S. 1598

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1598 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
1st Session
S. 1598

To address maternity care shortages and promote optimal maternity 
outcomes by expanding access to birth centers and exploring more 
effective payment models for birth center care, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 5, 2025

Mr. Lujan introduced the following bill; which was read twice and 
referred to the Committee on Finance

_______________________________________________________________________

A BILL

To address maternity care shortages and promote optimal maternity 
outcomes by expanding access to birth centers and exploring more 
effective payment models for birth center care, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Better Availability of Birth Centers 
Improves Outcomes and Expands Savings Act'' or the ``BABIES Act''.

SEC. 2. GRANTS TO IMPROVE ACCESS TO FREESTANDING BIRTH CENTER SERVICES.

Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.) is amended by adding at the end the following:

``SEC. 399V-8. STRONG START BIRTH CENTER GRANTS TO ASSIST BIRTH CENTERS 
WITH START-UP OR EXPANSION COSTS TO EXPAND ACCESS TO 
BIRTH CENTER SERVICES IN UNDERSERVED AREAS.

``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may award grants 
to eligible birth centers that are accredited, or intend to seek 
accreditation, as birth centers by a nationally recognized accrediting 
body such as the Commission for the Accreditation of Birth Centers, or 
that have the intention of seeking such accreditation, for the purposes 
described in subsection (b).
``(b) Use of Funds.--A birth center receiving a grant under this 
section may use such grant funds for any of the following purposes:
``(1) Renovation, expansion, or construction of a birth 
center facility.
``(2) Purchasing or updating equipment for a birth center.
``(3) Accreditation and State licensure activities.
``(c) Grants; Grant Amounts.--For each of fiscal years 2026 through 
2030, the Secretary shall award grants under this section to up to 15 
birth centers, each in an amount of not less than $300,000 and not more 
than $500,000.
``(d) Special Considerations.--In awarding grants under this 
section, the Secretary shall give special consideration to an eligible 
birth center that--
``(1) is located in, or offers services to, a geographic 
area that--
``(A) has been designated under section 332 as a 
health professional shortage area with respect to 
maternity care; or
``(B) has maternity care outcomes that are below a 
threshold established by the Secretary; and
``(2) has not previously received a grant under this 
section.
``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for the period of 
fiscal years 2026 through 2030.''.

SEC. 3. MEDICAID DEMONSTRATION PROGRAM TO IMPROVE FREESTANDING BIRTH 
CENTER SERVICES.

Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
amended by adding at the end the following new subsection:
``(cc) Demonstration Program To Improve Freestanding Birth Center 
Services.--
``(1) Authority.--The Secretary shall conduct a 
demonstration program for the purpose of exploring more 
effective payment models for birth center care in order to 
improve access to, and the quality and scope of, freestanding 
birth center services for women with a low-risk pregnancy who 
are eligible for medical assistance under the State plan under 
this title or under a waiver of such plan.
``(2) Deadlines for participation criteria, prospective 
payment system; planning grants.--
``(A) Participation and prospective payment system 
deadline.--Not later than 1 year after the date of the 
enactment of this subsection, the Secretary shall do 
the following:
``(i) Publication of participation criteria 
for freestanding birth centers.--
``(I) In general.--The Secretary 
shall publish criteria for a 
freestanding birth center to be 
certified by a State for purposes of 
participating in a State demonstration 
program conducted under this 
subsection.
``(II) Requirements.--The criteria 
required to be published under 
subclause (I) shall include the 
following:
``(aa) Accreditation.--At 
the time of certification for 
purposes of participating in 
the demonstration program 
conducted under this 
subsection, a freestanding 
birth center must be accredited 
or have completed the initial 
phase of accreditation from an 
approved, nationally-recognized 
birth center accreditation 
body, as determined by the 
Secretary.
``(bb) Licensure and other 
requirements.--A freestanding 
birth center shall--

``(AA) be licensed, 
or otherwise approved, 
by the State to provide 
prenatal, labor and 
delivery, postpartum, 
newborn care, and other 
ambulatory services for 
which medical 
assistance is available 
under the State plan or 
waiver under this 
title; and

``(BB) comply with 
such other requirements 
relating to the health 
and safety of 
individuals who receive 
services furnished by 
the facility as the 
State shall establish.

