I 
117TH CONGRESS 
1ST SESSION H. R. 3337 
To require the Secretary of Health and Human Services to establish a 
Medicaid demonstration program to develop and advance innovative pay-
ment models for freestanding birth center services for women with a 
low-risk pregnancy, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 19, 2021 
Ms. CLARK of Massachusetts (for herself, Ms. HERRERA BEUTLER, Ms. ROY-
BAL-ALLARD, and Mrs. HINSON) introduced the following bill; which was 
referred to the Committee on Energy and Commerce 
A BILL 
To require the Secretary of Health and Human Services 
to establish a Medicaid demonstration program to de-
velop and advance innovative payment models for free-
standing birth center services for women with a low- 
risk pregnancy, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Birth Access Bene-
fiting Improved Essential Facility Services Act’’ or the 
‘‘BABIES Act’’. 
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SEC. 2. MEDICAID DEMONSTRATION PROGRAM TO IM-
PROVE FREESTANDING BIRTH CENTER SERV-
ICES. 
Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended by adding at the end the following: 
‘‘(bb) DEMONSTRATION
PROGRAM
TO
IMPROVE 
FREESTANDING BIRTH CENTER SERVICES.— 
‘‘(1) AUTHORITY.—The Secretary shall estab-
lish a demonstration program for the purpose of 
identifying ways to improve access to, and the qual-
ity and scope of, freestanding birth center services 
for women with a low-risk pregnancy. 
‘‘(2) DEADLINES FOR CENTERS PARTICIPATION 
CRITERIA, PROSPECTIVE PAYMENT SYSTEM; PLAN-
NING GRANTS.— 
‘‘(A) PARTICIPATION
AND
PROSPECTIVE 
PAYMENT SYSTEM DEADLINE.—Not later than 
one year after the date of the enactment of this 
subsection, the Secretary shall do the following: 
‘‘(i) PUBLICATION OF PARTICIPATION 
CRITERIA FOR FREESTANDING BIRTH CEN-
TERS.— 
‘‘(I) IN GENERAL.—Publish cri-
teria for a freestanding birth center to 
be certified by a State for purposes of 
participating in a State demonstration 
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program conducted under this sub-
section. 
‘‘(II) REQUIREMENTS.—The cri-
teria required to be published under 
subclause (I) shall include the fol-
lowing: 
‘‘(aa) 
ACCREDITATION.—A 
freestanding birth center must 
have a current accreditation cre-
dential from an approved nation-
ally recognized birth center ac-
creditation body, as determined 
by the Secretary. 
‘‘(bb) 
LICENSURE
AND 
OTHER REQUIREMENTS.—A free-
standing birth center shall— 
‘‘(AA) be licensed, or 
otherwise approved, by the 
State to provide prenatal, 
labor 
and 
delivery, 
postpartum, newborn care, 
and other ambulatory serv-
ices that are included in the 
State 
Medicaid 
program; 
and 
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‘‘(BB) 
comply 
with 
such other requirements re-
lating to the health and 
safety of individuals who re-
ceive services furnished by 
the facility as the State shall 
establish. 
‘‘(cc) 
CARE
COORDINA-
TION.—A freestanding birth cen-
ter shall be able to meet care co-
ordination requirements, includ-
ing requirements to coordinate 
care across settings and pro-
viders to ensure seamless transi-
tions for patients across the full 
spectrum of health services, and 
engage in consultation for higher 
level maternity care services, 
non-maternity care services, and 
behavioral 
health 
needs, 
and 
which may include plans for con-
sultation, collaboration and refer-
ral, and arrangements with the 
following: 
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‘‘(AA) Federally-quali-
fied health centers (and as 
applicable, rural health clin-
ics) to provide Federally- 
qualified health center serv-
ices (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 obstet-
rical care units. 
‘‘(dd) 
SCOPE
OF
SERV-
ICES.—As determined by the Sec-
retary, a freestanding birth cen-
ter must be able to provide 
peripartum care for women with 
a low-risk pregnancy and for 
newborns, consistent with evi-
dence-based guidelines. 
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‘‘(ee) 
CAPABILITIES.—A 
freestanding birth center shall 
have the following: 
‘‘(AA) 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 emer-
gency 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 receiv-
ing hospital with an obstet-
rical care unit with policies 
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and procedures for timely 
transport. 
‘‘(CC) 
Medical 
con-
sultation available from a li-
censed board-certified physi-
cian with admitting privi-
leges in obstetrics at a near-
by hospital. 
‘‘(DD) Data collection, 
storage, and retrieval, in-
cluding data on intrapartum 
and postpartum maternal 
and newborn transfer rates 
and hospital admissions. 
‘‘(EE) The ability to 
initiate and document qual-
ity improvement programs 
as required by accreditation 
that include efforts to maxi-
mize patient safety, such as 
safety checklists, validated 
training and competency of 
staff, and emergency pre-
paredness and drills. 
