(a) State study
(1) In general
Not later than 30 months after February 3, 2026, and every 5 years thereafter, each State (as such term is defined in section
1301(a)(1) of this title for purposes of subchapters XIX and XXI of this chapter) shall conduct a study on the costs of providing maternity, labor, and delivery services in applicable hospitals (as defined in paragraph (3)) and submit the results of such study to the Secretary of Health and Human Services (referred to in this section as the "Secretary") in such form and manner as the Secretary requires.
(2) Content of study
A State study required under paragraph (1) shall include the following information (to the extent practicable and as further defined by the Secretary) with respect to maternity, labor, and delivery services furnished by applicable hospitals located in the State:
(A) An estimate of the cost of providing maternity, labor, and delivery services at applicable hospitals, based on the expenditures a representative sample of such hospitals incurred for providing such services during the 2 most recent years for which data is available.
(B) An estimate of the cost of providing maternity, labor, and delivery services at hospitals that would be applicable hospitals (as defined in paragraph (3)) if not for ceasing to provide labor and delivery services within the past 5 years, based on the expenditures a representative sample of such hospitals incurred for providing such services during the 2 most recent years for which data is available.
(C) To the extent data allow, an analysis of the extent to which geographic location, community demographics, and local economic factors (as defined by the Secretary) affect the cost of providing maternity, labor, and delivery services at applicable hospitals described in subparagraphs (A) and (B), including the cost of services that support the provision of maternity, labor, and delivery services.
(D) The amounts applicable hospitals are paid for maternity, labor, and delivery services, by geographic location and hospital size, under—
(i) parts A and B of the Medicare program;
(ii) the State Medicaid program, including payment amounts for such services under fee-for-service payment arrangements and under managed care (as applicable);
(iii) the State CHIP plan, including payment amounts for such services under fee-for-service payment arrangements and under managed care (as applicable); and
(iv) private health insurance.
(E) A comparative payment rate analysis—
(i) comparing payment rates for maternity, labor, and delivery services (inclusive of all payments received by applicable hospitals for furnishing maternity, labor, and delivery services) under the State Medicaid fee-for-service program to such payment rates for such services under Medicare (including those described in paragraphs (2) and (3) of section
447.203(b) of title 42, Code of Federal Regulations), and, to the extent data is available, such payment rates for such services under Medicaid managed care and private health insurers within geographic areas of the State; and
(ii) analyzing different payment methods for such services, such as the use of bundled payments, quality incentives, and low-volume adjustments.
(F) An evaluation, using such methodology and parameters established by the Secretary, of whether each hospital located in the State that furnishes maternity, labor, and delivery services is expected to experience in the next 3 years significant changes in particular expenditures or types of reimbursement for maternity, labor, and delivery services.
(3) Applicable hospital defined
For purposes of this subsection, the term "applicable hospital" means any hospital located in a State that meets either of the following criteria:
(A) The hospital provides labor and delivery services and more than 50 percent of the hospital's births (in the most recent year for which such data is available) are financed by the Medicaid program or CHIP.
(B) The hospital—
(i) is located in a rural area (as defined by the Federal Office of Rural Health Policy for the purpose of rural health grant programs administered by such Office);
(ii) based on the most recent 2 years of data available (as determined by the Secretary), furnished services for less than an average of 300 births per year; and
(iii) provides labor and delivery services.
(4) Assistance to small hospitals in compiling cost information
There are appropriated to the Secretary for fiscal year 2026, $10,000,000 for the purpose of providing grants and technical assistance to a hospital described in paragraph (3)(B) to enable such hospital to compile detailed information for use in the State studies required under paragraph (1), to remain available until expended.
(5) HHS report on State studies
For each year in which a State is required to conduct a study under paragraph (1), the Secretary shall issue, not later than 18 months after the date on which the State submits to the Secretary the data described in such paragraph, a publicly available report that compiles and details the results of such study and includes the information described in paragraph (2).
(b) HHS report on national data collection findings
Not later than 3 years and 6 months after February 3, 2026, the Secretary shall submit to Congress, and make publicly available, a report analyzing the first studies conducted by States under subsection (a)(1), including recommendations for improving data collection on the cost of providing maternity, labor, and delivery services.
(c) Implementation funding
In addition to the amount appropriated under subsection (a)(4), there are appropriated, out of any funds in the Treasury not otherwise obligated, $3,000,000 for fiscal year 2026, to remain available until expended, to the Secretary of Health and Human Services for purposes of implementing this section.