Requiring adequate payment rates under Medicaid for maternity, labor, and delivery services at eligible hospitals

(a) Fee-for-Service payments Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended— (1) in subsection (a)(13)— (A) by striking and at the end of subparagraph (B); (B) by adding and at the end of subparagraph (C); and (C) by adding at the end the following new subparagraph: (D) for each fiscal year beginning with fiscal year 2027, payment for maternity, labor, and delivery services (as defined in subsection (uu)) furnished during such fiscal year in an eligible hospital (as defined in such subsection) at a rate that is not less than the minimum payment rate specified for the fiscal year in paragraph (4) of such subsection;; and (2) by adding at the end the following new subsection: (uu) Maternity, labor, and delivery services and eligible hospitals defined For purposes of subsection (a)(13)(D)— (1) Maternity, labor, and delivery services (A) In general The term maternity, labor, and delivery services means such inpatient hospital services and outpatient hospital services, including behavioral health services, that are provided in relation to maternity care or labor and delivery, identified by appropriate ICD and CPT codes, as the Secretary shall specify after consultation with professional or medical societies with expertise in pregnancy, childbirth, and postpartum care. (B) Scope Such term shall not be limited in application, for any eligible hospital, only to services that relate to a birth that occurs in the hospital. (C) Rulemaking Not later than July 1, 2026, the Secretary shall issue an interim final rule specifying which services shall be considered maternity, labor, and delivery services for purposes of this subsection and subsection (a)(13)(D). (2) Eligible hospital (A) In general The term eligible hospital means, with respect to a State and fiscal year— (i) a hospital that is located in a rural area (as defined by the Federal Office of Rural Health Policy for the purpose of rural health grant programs administered by such Office); (ii) a critical access hospital (as defined in section 1861(mm)(1)); (iii) a hospital operated by the Indian Health Service or an Indian Tribe under the Indian Self-Determination and Education Assistance Act; (iv) a hospital for which, in the most recent 12-month period for which data is available, at least 50 percent of all births for which the hospital provided maternity, labor, and delivery services during such fiscal year were qualifying births; or (v) a hospital that is able to demonstrate, through a process to be determined by the Secretary, that, for the applicable fiscal year, the hospital projects that at least 50 percent of all births for which the hospital will provide maternity, labor, and delivery services during such fiscal year will be qualifying births. (B) Identification of eligible hospitals Each State, subject to the approval of the Secretary, shall identify the hospitals in the State that are eligible hospitals with respect to a fiscal year. (3) Qualifying birth For purposes of paragraph (2), the term qualifying birth means a birth for which any maternity, labor, and delivery services associated with the birth— (A) were paid for under a State plan under this title (or under a waiver of such a plan) or under a State child health plan under title XXI (or under a waiver of such a plan); (B) were paid for under title XVIII; (C) were provided by the Indian Health Service or a Native Hawaiian health care system (as defined in section 12 of the Native Hawaiian Health Care Improvement Act); or (D) were provided to a patient who does not have minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986) and were not fully paid for by such patient. (4) Minimum payment rate specified The minimum payment rate specified in this paragraph is, with respect to an eligible hospital and maternal, labor, and delivery services— (A) for fiscal year 2027, 150 percent of the payment rate that would apply for such services and hospital under title XVIII; and (B) for each period of 5 fiscal years beginning with fiscal years 2028 through 2032, a payment rate that is determined for such period by the Secretary to accurately reflect the costs incurred by eligible hospitals in providing such services, informed by the results of the most recent State studies submitted to the Secretary under section 101(a) of the Keeping Obstetrics Local Act.. (b) Under Medicaid managed care plans Section 1932(f) of the Social Security Act (42 U.S.C. 1396u–2(f)) is amended— (1) in the heading, by inserting and maternity, labor, and delivery services at eligible hospitals after services; and (2) by striking described in section 1902(a)(13)(C) and inserting described in subparagraph (C) of section 1902(a)(13) or maternity, labor, and delivery services described in subparagraph (D) of such section that are furnished by an eligible hospital (as defined in section 1905(uu)).