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‘‘(gg) NON-DUPLICATION.— 
In carrying out this subsection, 
the Secretary shall, to the great-
est extent practicable, prevent 
the duplication of services cov-
ered under this subsection with 
services otherwise covered under 
the State plan under this title 
and prevent payment under a 
demonstration 
program 
under 
paragraph (3) for services for 
which payment is otherwise made 
under the State plan under this 
title. 
‘‘(ii) GUIDANCE ON DEVELOPMENT OF 
PROSPECTIVE
PAYMENT
SYSTEM
FOR 
TESTING
UNDER
STATE
DEMONSTRATION 
PROGRAMS.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall issue guidance for States 
participating in a demonstration pro-
gram conducted under paragraph (3) 
to establish a prospective payment 
system that shall only apply to free-
standing birth center services that 
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meet the criteria established under 
clause (i) furnished by a freestanding 
birth center participating in such 
demonstration program. 
‘‘(II) 
REQUIREMENTS.—The 
guidance issued by the Secretary 
under subclause (I) shall, to the 
greatest extent practicable, provide 
for— 
‘‘(aa) partial facility pay-
ment based on units in the case 
that a pregnant woman is admit-
ted in labor and then needs to be 
transferred to the hospital in 
labor before the birth of the 
baby; 
‘‘(bb) facility payment for 
observation short stays to rule 
out labor or for therapeutic rest; 
‘‘(cc) ensuring payment for 
the newborn and mother as two 
facility payment components; 
‘‘(dd) ensuring payment for 
nitrous oxide and hydrotherapy 
supplies costs for pain relief; 
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‘‘(ee) ensuring payment for 
all professional services of health 
professionals involved in the de-
livery of care in a birth center 
which may include 3 or more of-
fice visits; observation and triage; 
newborn exam and care; and 
multiple postpartum, mother, and 
baby 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 client returning for 
postpartum care in the birth cen-
ter; 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 
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through prenatal care, labor 
and delivery, and ends 60 
days postpartum, inclusive 
of at least 2 postpartum 
care visits; and 
‘‘(BB) in the case of a 
newborn, a period that con-
tinues through the first 28 
days of life. 
‘‘(B) PLANNING GRANTS.— 
‘‘(i) IN GENERAL.—Not later than 18 
months after the date of the enactment of 
this subsection, the Secretary shall award 
planning grants to States for the purpose 
of developing proposals to conduct a dem-
onstration program described in paragraph 
(3). 
‘‘(ii) USE OF FUNDS.—A State award-
ed a planning grant under this subpara-
graph shall use the funds awarded under 
such grant to— 
‘‘(I) solicit input with respect to 
the development of the demonstration 
program from patients, providers (in-
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cluding certified nurse-midwives and 
physicians) and other stakeholders; 
‘‘(II) secure participation of free-
standing birth centers that meet the 
criteria established under subpara-
graph (A)(i), including by providing 
support for such centers to meet that 
criteria in order to maximize the num-
ber of freestanding birth centers par-
ticipating in the demonstration pro-
gram; and 
‘‘(III) in accordance with the 
guidance issued under subparagraph 
(A)(ii), establish a prospective pay-
ment system which States must use 
for making payments to freestanding 
birth centers participating in the dem-
onstration program. 
‘‘(3) STATE DEMONSTRATION PROGRAMS.— 
‘‘(A) IN
GENERAL.—Not later than 24 
months after the date of the enactment of this 
subsection, from among the States awarded a 
planning grant under paragraph (2)(B), the 
Secretary shall select not more than 6 such 
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States to conduct demonstration programs that 
meet the requirements of this paragraph. 
‘‘(B) APPLICATION REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall solicit applications to conduct a dem-
onstration program under this subsection 
from States awarded planning grants 
under paragraph (2)(B). 
‘‘(ii) 
REQUIRED
INFORMATION.—A 
State application to conduct a demonstra-
tion program under this paragraph shall 
include the following: 
‘‘(I) A description of the target 
Medicaid population to be served 
under the demonstration program. 
‘‘(II) A list of the participating 
freestanding birth centers in the 
State. 
‘‘(III) Verification that each par-
ticipating freestanding birth center 
meets the participation criteria estab-
lished in paragraph (2)(A)(i). 
‘‘(IV) A description of the scope 
of the freestanding birth center serv-
ices available under the State Med-
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icaid program for women with a low- 
risk pregnancy that will be paid for 
under the prospective payment system 
tested in the demonstration program. 
‘‘(V) Verification that the State 
has agreed to pay for such services at 
the rate established under the pro-
spective payment system. 
‘‘(VI) An assurance that the 
State will require freestanding birth 
centers to submit to the State, and 
that the State will submit to the Sec-
retary, such information and data as 
the State or Secretary may require re-
lating to the demonstration program 
or an episode of care for such a preg-
nant woman or newborn. 
‘‘(VII) 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. 
