The Keeping Obstetrics Local Act aims to stabilize rural and safety-net maternity care by increasing Medicaid/CHIP payments, expanding comprehensive coverage for new mothers, deploying emergency workforce support, and mandating transparency around unit closures.
Suzanne Bonamici
Representative
OR-1
The Keeping Obstetrics Local Act aims to stabilize and expand access to maternity care by increasing financial support for rural and safety-net hospitals providing obstetric services. It mandates comprehensive coverage expansion for pregnant and postpartum individuals under Medicaid and CHIP, while also investing in the maternal health workforce through emergency staffing support and streamlined cross-state provider enrollment. Finally, the bill increases transparency by requiring timely public notification and detailed data reporting before any hospital maternity unit closes.
Keeping Obstetrics Local Act: Hospitals Get Anchor Payments, Expectant Parents Get 12 Months of Full Coverage
If you’ve ever lived in a small town or a rural area, you know the panic that hits when the local hospital announces it’s closing its maternity ward. This bill, the Keeping Obstetrics Local Act, is a massive effort to stop that from happening and make sure pregnant people get comprehensive care for a full year.
The core of the bill is simple: stabilize the finances of rural hospitals and safety-net providers that handle births, and dramatically expand Medicaid/CHIP coverage for those who are pregnant or recently gave birth. It does this by mandating cost studies, setting higher minimum payment rates for maternity services starting in Fiscal Year 2027, and ensuring continuous, full-benefit coverage for 12 months post-pregnancy.
The Anchor Payment Lifeline for Small Wards
The biggest financial fix is the creation of "anchor payments" for hospitals that have fewer than 300 births a year (SEC. 104). Think of this as a guaranteed minimum income for the maternity ward. Starting in Fiscal Year 2028, states must pay these low-volume hospitals the difference between what they actually receive from Medicaid/CHIP and a calculated "labor and delivery revenue floor." This floor includes a fixed "standby capacity amount" of $1.2 million, plus $10,000 per delivery, adjusted for inflation.
Why does this matter? It means the hospital in your county can keep its lights on and its staff trained, even if it only handles 10 births a month. This payment is designed to cover the fixed costs of keeping a fully equipped labor and delivery unit ready 24/7. However, to get this money, the hospital must sign a contract agreeing to keep the unit open for the next two fiscal years. If they close early, the state can claw back the entire payment, prioritizing that recovery in bankruptcy court (SEC. 104).
Guaranteed Full Coverage for the Full Year
For anyone who is or plans to be pregnant and relies on Medicaid or CHIP, this is a game-changer (SEC. 201). Currently, states have some flexibility to limit Medicaid coverage for pregnant individuals to only pregnancy-related services. This bill eliminates that option. Instead, if you qualify for Medicaid based on pregnancy, you must receive full benefits—not just limited care—and that coverage must be continuous for the entire pregnancy plus the full 12 months postpartum.
This means if you're a new parent, you won't lose access to essential health services, including mental health care, just a few weeks after delivery. The bill also boosts federal funding for states to provide standardized depression and anxiety screenings during the perinatal and postpartum periods, recognizing that mental health is a critical part of maternal care (SEC. 204). Furthermore, the bill mandates that states offer presumptive eligibility for pregnant individuals, meaning you get coverage immediately based on preliminary information, without waiting for the full paperwork to clear (SEC. 205).
Transparency and the Closure Watchdog
If a hospital decides to shut down its labor and delivery unit, they can’t just put up a sign on the door anymore (SEC. 401). Starting 180 days after the law is enacted, hospitals must notify the federal government and the state 180 days before the closure. Crucially, they must also provide a detailed impact analysis explaining how the closure will hurt the community, how they plan to fill the gap, and why they’re closing. The state must then make this impact report publicly available.
This is a huge win for transparency. If your local hospital is considering a closure, the community will have six months notice and a detailed report explaining the consequences, giving local leaders time to react and organize. The bill also requires hospitals to start reporting detailed data on their labor and delivery services, including C-section rates, staffing levels, and revenue sources, when they file their Medicare cost reports (SEC. 402). This means we’ll finally get a clearer picture of where the money goes and what services are actually being provided.
Building the Workforce and Cutting Red Tape
To address staffing shortages, the bill throws $150 million annually into the Commissioned Corps starting in Fiscal Year 2027 to deploy personnel during "urgent maternal health care needs"—like when a hospital is closing or has lost too many staff (SEC. 301). This provides a temporary, federally funded lifeline to keep services running.
It also tackles the headache of cross-state licensing. If you live near a state border, it can be tough to see a specialist across the line. The bill streamlines the enrollment process for out-of-state maternity providers (like doctors and midwives) who want to accept your state's Medicaid/CHIP. If they are already screened by Medicare or their home state’s Medicaid, enrollment is expedited for five years, making it easier to access critical care just a few miles away (SEC. 302).