S 2059119th CongressIn Committee

Keeping Obstetrics Local Act

Introduced: Jun 12, 2025

Healthcare

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Keeping Obstetrics Local Act is a comprehensive bill aimed at strengthening financial support for rural and safety-net hospitals that provide maternity and delivery services, expanding maternal-health coverage, investing in the obstetric workforce, and improving public transparency around obstetric care and hospital unit closures. It would increase federal support for Medicaid and CHIP expenditures tied to maternity services (including a new funding structure for low-volume hospitals), require States to study costs of maternity care, expand 12-month continuous coverage for pregnant people, and create new reporting and data-collection requirements. The overall goal is to keep obstetric care local and sustainable in communities that rely on small or rural hospitals while broadening access to maternal health services. Key elements include: higher or guaranteed federal financing for maternity services in eligible hospitals; a defined “anchor” payment system to stabilize low-volume obstetric hospitals; expanded Medicaid/CHIP coverage for pregnant individuals; new workforce and cross-border provider enrollment provisions; and new requirements for timely communication of obstetric data and potential hospital unit closures.

Key Points

1State cost studies and HHS reporting on maternity care costs (Sec. 101)
2- States must study the true costs of providing maternity, labor, and delivery services in applicable hospitals and report findings to HHS every 5 years, with interim provisions to help small or rural hospitals gather data. The study covers costs, current payments, geographic/demographic factors, and how current rates compare with Medicare and private payers.
3- The Secretary must publish a national synthesis and recommendations within 3 years, focusing on improving data collection.
4Adequate payment rates under Medicaid for maternity, labor, and delivery at eligible hospitals (Sec. 102)
5- Creates a new requirement that, starting in fiscal year 2027, Medicaid payments for maternity, labor, and delivery at eligible hospitals must be no less than a minimum payment rate.
6- Defines “maternity, labor, and delivery services” broadly (inpatient, outpatient, and related services, including behavioral health, tied to pregnancy and delivery) and “eligible hospital” (e.g., rural hospitals, critical access hospitals, Indian Health Service facilities, and hospitals with a majority of births funded by Medicaid/CHIP or some other criteria).
7- The Secretary must interim-finalize which services count as maternity-related and which hospitals qualify, with a mechanism to adjust rates over time (including a 150% of current Medicare/Medicaid base rate for 2027, then multi-year adjustments tied to cost data).
8Increased federal financial participation and anchor payments for low-volume obstetric hospitals (Sec. 103-104)
9- FMAP enhancement: For expenditures on maternity services at eligible hospitals, the federal match will be 100% for the enhanced portion, and the base rate portion will receive an enhanced match determined by annual FMAP adjustments.
10- Anchor payments for low-volume hospitals (Sec. 1923A in Title XIX): States must provide annual anchor payments to low-volume obstetric hospitals starting October 1, 2026, if the hospital qualifies as “low volume.”
11- Payments are designed to cover “labor and delivery revenue floors” (a minimum revenue level) and must be used for labor and delivery services in the community.
12- Requirements to receive anchor payments include maintaining obstetric skills through training, and continuing to provide labor and delivery services under binding contracts with States. There are clawback provisions if the hospital fails to meet service commitments.
13- The program includes protections against using these payments to inflate other federal or state supplemental payments and ensures proper treatment in upper payment limits and DSH calculations.
14CHIP and other payment alignment (Sec. 105-106)
15- The expanded payment rules apply to CHIP and are designed to ensure consistent federal support for maternity services across Medicaid and CHIP.
16- Provisions to disregard increased/extra hospital payments when calculating other supplemental payments and upper payment limits, ensuring a stable, non-offsetting treatment of these new funds.
17Expand coverage of maternal health care (Title II)
18- 12-month continuous, full benefit coverage for pregnant individuals under Medicaid and CHIP (Sec. 201)
19- States must provide continuous, full coverage for pregnancy-related services for at least 12 months, extending beyond childbirth where applicable.
20- Health homes for pregnant and postpartum women (Sec. 202)
21- Guidance on coverage for doulas and certain maternal-health professionals (Sec. 203)
22- Increased support for depression and anxiety screening during perinatal/postpartum periods (Sec. 204)
23- Presumptive eligibility for pregnant individuals (Sec. 205)
24- These provisions aim to improve access to comprehensive maternity-related care, mental health support, and continuity of coverage.
25Invest in the maternal health care workforce (Title III)
26- Emergency obstetric workforce support (Sec. 301)
27- Streamlined screening and enrollment of maternity care providers across neighboring states (Sec. 302)
28- Goals: expand the obstetric workforce, reduce barriers for providers to serve in high-need areas, and improve cross-border provider access where state lines create gaps in care.
29Requiring public communication of obstetrics data and unit closures (Title IV)
30- Timely notifications of impending hospital obstetric unit closures (Sec. 401)
31- Data collection on hospital labor and delivery services (Sec. 402)
32- These transparency measures are meant to alert communities and policymakers about changes in local obstetric capacity and to inform planning.

Impact Areas

Primary group/area affected- Rural and safety-net hospitals that provide maternity, labor, and delivery services, and the pregnant population they serve, including communities with high Medicaid/CHIP reliance.Secondary group/area affected- States implementing Medicaid/CHIP, with implications for state budgets due to increased federal matching and the anchor payments.- The maternal health workforce, including obstetricians, midwives, birth workers, and related professionals, and providers who may cross state borders for work.Additional impacts- Improved data collection and reporting on obstetric services, potentially informing policy decisions and targeted support for underserved populations.- Potential operational changes for hospitals (e.g., maintaining 24/7 obstetric capacity, entering service contracts with states, governance around use of anchor funds).- Possible effects on fee structures, provider participation, and hospital revenue streams, especially for small rural facilities.FMAP: Federal Medical Assistance Percentage, the share of Medicaid costs covered by the federal government.DSH: Disproportionate Share Hospital payments, a federal payment program to subsidize hospitals serving a high number of low-income patients.UPL: Upper Payment Limits, statutory ceilings on the amount of Medicaid payments a state can claim for certain services.Eligible hospital: In this bill, includes rural, critical access, IHS/Tribal hospitals, or hospitals with a significant share of Medicaid/CHIP births, or those projecting at least 50% qualifying births.Low-volume obstetric hospital: Hospitals with relatively few births per year (and meeting other criteria outlined in the bill), which would receive anchor payments to maintain essential obstetric capacity.

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