New Federal Law Requires States to Study Maternity Care Costs

Is Your State Ready?

The recently enacted Consolidated Appropriations Act, 2026 (CAA 2026), P.L. 119-75 includes a consequential new mandate for state Medicaid programs. Under Section 6104, every state must:

Conduct a comprehensive study on the costs of providing maternity, labor, and delivery services at applicable hospitals.
Submit results to the Secretary of Health and Human Services no later than August 2028, with the requirement repeating every five years thereafter.

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.

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.

How Myers and Stauffer Can Help

At Myers and Stauffer, we have supported state Medicaid agencies on cost reporting, rate-setting studies, and federal compliance engagements for nearly 50 years. We are uniquely positioned to serve as your state’s analytical partner for this requirement. Here’s what we bring to each component of the study.

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.

Start the Conversation Now

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.

Tim Guerrant, CPA Member	Bob Hicks, CPA Member	Johanna Linkenhoker, CPA Member	Jeff Roumm, CMA Senior Manager