New Jersey's Lifeline Medical Associates was one of the first obstetrics and gynecology providers to sign onto UnitedHealthcare's first bundled payment program for maternity care in 2019.
But not long after the partnership had taken off, it crash-landed.
Dr. Jack Feltz, Lifeline's president, said UnitedHealthcare added a fee to its commercial maternity bundle that absorbed the return that would otherwise have gone to his practice, which has 180 providers across New Jersey and Delaware.
"It didn't leave much meat on the bone for the providers," Feltz said, adding that he's hoping to resurrect the program.
UnitedHealthcare said it no longer offers that particular bundle program, but it does have others for maternity care.
Both insurers and providers insist they like the idea of lump sum payments for prenatal care, delivery and postpartum care, but it gets complicated in the real world. Unlike a hip or knee replacement, maternity care can span a year and involve many different types of providers. And then, there's the usual push and pull between the insurers and providers, who both expect to pocket the savings.
Today, several insurers offer maternity bundles both in their commercial and Medicaid programs, including Cigna, Humana, Blue Cross Blue Shield plans and Anthem. Even so, it's clear bundled maternity payments haven't taken off at the same rate as orthopedic or cardiac procedures.
The cost of childbirth is higher in the U.S. compared with other countries. Experts have for years debated how to fix the problem, but with little success. Childbirth admissions averaged $13,811 for people with employer-sponsored insurance in 2016 and 2017, ranging from $8,361 in Arkansas up to $20,000 in New York, according to the Health Care Cost Institute.
A common hang-up on the provider side is the bundles tend to base payment on a provider's historical costs instead of the typical rate in their market, said Dr. Mark Cone, president of Privia Medical Group-Gulf Coast in Texas, another early adopter of UnitedHealthcare's maternity bundle. The problem with this approach is if a provider is already delivering services significantly below the market rate, it cancels out their financial reward, he said.