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Topic / Health

The State of Value-Based Care and Its Potential Effect on Maternal Health Disparities

The U.S. faces a maternal mortality crisis, particularly for women of color. Maternal mortality rates for Black and Hispanic patients remain the highest of any industrialized nation and thrice the rate for white women.1 Childbirth is the most common reason for hospitalization in the U.S., and Cesarean sections are the most common surgery performed overall.2 Insufficient prenatal care has been shown to increase preterm birth and poorer maternal outcomes.3

The Biden Administration allocated significant funding to support this crisis, namely through extending Medicaid coverage through one year postpartum. While the Affordable Care Act (ACA) initially made strides in narrowing this gap, maternal mortality rates are rising again, and redesigning value-based payment (VBPs) for this population is a piece of the solution.4

One way to combat inequities through policy is through altering reimbursement mechanisms and engaging in innovative payment models, to facilitate patients getting the care they need and deserve. The U.S. has traditionally operated on a fee-for-service healthcare system, in which providers are reimbursed for each service they deliver, incentivizing providers to do higher cost and more frequent services. The idea is that by changing provider pay to focus on quality, rather than quantity or unit price, we can better improve patient experience and healthcare outcomes, and have hospitals and physicians have more of a stake in the game.

VBP encompasses programs that do this by emphasizing accountable care, care coordination, and provider financial incentives for patient improvement.5 For example, accountable care organizations (ACOs) are a form of VBP where providers may get financial bonuses when their patients meet certain targets. While quality enhancing and cost-reducing in theory, VBP policies can also restrict certain health systems from participating, impose low spending targets, and create performance-based incentives that can harm lower-income communities.6 Physicians who are working in predominantly Black or Hispanic neighborhoods with higher rates of chronic disease, may be less likely to participate in VBP if they would be penalized for these patients having poorer outcomes.7 However, the principle of realigning incentives through VBP still is necessary, and safeguards can be built for these providers who are in vulnerable communities.

In 2020, Senate Democrats introduced the Black Maternal Health Momnibus Act, a combination of 13 bills intended to invest in comprehensive maternal health reform.8, 9 The Momnibus bills addressed VBP advancement by “promoting innovative payment models to incentivize high-quality maternity care and non-clinical support during and after pregnancy.”10 President Biden signed one bill into law that addresses mothers who are veterans, although the rest of Momnibus is undergoing legislative review.11 Several states have successfully implemented their own VBP plans for maternity care, but we must evaluate their translatability and sustainability.

Key Issues

Reimbursement for maternal, newborn, and postpartum care under the current fee-for-service system is fragmented and promotes inequities. Perinatal reimbursement schedules favor low-value care. Insurance pays hospitals $9,000 more for completing Cesarean sections instead of vaginal births, putting patients at risk for complications like postpartum hemorrhage and infection.12 Black women, even when low risk, are more likely than white women to have a Cesarean section.13

Currently, insurers reimburse the mother/infant dyad separately. Most insurance plans cover care for mothers and infants separately, which does not encourage coordination between providers treating both parties. Effective care correlates maternal care to newborn outcomes or care needs, and some states are working on pilot programs that do this.14

And lastly, insurers do not reimburse maternal care adequately. VBP models do not typically include doulas and midwives, whose care is linked to improved outcomes.15 Maternity wards and birth centers are more likely to close, often in disadvantaged areas.


Passing comprehensive legislative policy is a lengthy process, and is fraught with negotiations. It is unlikely that the Senate will pass the Momnibus Act in its entirety. These bills may need to be reintroduced in a fragmented approach, and it is not guaranteed that VBP provisions will be included in the final ruling given how far-reaching it is. Therefore, we must encourage individual states to pilot their own VBP programs in the meantime.

States could propose legislation to increase funding and implementation of state-run bundled payment programs for maternal health coverage. New York utilized a Section 1115 Medicaid waiver to bundle pregnancy costs as a VBP model. Subsequently, their hospital systems shifted focus to equity by “improving health education, increasing conception counseling, lowering C-section rates, and repairing resource utilization.”16 California saw C-section rates drop by 20% with their bundled payments.17 The American College of Obstetricians and Gynecologists (ACOG) supports plans for bundled payments through Perinatal Quality Collaboratives, which incorporates input from various public health professionals and physician groups.18

However, the Centers for Medicare and Medicaid Services (CMS) found two bundled payment models did not meet the criteria for pilots due to their limited relevance to Medicare, putting implementation responsibility on state Medicaid programs.19 Some states found mixed results; Tennessee found no significant changes in cost or outcomes with their program.20 Individual providers also raise concerns about accepting more financial burden.

