Keeping Obstetrics Local Act
The Keeping Obstetrics Local Act is a comprehensive bill aiming to strengthen financial support for rural and safety-net hospitals that provide maternity, labor, and delivery (M/L&D) services, expand maternal health coverage, and bolster the maternity care workforce. Key elements include higher Medicaid payments for M/L&D at eligible hospitals (with a new minimum payment rate and a pathway to ongoing, state-determined adjustments), federal support for low-volume obstetric hospitals through “anchor payments,” and a requirement for states to study and report the costs of providing M/L&D care. The bill also broadens coverage for pregnant individuals (12 months of continuous, full benefits under Medicaid and CHIP), expands access to doulas and maternal health services, and strengthens workforce and data transparency (including faster information on obstetric unit closures). Overall, the bill seeks to preserve obstetric capacity in rural and vulnerable areas while expanding access to care and related services for pregnant people. The package is structured in four main areas: Title I enhances hospital financial support and data collection around costs; Title II expands maternal health coverage (including for pregnancy-related services and certain non-clinical supports); Title III invests in the maternal-health workforce; and Title IV improves public communication and data collection on obstetric services and unit closures. It would substantially affect Medicaid/CHIP payment rules, hospital payments, and coverage rules, with phased implementation beginning roughly one year after enactment.
Key Points
- 1Higher, minimum Medicaid payments for maternity, labor, and delivery at eligible hospitals: Starting in fiscal year 2027, Medicaid payments for M/L&D services at eligible hospitals must be no less than 150% of the Medicare rate, with further annual adjustments through 2032 based on state cost studies. Eligible hospitals include rural facilities, critical access hospitals, certain IHS/tribal hospitals, and hospitals with a substantial share of qualifying births.
- 2New anchor payments for low-volume obstetric hospitals: The bill creates 1923A to provide annual anchor payments to low-volume obstetric hospitals (after 2028) to ensure ongoing access to L&D services. Payments are designed to cover the gap between the hospital’s Medicaid L&D revenue floor and payments already received, with requirements to maintain obstetric services, participate in training, and contract with the state to continue L&D services for a multi-year period.
- 3State cost studies and reporting: Each state must study the costs of providing M/L&D services (cost of operations, payments, etc.) every five years, and report findings to HHS. The Secretary will publish national findings and a report with recommendations for improving data collection on M/L&D costs. A 2026 funding set-aside supports hospital-cost data collection efforts.
- 4Expanded maternal health coverage under Medicaid and CHIP: The bill requires 12 months of continuous, full benefits for pregnant individuals under Medicaid and CHIP, including comprehensive pregnancy-related services, and expands coverage rules for postpartum periods and related services. The expansion also includes coverage guidance for doulas, mental health screening (perinatal/postpartum depression and anxiety), and presumptive eligibility for pregnant individuals, with phased effective dates.
- 5Workforce and access improvements: Provisions for emergency obstetric workforce support and streamlined cross-state provider enrollment aim to bolster the obstetric workforce and enable providers to practice in neighboring states when needed.
- 6Public communications and data collection on obstetric services: Hospitals must be notified of imminent obstetric unit closures in a timely manner, and there will be enhanced data collection on labor and delivery services, including utilization and capacity.