Maternity Care Payment Reform: What have we tried so far? Is it working?

By February 16, 2015 One Comment

Throughout this series, we have continually come back to the way we pay for care. We know a lot about what improves maternal and infant health, but we are paying providers and hospitals to do other things entirely.


So, what I really want to know – what I began this whole series to figure out – is, can we scale up these effective care models by paying for care differently? Which of the ever expanding array of payment innovations could best cultivate a woman-centered, relationship-based maternity care system and drive critical gains in maternal and infant health?


I decided to start by looking at what has been tried so far. Below are the methods that have been described or evaluated in the academic literature or in reports and other resources available online.


Don’t pay for care that is medically inappropriate (Denial of Payment)

It seems like it should be easy for payers to stop paying for things that are harmful, have zero evidence of benefit, and violate ACOG guidelines. But Medicaid programs and health plans have had to wait until the “perfect storm” before implementing denial of payment for early elective deliveries. There has been a massive multistakeholder initiative to reduce such deliveries, including well coordinated public awareness, clinician training, process redesign, and performance reporting efforts. Riding this wave of rapid practice change, South Carolina is one of several state Medicaid programs that have stopped reimbursing for elective deliveries before 39 weeks.


Pay providers and hospitals a bit more (or a bit less) based on the quality of their care. (Value-Based Pay for Performance)

In the typical fee-for-service system, the provider gets paid regardless of the quality of care or whether the patient is satisfied. Although doctors, nurses, and midwives want the healthiest moms and babies possible, all of the financial incentives are essentially telling providers to let the woman and baby get sicker, do more tests and procedures than necessary, and minimize time-consuming activities like education, shared decision making, and coordination of social support, even if these things improve health.


Value-based payments aim to bring incentives in alignment with the goal of providing high-quality care. But thus far their potential for impact is limited. That’s because these systems generally rely on nationally endorsed quality measures, and it takes years and years for a measure to go through the development, testing, and endorsement process and then to be adopted into practice. Most of what constitutes good care or promotes good health isn’t measured in any standard and reliable way, and it is certainly not linked to payment.


The most notable example of value-based pay for performance for maternity care is part of CalSIM, the State Innovation Model in California.  The California Maternal Quality Care Collaborative (CMQCC) operates a state-wide Maternal Data Center, which pulls data from claims and vital statistics databases and reports these back to all hospitals, as well as to payers in the state. This program has been focused on early elective deliveries (the most widely used measure) and is building on the success of that initiative by adding reporting of three other measures: cesarean delivery in low-risk pregnancy, vaginal birth after cesarean, and rates of unexpected morbidity in term infants.


Stop paying more for cesareans than vaginal births (Blended Payments)

A higher payment for cesarean is a rather obvious incentive to do more cesareans. With a national c-section rate of 1 in 3, it’s hard to imagine this particular financial incentive isn’t part of the problem. In an effort to rein in overuse, many health plans have stopped paying physicians more when they perform cesareans, which removes this incentive.


However it’s the hospitals, not the physicians, that are really gaining from more cesareans. According to a 2013 analysis from Truven Analytics, the hospital facility fee makes up almost two-thirds of the total spend on maternity care, and this fee is about 50% higher when the birth is a c-section. The state-wide CalSIM program introduces a blended payment for hospitals, meaning participating plans will pay hospitals the same fee whether the baby is born in the delivery room or the operating room. These blended payments have not been implemented yet though; they are slated to be rolled out in 2016.


Bundle up the outpatient and inpatient care and pay a single fee. (Bundled Payments)

Bundled payments take blended payments to the next level by providing a single payment for “birth” that includes both the provider and facility fees and is the same regardless of mode of delivery.


Before bundled payments can be implemented, it is necessary to define what’s in the bundle. What fee-for-service payments does the bundle replace? There are two major bundles described to date:


  • a “delivery only” bundle, where providers and hospitals get a bundled payment for the birth, but there are separate payments to the providers for the outpatient prenatal and postpartum/neonatal care
  • a “comprehensive” bundle that includes prenatal, labor/birth, and postpartum care, but excludes care of the newborn, which is reimbursed separately.


It is also necessary to put in place precautions to prevent unintended consequences, like doing too few c-sections, or turning away women or babies with serious health issues that are costly to manage. To achieve this, payment is tied to reporting of quality measures and some women or babies are excluded from the bundled payment scheme due to complicating conditions or risk factors. (Health plans will continue to use fee-for-service payments in these cases.)


I could find detailed information about only two examples of bundled payment “in the wild.” Both were comprehensive bundles. In Arkansas, the major payers joined forces to take incremental progress toward a bundled payment program. Through the program, the payers continue to pay prospectively fee-for-service, then retrospectively adjust payments based on the bundled payment calculations of shared savings or risk. At Geisinger, an integrated health system, a clinical process redesign was implemented together with a bundled price for the entire maternity episode.


Paying a “bonus” for delivering CenteringPregnancy group prenatal care (Incentive Payments)

On top of the typical global maternity fee, BlueChoice Health Plan of South Carolina pays providers incentive payments for each woman who attends a CenteringPregnancy visit, and an additional payment if she attends at least half of the 10 sessions. Although this incentivizes a process of care, not the ultimate outcome, it is a good “buy” for the payer because Centering visits are shown to reduce preterm birth. Keeping a single baby out of the NICU could pay for a year’s worth of incentive payments, easily. Bonus payments may help providers overcome institutional barriers to implementing CenteringPregnancy, or work to recruit more women into that model.


So…Is It Working?

Most of these payment reforms are just getting off the ground, so there is not much evidence to know what is working. What we have suggests changes so far are directionally correct but have only scratched the surface of what is possible. The most progress has been on curbing what could be characterized as egregious waste: excess use of early elective delivery, a practice that puts babies at risk for the sake of convenience and a false concept of “efficiency.” In one of the more mature payment reforms – Geisinger’s bundled payment program – there have been improvements across almost all of the processes measured. This is excellent, but most of these processes are basic components of care, like remembering to give RhoGAM to Rh-negative women, referring women who smoke to smoking cessation services, and conducting a postpartum visit. In other words, the bundled payment isn’t incentivizing excellent care, it is incentivizing doing the basics reliably. This is a commendable start, but there’s so much more we can do.


What’s most clear is that payment reform in maternity care is in its infancy, but poised to mature rapidly, and that data is the most potent accelerant. Next in this series, we will look at ways payment reform can mature into models that foster woman-centered, community-integrated care like the ones we have reviewed in recent weeks. Then we will look at the technology and data infrastructure required to get to payment reform – and care model innovation – 2.0.


Image Source: https://www.flickr.com/photos/hikingartist

One Comment

  • Until There is a financial dis-incentive to perform expensive unnecessary & dangerous interventions doctors & hospitals will continue to do them. For example, when introduced to the hospital market in the mid-1980s, the electronic fetal heart monitor was for cost containment — as new administrators,we were told how many nurses we could lay off with each machine. No “safety” information, as In “protecting” the baby was ever presented.

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