``(cc) Care coordination.--
A freestanding birth center 
shall be able to meet care 
coordination requirements 
established by the Secretary, 
including requirements to 
coordinate care across settings 
and providers to ensure 
seamless transitions for 
patients across the full 
spectrum of health services, 
and shall be able to engage in 
consultation for higher level 
maternity care services, non-
maternity care services, and 
behavioral health needs, which 
may include plans for 
consultation, collaboration and 
referral, and arrangements with 
the following:

``(AA) Federally 
qualified health 
centers (and as 
applicable, rural 
health clinics) to 
provide Federally 
qualified health center 
services (and as 
applicable, rural 
health clinic services) 
to the extent such 
services are not 
provided directly 
through the birth 
center.

``(BB) Other 
outpatient clinics, 
including licensed 
midwifery and physician 
practices.

``(CC) Inpatient 
acute care facilities 
with obstetrical care 
units.

``(dd) Scope of services.--
As determined by the Secretary, 
a freestanding birth center 
shall be able to provide 
peripartum care for women with 
a low-risk pregnancy and for 
newborns, consistent with 
evidence-based guidelines.
``(ee) Capabilities.--A 
freestanding birth center shall 
have the following 
capabilities:

``(AA) In addition 
to the requirements 
specified under section 
431.53 of title 42, 
Code of Federal 
Regulations, and any 
successor regulation 
(relating to assurance 
of transportation), the 
capability and 
equipment to provide 
prenatal, labor and 
delivery, postpartum, 
and newborn care for 
women with a low-risk 
pregnancy, readiness at 
all times to initiate 
emergency procedures to 
meet unexpected needs 
of such women and of 
newborns within the 
center, including at 
least 2 qualified staff 
on-site at every birth, 
and the ability to 
facilitate transport to 
an acute care hospital 
with an obstetrical 
care unit when 
necessary.

``(BB) An 
established transfer 
plan with a receiving 
hospital with an 
obstetrical care unit 
with policies and 
procedures for timely 
transport.

``(CC) Medical 
consultation available 
from a licensed board-
certified physician 
with admitting 
privileges in 
obstetrics at a nearby 
hospital, as defined by 
State law or 
regulation.

``(DD) Data 
collection, storage, 
and retrieval, 
including data on 
intrapartum and 
postpartum maternal and 
newborn transfer rates 
and hospital 
admissions.

``(EE) The ability 
to initiate and 
document quality 
improvement programs as 
required by 
accreditation that 
include efforts to 
maximize patient 
safety, such as safety 
checklists, validated 
training and competency 
of staff, and emergency 
preparedness and 
drills.

``(ff) Health care 
providers.--A freestanding 
birth center shall employ, or 
have care delivery arrangements 
with, both of the following:

``(AA) A physician 
licensed to practice 
within the State or 
jurisdiction of the 
birth center.

``(BB) A midwife 
that meets or exceeds 
the education and 
training standards of 
the International 
Confederation of 
Midwives and who is 
licensed to practice 
within the jurisdiction 
of the birth center.