Another would be to divert resources and support to aid Congressional approval of all 13 Momnibus bills. Democratic Senators designed this legislative package to “address every clinical and nonclinical factor leading to the maternal health crisis.”21 Parts of the Momnibus Act have bipartisan support and House members previously supported passing 80% of the legislation.22

Certain states have successfully utilized bundled payments for maternity care, evaluated their results, and been able to engage in more equitable care. With the support of ACOG and other healthcare groups, we can allocate more funding towards these state-led initiatives and promote champion state models. Most physician groups, policymakers, and payers view maternity care as high-volume, costly, and episodic — which is perfectly suited for a bundled payment, value-based strategy. We must take the tools and programs we know work, and broaden them to reach all women in need.

  1. Munira Z. Gunja, Evan D. Gumas, and Reginald D. Williams II, “The U.S. Maternal Mortality Crisis Continues to Worsen: An International Comparision,” The Commonwealth Fund, December 1, 2022, ↩︎
  2. Clare Pierce-Wrobel and Katie Green, “To Help Fix the Maternal health Crisis, Look to Value-Based Payment,” Health Affairs, July 16, 2019, ↩︎
  3. MACPAC, “Value-Based Payment for Maternity Care in Medicaid: Findings from Five States,” Issue Brief, September 2021, ↩︎
  4. Gunja, Gumas, and Williams, “The U.S. Maternal Mortality Crisis Continues to Worsen: An International Comparison.” ↩︎
  5. Corinne Lewis, Celli Horstman, David Blumenthal, and Melinda K. Abrams, “Value-Based Care: What It Is, and Why It’s Needed,” The Commonwealth Fund, February 7, 2023, ↩︎
  6. Amol S. Navathe and Joshua M. Liao, “Aligning Value-Based Payments with Health Equity: A Framework for Reforming Payment Reforms,” JAMA 328, no. 10 (2022):925-26. ↩︎
  7. Charles N. Kahn, Kimberly Rhodes, Sarmistha Pal, Tilithia J McBride, Donald May, Joan E DaVanzo, and Allen Dobson, “CMS Hospital Value-Based Programs: Refinements Are Needed to Reduce Health Disparities and Improve Outcomes,” Health Affairs 42, no. 7 (2023): 928-36.
  8. Nandita Raghuram, “What is the Mmnibus Act and How Can You Support It?” What to Expect, July 11, 2023, ↩︎
  9. “Black Maternal Health Momnibus,” Black Maternal health Caucus, ↩︎
  10. “Black Maternal Health Momnibus.” ↩︎
  11. Raghuram, “What Is the Momnibus Act and How Can You Support Its Bills?” ↩︎
  12. Samara Jefferson, “Value-Based Care: A Key Tool in Improving Maternal Health Outcomes,” The Century Foundation, April 29, 2022, ↩︎
  13. Pierce-Wrobel and Green, “To Help Fix the Maternal Health Crisis, Look to Value-Based Payment.” ↩︎
  14. Ibid. ↩︎
  15. Jefferson, “Value-Based Care: A Key Tool in Improving Maternal Health Outcomes.” ↩︎
  16. Ibid. ↩︎
  17. Carmen Heredia Rodriguez, “Insurers Test New Way To Cut Maternity Care Costs: Bundling,” Kaiser Family Foundation, September 27, 2019, ↩︎
  18. ACOG, “Frequently Asked Questions,” ↩︎
  19. Pierce-Wrobel and Green, “To Help Fix The Maternal Health Crisis, Look To Value-Based Payment.” ↩︎
  20. Rodriguez, “Insurers Test New Way To Cut Maternity Care Costs: Bundling.” ↩︎
  21. Raghuram, “What Is the Momnibus Act and How Can You Supports Its Bills?” ↩︎
  22. Emily Mae Czachor, “Rep. Lauren Underwood Says There’s a “Pathway” for Maternal Health Bills to Pass Congress,” CBS News, May 14, 2023, ↩︎