve outcomes by expanding access to freestanding birth centers and by testing new Medicaid payment models for birth center services. It does two major things: (1) provides federal grants to start-up or expand accredited birth centers in underserved areas, with specific use and accountability requirements; and (2) creates a Medicaid demonstration program to explore prospective payment systems and other payment methods for freestanding birth center care for low-risk pregnancies. The bill also includes planning grants for states, a formal process for states to apply and participate, and rigorous reporting to Congress on outcomes and costs. Overall, the bill seeks to make birth center care more available, standardized, and financially sustainable within the Medicaid program, with an emphasis on coordinated care, safety, and data-driven evaluation.
Key Points
- 1Grants to improve access to freestanding birth center services: Establishes a new Strong Start Birth Center Grants program (Sec. 399V-8) under the Public Health Service Act. Eligible birth centers (accredited or pursuing accreditation) can receive grants to cover start-up or expansion costs, including renovations, equipment, and licensure/accreditation activities. Up to 15 centers can receive grants annually from 2026 through 2030, with each grant between $300,000 and $500,000. Special consideration is given to centers in maternity care shortage areas or with poor outcomes, and to those not previously funded.
- 2Medicaid demonstration program to test payment models: Adds a new subsection (cc) to Section 1903 of the Social Security Act to create a demonstration program for freestanding birth center services. The program aims to test more effective payment models to improve access, quality, and scope for low-risk pregnancies paid through Medicaid (state plan or waiver).
- 3Eligibility criteria and requirements for participating birth centers: Within one year, the Secretary must publish participation criteria for freestanding birth centers, including: accreditation status, state licensure, ability to coordinate care across settings (with other clinics and hospitals), capable scope of peripartum care for low-risk pregnancies, required staff and on-site capabilities (e.g., at least two qualified staff per birth), transfer plans to hospitals with obstetric units, data collection/reporting, and commitment to quality improvement and safety.
- 4Prospective payment system guidance: The Secretary will provide guidance to states on establishing a prospective payment system for eligible birth centers. The guidance contemplates diverse payment components (e.g., partial facility payments during labor, separate mother and newborn payments, coverage for pain management supplies, and payment for all professional services involved in birth center care). It also covers inclusive prenatal, labor, delivery, and postpartum care episodes.
- 5State and planning mechanisms: The bill requires an RFP process for states to apply to participate in the demonstration and authorizes planning grants (up to 6 states) to develop proposals, engage stakeholders, and help birth centers meet criteria (including accreditation) to participate.
- 6State demonstration programs: States selected to participate must begin within 2 years, run for 4 years, and receive federal funding tied to the actual expenditures under the established payment system. The program includes waivers of certain health program rules (e.g., statewideness, comparability) as needed to implement the demonstration. The Secretary must publish annual and final reports evaluating clinical outcomes and costs, and make recommendations to Congress about continuation or modification.
- 7Funding and duration: The act authorizes funding for these activities, including $5 million for the grant program (2026–2030) and, separately, planning grants ($3 million in 2027) and demonstration program funding ($6 million annually from 2028–2031). Funds remain available until expended.
- 8Definitions: The bill provides definitions for "freestanding birth center services" and defines a "low-risk pregnancy" as an uncomplicated singleton term pregnancy with vertex presentation and an anticipated uncomplicated birth.
Impact Areas
Primary group/area affected:- Pregnant people seeking birth center care, particularly those with low-risk pregnancies, in underserved or maternity care–desert areas. Freestanding birth centers and their staff (including physicians and midwives) stand to gain expanded access, accreditation support, and clearer payment pathways.Secondary group/area affected:- States and Medicaid programs (State plan and waivers) implementing the demonstration; birth centers seeking accreditation; Federally Qualified Health Centers and rural health clinics involved in care coordination.Additional impacts:- Improved data collection and accountability on birth outcomes, transfer rates, cesarean rates, preterm births, and NICU admissions; potential shifts in costs from traditional hospital maternity services to birth centers, depending on the outcomes of the demonstrations.- Possible federal and state policy changes if the demonstrations show cost savings or improved outcomes, influencing broader adoption of birth-center payment models and care coordination rules.- Emphasis on care coordination, emergency readiness, and quality improvement may raise operational standards for freestanding birth centers.Freestanding birth center: A birth center that operates independently of a hospital, providing maternity care services for low-risk pregnancies.Accreditation: Official recognition by a nationally recognized body that a birth center meets established standards.Prospective payment system (PPS): A payment arrangement where a set amount is paid in advance for a defined set of services, rather than paying for each service separately.Maternity care desert: An area designated as lacking adequate maternity care access.Low-risk pregnancy: A pregnancy with no known risk factors for complications, as defined in the bill (uncomplicated singleton term pregnancy, vertex presentation).
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