Policy Analysis | July 2013

Reduction of Early Elective Deliveries for Medicaid and SCHIP Recipients

Jeremy Williams

According to a University of Minnesota study published in the American Journal of Public Health, the average cost of Cesarean, or C-section, births is on average approximately $10,000 more expensive than vaginal births ($27,866 versus $18,329 in 2010).  Among Medicaid births, the average costs are $9,100 for a vaginal birth, as opposed to $13,600 for a C-section.  Considering state Medicaid programs pay for almost half of all U.S. births, there is substantial money to be saved through policies that discourage unnecessary C-sections.  One popular policy is to remove financial incentives for unnecessary C-sections by equalizing Medicaid payments for both procedures.  In most states, reimbursement policy seems to favor C-sections.  Since the procedure accounts for approximately 45 percent of the $86 billion the United States spends on childbirth each year, a reduction in the prevalence of C-sections could mean huge savings for states.  Here are some examples of policies SLC states have enacted to address this issue.

SLC Member States' Medicaid and Public Health Efforts to Reduce Early Elective Deliveries

State Medicaid Payment Strategies Collaborative Strategies
Alabama Alabama Perinatal Excellence Collaborative (APEC), a collaboration of the University of Alabama Birmingham, the University of South Alabama, Alabama Medicaid and statewide OB providers and hospitals, serves as resource for obstetric and other healthcare providers throughout the state of Alabama for assistance in improving perinatal outcomes. APEC released guidelines to assist providers and facilities in implementing systems to decrease the rate of early elective deliveries.
Arkansas Medicaid Inpatient Quality Incentive Program: incentive for meeting threshold levels on elective delivery measure. Arkansas Health Care Payment Improvement Initiative: Partnership of Arkansas Medicaid, the Arkansas Department of Human Services, Arkansas Blue Cross and Blue Shield, and Arkansas QualChoice to transform health care in the State. Defined episodes of care for Perinatal conditions for which incentive payments are provided based on thresholds.
Florida Florida Perinatal Quality Collaborative (FPQC), which includes engagement of the Florida Agency for Health Care Administration (Medicaid Agency) and Florida Department of Health, identified elimination of elective deliveries before 39 weeks as one collaborative project of focus.
Kentucky Healthy Babies are Worth the Wait: multi-stakeholder collaborative, including the Kentucky Department of Health, to reduce preterm birth. The collaborative uses provider, patient and community outreach and engagement to reduce early elective deliveries.
Louisiana Medicaid and private payer incentives to providers to reduce elective deliveries prior to 39 weeks gestation. Louisiana Birth Outcomes Initiative: a Louisiana Department of Health and Hospitals (including Medicaid), public‐private effort to improve the outcomes of Louisiana's births and reduce Medicaid costs. The effort includes statewide survey of existing policies and access to tools for reduction of early elective deliveries for the largest birthing hospitals in the state.
Mississippi Mississippi State Department of Health (MSDH) and the March of Dimes are working with the Mississippi Chapters of the American Association of Pediatrics, the American Congress of Obstetricians and Gynecologists, the Mississippi Hospital Association, the Division of Medicaid, and the University of Mississippi Medical Center to increase healthy births in Mississippi.

In Mississippi, health officials are tackling pre-term birth and infant mortality by a number of targeted items, including ending elective C-section deliveries, and inductions before 39 weeks.

North Carolina Medical Homes receive Medicaid incentive payments for meeting quality thresholds including elective delivery rates. The Perinatal Quality Collaborative of North Carolina (PQCNC), which includes participation of NC Division of Medical Assistance, the NC Division of Public Health and Community Care of North Carolina (CCNC), has an initiative to eliminate elective deliveries under 39 weeks' gestation without documented pulmonary maturity studies in participating hospitals. The collaborative uses patient and provider education, as well as development and implementation of hard stop policies to reduce early deliveries.
Oklahoma State Department of Health and multiple partners Every Week Counts Collaborative is a statewide effort to eliminate non-medically indicated (elective) deliveries before 39 completed weeks of pregnancy.
South Carolina Effective January 1, 2013, Medicaid and Blue Cross Blue Shield policies will deny payment for non-medically necessary early elective deliveries. South Carolina Birth Outcomes Initiative (BOI) is an effort by the South Carolina Department of Health and Human Services (SCDHHS) and its partners to improve the health of newborns covered by Medicaid. One of the key goals is eliminating early elective deliveries.
Tennessee Cesarean and Vaginal Delivery Reimbursement: Cesarean and vaginal deliveries reimbursed at the same rate. Tennessee Initiative for Perinatal Quality Care (TIPQC) uses data collection and best practices approach for reduction of elective deliveries before 39 weeks and implemented pilot project in Davidson County.
Texas Medicaid will deny payment for claims non-medically necessary early elective deliveries, but allow retrospective reviews for reconsideration. Healthy Texas Babies initiative was developed to help Texas communities decrease infant mortality and preterm birth, including a focus on reducing early elective deliveries, using evidence-based interventions.

 Source: "Reducing Early Elective Deliveries in Medicaid and CHIP," Medicaid.gov