``(gg) Non-duplication.--In 
carrying out this subsection, 
the Secretary shall, with 
respect to a State 
participating in the 
demonstration program, 
establish procedures to 
prevent, to the greatest extent 
practicable, the provision of, 
or payment for, services under 
the demonstration program for 
which medical assistance is 
available under the State plan 
under this title or waiver of 
such plan.
``(ii) Guidance on development of 
prospective payment system for testing under 
state demonstration programs.--
``(I) In general.--The Secretary 
shall issue guidance for States 
participating in a demonstration 
program conducted under this subsection 
to establish a prospective payment 
system that shall only apply to 
freestanding birth center services 
that--
``(aa) meet the criteria 
established under clause (i); 
and
``(bb) are furnished by a 
freestanding birth center 
participating in such a 
demonstration program.
``(II) Requirements.--The guidance 
issued by the Secretary under subclause 
(I) shall, to the greatest extent 
practicable, provide for--
``(aa) a partial facility 
payment based on units in the 
case that a pregnant woman is 
admitted in labor and then 
needs to be transferred to the 
hospital in labor before the 
birth of the baby;
``(bb) a facility payment 
for therapeutic rest or for 
observation short stays to rule 
out labor;
``(cc) ensuring payment for 
the newborn and mother as 2 
separate facility payment 
components;
``(dd) ensuring payment for 
nitrous oxide and hydrotherapy 
supplies costs for pain relief;
``(ee) ensuring payment for 
all professional services of 
health professionals involved 
in the delivery of care in a 
birth center, which may 
include--

``(AA) 3 or more 
prenatal office visits;

``(BB) observation 
and triage;

``(CC) newborn exam 
and care; and

``(DD) multiple 
postpartum, mother, and 
newborn visits, as 
needed;

``(ff) ensuring payment for 
partial prenatal and postpartum 
care episodes or for prenatal 
care only with planned delivery 
in the hospital and returning 
for postpartum care in the 
birth center; and
``(gg) payment for services 
provided within--

``(AA) in the case 
of a pregnant woman, 
the period that 
commences upon the 
confirmation of 
pregnancy when the 
woman is accepted into 
care at the 
freestanding birth 
center, continues 
through prenatal care, 
labor, and delivery, 
and ends at the 
completion of the 
postpartum period (as 
defined by State law or 
regulation) with 
documentation of a plan 
for continued well 
woman care, inclusive 
of at least 2 
postpartum care visits; 
and

``(BB) in the case 
of a newborn, a period 
that continues through 
the first 28 days of 
life with documentation 
of continued infant 
care.

