Maternity Care Costs Set to Rise as Global Billing Ends

The way we pay for maternity care is about to change, and it’s not looking good for those who rely on health insurance. The American Medical Association (AMA) has decided to eliminate the global payment codes used by obstetricians and midwives, replacing them with a fee-for-service model. This shift, set to take effect at the end of this year, could raise the cost of childbirth without necessarily improving outcomes for mothers and babies.

For decades, health plans have paid for professional services related to pregnancy and delivery through a single bill, known as global billing. Under this system, obstetricians and midwives receive one lump sum that covers all prenatal visits, labor and delivery, and postpartum care. However, the AMA, following recommendations from the American College of Obstetrics and Gynecology (ACOG), will replace these global fees with a pay-as-you-go approach. Each prenatal visit, fetal monitoring session, and procedure will now be billed separately.

At first glance, this might seem like a more transparent way to handle billing. After all, breaking down costs can make it easier for patients to understand what they are paying for. However, the reality is that this change could lead to higher overall costs for both individuals and insurance providers. Jeff Levin-Scherz, a senior managing director at WTW and an assistant professor at Harvard Medical School, warns that there is every reason to believe this shift will result in increased expenses for employer-sponsored health plans and Medicaid programs.

The Risks of Fee-for-Service

The fee-for-service model has been criticized for incentivizing more frequent and sometimes unnecessary medical interventions. In a system where each visit or procedure generates additional revenue, there’s a risk that providers might order more tests and treatments than are clinically necessary. This not only drives up costs but can also lead to over-medicalization of childbirth.

The potential impact on cesarean section rates is particularly concerning. Cesarean sections have been on the rise in the U.S., increasing from 22.9% in 2000 to 32.5% in 2025. While some C-sections are medically necessary, others may be driven by financial incentives or convenience. The fee-for-service model could exacerbate this trend, as each procedure generates additional revenue for providers.

The shift away from global billing might also affect the timing and quality of prenatal care. Early and consistent prenatal visits are crucial for identifying and addressing potential complications early in pregnancy. However, under the new system, there’s a risk that these visits could be seen as less financially rewarding, potentially leading to fewer or less frequent check-ups.

What Comes Next

The implications of this change extend beyond just cost. Public health experts are concerned about the broader impact on maternal and infant outcomes. The U.S. Already has some of the highest rates of maternity mortality and severe maternal morbidity among wealthy nations. These statistics are even more alarming when considering that the global billing system, in place since the 1990s, hasn’t led to significant improvements in maternity care.

As we move forward, it’s crucial for policymakers, healthcare providers, and insurance companies to work together to ensure that the shift to fee-for-service doesn’t come at the expense of maternal health. This might involve implementing safeguards to prevent over-medicalization, ensuring adequate reimbursement for essential prenatal and postpartum services, and closely monitoring outcomes to identify any negative trends.

In the end, the goal should be to find a balance between transparency in billing and maintaining high-quality, affordable care for pregnant women. The well-being of mothers and their babies depends on it.