The Louisville, Ky.-based insurer joins a small but growing group of payers bundling childbirth services. Cigna announced a similar program in January and Horizon Blue Cross and Blue Shield of New Jersey has offered a maternity-care bundle since 2013.
Payers and providers are increasingly looking to bundle maternity-care services because of the potential for cost savings. Pregnancy and childbirth are the most common reasons for hospitalizations in the U.S. and research shows that costs for those services vary significantly by hospital and between payers. The quality of care that mothers and babies receive is also mixed. The U.S. has the highest maternal mortality rate among developed nations, and the preterm birth rate rose for the second-straight year in 2016.
Under Humana's model, the physicians' cost targets are determined by the average costs per year for pregnancies at their practice. The model also monitors performance on three quality measures: uncomplicated C-section rate, preterm birth rate and C-section rate for women giving birth for the first time. Targets for the quality measures are set by average performance in the state where the physician practices.
The bundled payment will be triggered upon a Humana members' admission to the hospital for labor and delivery. The bundled services include all of the mother's prenatal visits during a 200-day period prior to the birth, the delivery of the baby and 45 days after discharge.
Stice said pregnancy "is such a long event that it lends itself well to a bundled payment."
Humana doesn't yet know how many members will be included in the program. Low- to moderate-risk pregnancies, which are determined using claims data after delivery, were targeted specifically for the model because such pregnancies are easier for physicians to control, Stice said.
The maternity-care program is the second bundled-payment model for Humana. The payer also has a bundled-payment option for total hip or knee joint-replacement procedures.
The Medicaid sector has been ahead of the curve compared with private payers in adopting bundled-payment options for maternity care. There are several states in which an episode-based model is available. Medicaid accounted for roughly 45% of the nation's births in 2010.
The model gives physicians an incentive to lower costs for maternity care because they won't be paid more for delivering via C-section, which is reimbursed at a higher rate traditionally, said Suzanne Delbanco, executive director at the Catalyst for Payment Reform. About 32% of all deliveries in the U.S. in 2016 were C-sections even though the World Health Organization reports C-section rates higher than 10% are not associated with reductions in maternal and newborn mortality rates.
"It's very exciting to see movements in this area," Delbanco said. "For years, employers have been pushing payers to be bolder in how they are addressing shortcomings in maternity care in this country, and a program of this scale is very exciting."
But the model's design is critical to its success in effectively lowering costs, she added. If the cost targets the physicians must hit under the bundle are similar to average C-section delivery costs, it won't encourage providers to change behavior.
Humana used C-sections and vaginal births when it determined the average cost targets under the model.
The five physician practices that have voluntarily agreed to be in the program are OB/GYN Associates of Southern Indiana, Mid America Physician Services in Kansas, Seven Hills Women's Health Centers in Ohio, TriHealth in Ohio and Consultants in Women's Health in Texas.
Clarification: This story has been updated to reflect WHO's data on C-section rates. WHO does not recommend specific C-section rates.