‘‘(C) LENGTH
OF
DEMONSTRATION
PRO-
GRAMS.—A State selected to conduct a dem-
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onstration program under this paragraph shall 
conduct the program for a 4-year period. 
‘‘(D) REQUIREMENTS
FOR
SELECTING 
DEMONSTRATION
PROGRAMS.—In 
selecting 
States to conduct demonstration programs 
under this paragraph, the Secretary shall— 
‘‘(i) ensure States meet the criteria 
described in paragraph (2)(A)(i)(II); 
‘‘(ii) ensure that the States represent 
a diverse selection of geographic areas, in-
cluding rural and underserved areas; and 
‘‘(iii) give preference to States that 
demonstrate the potential to expand the 
availability of and access to maternity care 
services in a demonstration area and in-
crease the quality of services provided by 
freestanding birth centers without increas-
ing net Federal spending. 
‘‘(E) PAYMENT FOR SERVICES PROVIDED 
BY FREESTANDING BIRTH CENTERS.— 
‘‘(i) 
IN
GENERAL.—Amounts 
ex-
pended by a State to conduct a demonstra-
tion program under this paragraph shall be 
treated as medical assistance for purposes 
of subsection (a) of this section. Under a 
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demonstration program conducted under 
this paragraph by a State, payments shall 
be made by the State for freestanding 
birth center services that meet the criteria 
established under paragraph (2)(A)(i) fur-
nished by a freestanding birth center in ac-
cordance with the prospective payment sys-
tem for such services established pursuant 
to the guidance issued under paragraph 
(2)(A)(ii). 
‘‘(ii) LIMITATIONS.—Payments shall 
be made under this subparagraph to a 
State only for freestanding birth center 
services that are— 
‘‘(I) described in the demonstra-
tion program application submitted by 
the State and approved by the Sec-
retary; and 
‘‘(II) provided to an individual 
who is eligible for medical assistance 
under the State Medicaid program. 
‘‘(iii) PROHIBITED
PAYMENTS.—Un-
less included as part of a payment pro-
vided under a prospective payment system 
established by a State for the demonstra-
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tion program pursuant to the guidance 
issued under paragraph (2)(A(ii), no pay-
ment shall be made under this subpara-
graph for inpatient care or other non-am-
bulatory services, as determined by the 
Secretary. 
‘‘(F) WAIVER
OF
STATEWIDENESS
RE-
QUIREMENT.—The Secretary shall waive section 
1902(a)(1) (relating to statewideness) as may 
be necessary for a State to conduct a dem-
onstration program in accordance with the re-
quirements of this paragraph. 
‘‘(G) ANNUAL REPORTS.— 
‘‘(i) IN GENERAL.—Not later than 2 
years after the date on which the first 
State is selected to conduct a demonstra-
tion program under this paragraph, and 
annually thereafter, based on information 
and data submitted by States in accord-
ance with the assurance provided under 
subparagraph (B)(ii)(VI), the Secretary 
shall submit to Congress an annual report 
on all State demonstration programs con-
ducted under this paragraph. Each such 
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report shall include with respect to each 
such State demonstration program— 
‘‘(I) an assessment of clinical 
outcomes for maternity services pro-
vided by freestanding birth centers 
participating in the demonstration 
program compared to outcomes for 
low-risk pregnancy Medicaid patients 
in comparable demographic and geo-
graphic areas, including with respect 
to the number of births and data on 
intrapartum and postpartum maternal 
and newborn transfer rates and hos-
pital admissions; and 
‘‘(II) an assessment of the im-
pact of all the State demonstration 
programs conducted under this para-
graph on the Federal and State costs 
relating to providing freestanding 
birth center services for women with a 
low-risk pregnancy (including with re-
spect to the provision of inpatient, 
emergency, and ambulatory services) 
and newborn care, compared to the 
Federal and State costs related to the 
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provision of freestanding birth center 
services by freestanding birth centers 
outside of such demonstration pro-
grams. 
‘‘(ii) RECOMMENDATIONS.—Not later 
than the end of the third year of the dem-
onstration program established under this 
subsection, the Secretary shall submit to 
Congress 
recommendations 
concerning 
whether the demonstration programs under 
this paragraph should be continued, ex-
panded, 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 para-
graph (2)(B), $2,000,000; and 
‘‘(ii) for purposes of carrying out the 
demonstration programs under paragraph 
(3), $25,000,000. 
‘‘(B) AVAILABILITY.—Funds appropriated 
under subparagraph (A) shall remain available 
until expended. 
‘‘(5) DEFINITIONS.—In this subsection: 
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‘‘(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 the demonstration programs con-
ducted under paragraph (3). 
‘‘(B) LOW-RISK
PREGNANCY.—The term 
‘low-risk pregnancy’ means an uncomplicated 
singleton term pregnancy with a vertex presen-
tation with an expected uncomplicated birth.’’. 
Æ 
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