``(iii) Publication of an rfp for states to 
apply for the demonstration program.--
``(I) In general.--The Secretary 
shall publish a request for proposal 
(in this clause referred to as an 
`RFP') for States to establish and test 
a prospective payment system for 
freestanding birth center services 
that--
``(aa) meets the criteria 
established under clause (i); 
and
``(bb) are furnished by a 
freestanding birth center 
participating in a 
demonstration program under 
this subsection.
``(II) Requirements.--The RFP 
published by the Secretary under 
subclause (I) shall, to the greatest 
extent practicable, include the 
following parameters:
``(aa) States must have a 
minimum number of established 
or developing birth centers.
``(bb) States must have a 
mechanism to recognize or 
license birth centers.
``(cc) States must have at 
least 1 area that has been 
designated a maternity care 
desert.
``(dd) States must have 
areas with maternity care 
outcomes that are below a 
certain threshold, as 
determined by the Secretary.
``(ee) States should 
represent a diverse selection 
of geographic areas, including 
rural and underserved areas.
``(ff) Preference should be 
given to States that 
demonstrate the potential to 
expand the availability of and 
access to maternity care 
services in a demonstration 
area and increase the quality 
of services provided by 
freestanding birth centers 
without increasing net Federal 
spending, as determined by the 
Secretary.
``(III) Required information.--A 
State application to conduct a 
demonstration program under this 
subsection shall include the following:
``(aa) A description of the 
target population of 
individuals who are eligible 
for medical assistance under 
the State plan under this title 
or under a waiver of such plan 
and are to be served under the 
demonstration program.
``(bb) A list of the 
participating freestanding 
birth centers in the State.
``(cc) Verification that 
each participating freestanding 
birth center meets the 
participation criteria 
established in paragraph 
(2)(A)(i).
``(dd) A description of the 
scope of the freestanding birth 
center services available under 
the State plan under this title 
or waiver of such plan for 
women with a low-risk pregnancy 
that will be paid for under the 
prospective payment system 
tested in the demonstration 
program.
``(ee) Verification that 
the State has agreed to pay for 
such services at the rate 
established under the 
prospective payment system.
``(ff) An assurance that 
the State will require 
freestanding birth centers to 
submit to the State, and that 
the State will submit to the 
Secretary, such information and 
data as the State or Secretary 
may require relating to the 
demonstration program or an 
episode of care for such a 
pregnant woman or newborn.
``(gg) Such other 
information as the Secretary 
may require relating to the 
demonstration program, 
including with respect to 
determining the soundness of 
the proposed prospective 
payment system.
``(IV) Deadlines for submission of 
rfp applications.--The deadline for a 
State to submit an application to 
participate in the demonstration 
program conducted under this subsection 
shall be the date that is 90 days after 
the date on which the Secretary 
publishes the RFP under subclause (I).
``(B) Planning grants.--
``(i) In general.--Not later than 18 months 
after the date of enactment of this subsection, 
the Secretary shall award a planning grant to 
up to 6 States for the purpose of developing a 
detailed proposal to conduct a demonstration 
program described in paragraph (3).
``(ii) Use of funds.--A State awarded a 
planning grant under this subparagraph shall 
use the funds awarded under such grant to--
``(I) solicit input with respect to 
the development of the demonstration 
program from patients, providers 
(including certified nurse-midwives, 
other midwives licensed within the 
State, and physicians), and other 
stakeholders;
``(II) secure participation of 
freestanding birth centers that meet 
the criteria established under 
subparagraph (A)(i), including by 
providing support for such centers to 
meet that criteria (including 
accreditation) in order to maximize the 
number of freestanding birth centers 
participating in the demonstration 
program; and
``(III) in accordance with the 
guidance issued under subparagraph 
(A)(ii), establish a prospective 
payment system which the State shall 
use for making payments to freestanding 
birth centers participating in the 
demonstration program.
``(3) State demonstration programs.--
``(A) In general.--Not later than 2 years after the 
date of enactment of this subsection, the States 
selected by the Secretary under paragraph (2)(B)(i) 
shall launch their demonstration programs.
``(B) Length of demonstration programs.--A State 
conducting a demonstration program in accordance with 
this paragraph shall conduct the program for a 4-year 
period.
``(C) Payment for services provided by freestanding 
birth centers.--
``(i) In general.--During the first 16 
fiscal quarter period (or any portion of such 
period) that the State participates in the 
demonstration program, the Secretary shall pay 
a State participating in a demonstration 
program under this subsection the Federal 
matching percentage specified in clause (ii) 
for amounts expended by the State to provide 
freestanding birth center services that meet 
the criteria established under paragraph 
(2)(A)(i) and are furnished by a freestanding 
birth center in accordance with the prospective 
