Client Alert

New Federal Law Requires States to Study Maternity Care Costs

A new Medicaid requirement creates both a compliance obligation and an opportunity for states to better understand maternity care costs and reimbursement trends.

Section 6104 of the Consolidated Appropriations Act

April 27, 2026

4 minutes

Key Takeaways

The Consolidated Appropriations Act, 2026 (CAA 2026) introduces a new Medicaid requirement for states to study the costs of maternity, labor, and delivery services at applicable hospitals. With findings due to the Secretary of Health and Human Services by August 2028, states should begin planning now to ensure they are prepared to meet the data, analysis, and reporting requirements.

A new federal mandate is coming. States must complete a comprehensive analysis of maternity service costs, payment rates, cost drivers, and future expenditure trends.
Early planning will be essential. Meeting the August 2028 deadline will require thoughtful data collection, hospital coordination, and analytical preparation.
Myers & Stauffer can support state efforts. Our experience in Medicaid cost reporting, rate analysis, and federal compliance can help states navigate this new requirement.

What State Agencies Need to Know: Is Your State Ready?

The scope of this mandate is significant, and the timeline is tighter than it may appear. States that begin planning now will be far better positioned to meet data and reporting requirements mandated by the Centers for Medicare & Medicaid Services.

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What the Law Requires

The statute defines “applicable hospitals” as either: (1) hospitals where more than 50 percent of births are financed by Medicaid or Children’s Health Insurance Program (CHIP); or (2) rural hospitals furnishing fewer than 300 births per year on average. For these facilities, states must document and analyze costs across six distinct areas: Current cost estimates based on the two most recent years of expenditure data. Cost estimates for hospitals that stopped providing labor and delivery services within the past five years. Geographic, demographic, and economic factors driving cost variation. Payment rates across Medicare, Medicaid (fee-for-service and managed care), the CHIP, and commercial payers. A comparative payment rate analysis, including evaluation of bundled payments, quality incentives, and low-volume adjustments. A three-year forward-looking evaluation of anticipated changes in expenditures and reimbursement.

Key Applicability Dates

Understanding the Timeline

February 3, 2026

CAA 2026 enacted; state study requirement established.

The Consolidated Appropriations Act, 2026 (P.L. 119-75), including Section 6104, was enacted. The state study requirement begins from this date.

August 2028

Deadline for states to complete and submit the first maternity, labor, and delivery cost study.

States must complete the maternity, labor, and delivery services cost study and submit results to the Secretary of Health and Human Services no later than 30 months after enactment (August 2028).

Every five years thereafter

States must repeat the study and submit updated findings.

Following the initial submission, states must conduct and submit the study every five years.

How Myers & Stauffer Can Help

Cost Estimation and Data Collection
We can design and execute the representative hospital sampling required under the law, capturing expenditure data across both active and recently closed labor-and-delivery programs.
Multi-Payer Payment Rate Analysis
Our team has deep experience reconciling payment data across Medicare, Medicaid fee-for-service, managed care, CHIP, and commercial payers — exactly the cross-payer comparison the statute requires.
Geographic and Demographic Modeling
We build analytic frameworks to assess how location, community demographics, and local economic conditions drive cost variation, including for the low-volume rural hospitals that are central to this study.
Forward-Looking Financial Projections
The law requires a three-year outlook on anticipated changes in maternity-related expenditures and reimbursement. Our forecasting methodologies produce defensible, data-driven projections that will satisfy this requirement.
Technical Assistance for Small Rural Hospitals
For states with eligible rural hospitals (fewer than 300 births per year), we can serve as a technical assistance partner to help those facilities compile the detailed cost information contemplated by the law’s $10 million federal grant program.

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Study Timeline

Rural Hospital Threshold

Medicaid/CHIP Births

Myers & Stauffer Can Support State Efforts

With an August 2028 deadline, the planning window is already open. We welcome the opportunity to discuss your state’s specific needs, data landscape, and timeline. Please reach out to one of our team members.

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