The chair of the Senate Finance Committee on Monday released a bill that would increase federal financial support to hospitals in hopes of stemming the tide of labor and delivery unit closures in rural and underserved areas. Nearly a quarter of rural hospitals stopped providing obstetric services between 2011 and 2021, according to Chartis, a health care consulting firm. Analysts blame the closures on low Medicaid reimbursement rates and declining birth rates in rural communities.
The combination, they said, makes it financially challenging to keep labor and delivery units staffed. In a call with reporters, Senate Finance Committee Chair Ron Wyden, D-Ore., said he was inspired to introduce the bill after hearing of the impending closure of a maternity ward in Baker City, Ore.
“Closures like these are driven by stark economic realities facing the hospitals and efforts by large hospital chains to streamline the business at the expense of young families,” Wyden said. His bill would increase the base Medicaid payment rate for labor and delivery services to 150 percent of the Medicare rate for rural hospitals. The increased rate would also apply to hospitals for which at least 60 percent of its births are paid for by Medicaid, the Indian Health Service or through self-pay.
The federal government would also increase its share of the Medicaid match for labor and delivery services at eligible hospitals. About 4 in 10 births in the United States are financed through Medicaid. The .