payment system for such services established by 
the State pursuant to the guidance issued under 
paragraph (2)(A)(ii) to individuals who are 
enrolled in the State Medicaid program.
``(ii) Federal matching percentage.--
Subject to clause (iii), the Federal matching 
percentage specified in this clause is, with 
respect to medical assistance described in 
clause (i) that is furnished by a State 
participating in an ongoing demonstration 
program under this subsection--
``(I) to a newly eligible 
individual described in paragraph (2) 
of section 1905(y), the matching rate 
applicable under paragraph (1) of that 
section (as increased under section 
1905(ii), if applicable); and
``(II) to an individual who is not 
a newly eligible individual (as so 
described) but who is eligible for 
medical assistance under the State 
Medicaid program, the enhanced FMAP 
applicable to the State.
``(iii) Application of higher match.--
Clause (ii) shall not apply in the case of 
State expenditures described in such clause if 
the application of such clause would result in 
a lower Federal medical assistance percentage 
for such expenditures than would otherwise 
apply without the application of such clause.
``(iv) Limitation.--Payments shall be made 
under this subparagraph to a State only for 
amounts expended by the State to provide 
medical assistance for freestanding birth 
center services that are described in the 
demonstration program application submitted by 
the State and approved by the Secretary.
``(v) Administrative expenses.--Amounts 
expended by a State to conduct a demonstration 
program in accordance with this paragraph shall 
be considered, for purposes of subsection 
(a)(7), to be necessary for the proper and 
efficient administration of the State plan.
``(D) Waiver of statewideness requirement.--The 
Secretary shall waive the requirements of section 
1902(a)(1) (relating to Statewideness), section 
1902(a)(10)(B) (relating to comparability), and any 
other provision of this title which would be directly 
contrary to the authority under this subsection as may 
be necessary for a State to conduct a demonstration 
program in accordance with this paragraph.
``(E) Annual reports.--
``(i) In general.--Not later than 2 years 
after the date on which the first State is 
selected to conduct a demonstration program 
under this subsection, and annually thereafter, 
based on information and data submitted by 
States in accordance with the assurance 
provided under paragraph (2)(A)(iii)(III)(ff), 
the Secretary shall submit to Congress an 
annual report on all State demonstration 
programs conducted under this subsection. Each 
such report shall include with respect to each 
such State demonstration program--
``(I) an assessment of clinical 
outcomes for maternity services 
provided by freestanding birth centers 
participating in the demonstration 
program for individuals who are 
eligible for medical assistance under a 
State plan under this title or under a 
waiver of such plan and are women with 
a low-risk pregnancy with outcomes in 
comparable demographic and geographic 
areas, including with respect to--
``(aa) the number of births 
and data on intrapartum and 
postpartum maternal and newborn 
transfer rates and hospital 
admissions; and
``(bb) the rate of primary 
and repeat cesarean sections, 
preterm births, and neonatal 
intensive care unit admissions; 
and
``(II) an assessment of the impact 
of all the State demonstration programs 
conducted under this subsection on the 
Federal and State costs relating to 
providing freestanding birth center 
services for individuals who are 
eligible for medical assistance under a 
State plan under this title or under a 
waiver of such plan and are women with 
a low-risk pregnancy (including with 
respect to the provision of inpatient, 
emergency, and ambulatory services) and 
newborn care, compared to the Federal 
and State costs related to the 
provision of--
``(aa) freestanding birth 
center services to such 
individuals by freestanding 
birth centers outside of such 
demonstration programs; and
``(bb) traditional 
maternity services as provided 
in non-birth center clinics and 
hospital programs.
``(ii) Recommendations.--Not later than 6 
months after the end of the third year of the 
demonstration program conducted under this 
subsection, the Secretary shall submit to 
Congress recommendations concerning whether 
such demonstration program should be continued, 
expanded, modified, or terminated.
``(4) Funding.--
``(A) In general.--Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to 
the Secretary--
``(i) for purposes of carrying out 
paragraph (2)(B), $3,000,000; and
``(ii) for purposes of carrying out the 
demonstration programs described in paragraph 
(3), $24,000,000, to be appropriated at the 
rate of $6,000,000 per year for 4 years.
``(B) Availability.--Funds appropriated under 
subparagraph (A) shall remain available until expended.
``(5) Definitions.--In this subsection:
``(A) Freestanding birth center services.--The term 
`freestanding birth center services' has the meaning 
given that term under section 1905(l)(3)(A) and 
includes such other services as the Secretary shall 
determine for purposes of conducting the demonstration 
programs described in paragraph (3).
``(B) Low-risk pregnancy.--The term `low-risk 
pregnancy' means an uncomplicated singleton term 
pregnancy with a vertex presentation with an expected 
uncomplicated birth.''.
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