New maternity billing codes take effect January 1, 2027. Centers for Medicare & Medicaid Services’ (CMS’s) final Medicare Physician Fee Schedule, expected in November 2026, should clarify the cost and implementation effects for employers. This blog covers Medicare’s proposed payment amounts for maternity care services, what remains unknown about final amounts and how the Medicare fee schedule affects commercial insurance fee schedules.

What Is Changing in 2027?

Effective January 1, 2027, the American Medical Association (AMA) Current Procedural Terminology (CPT^®) code set will replace global “bundled” maternity care codes with “unbundled” codes for separate services. Today, the global maternity care codes represent nearly ten months of care in a “one-size-fits-all” payment, and those global codes will be deleted. The new codes will bill visits separately throughout four phases of care: prenatal care, labor management, delivery and postpartum care. Learn more about the code changes in this Word on Benefits^® blog.

One-Minute Summary

What don’t we know yet? Employers still need to know whether Medicare will adopt separate billing or retain a global payment option, whether CMS will finalize the proposed payment shift toward labor and delivery, how costs could change and how commercial insurers will respond.

What happens next? CMS is expected to provide answers about its coding approach and payment values in the 2027 Medicare Physician Fee Schedule final rule expected in November 2026.

What Will the CMS Final Rule Decide?

CMS sets Medicare payment amounts for medical billing codes each year. On July 14, 2026, CMS released the 2027 Medicare Physician Fee Schedule Proposed Rule. CMS does not have to follow the CPT approach. The November 2026 final rule should confirm whether CMS will adopt the new CPT codes or preserve a global payment option, set final Medicare payment amounts, and decide whether to retain the proposed shift in payment toward labor and delivery.

How CMS Proposes to Shift Maternity Payments

How Many Prenatal Visits Does CMS Assume?

CMS based its proposed rule partly on updated guidance that assumes fewer prenatal visits for an average-risk pregnancy.

The proposed rule states, “In May 2025, the American College of Obstetricians and Gynecologists (ACOG) published new clinical guidelines, recommending that obstetrician-gynecologists and other maternity care professionals tailor the visit frequency and monitoring schedule to the needs of the pregnant woman. These new clinical guidelines provide a sample schedule for prenatal care services and visit frequency, which describes eight visits for average-risk pregnant women … and 13 visits for pregnant women with greater-than-average risk. This sample schedule specifies that additional services may be offered as needed throughout the pregnancy.”

The AMA’s payment recommendation to CMS, however, assumed 12 prenatal visits “in the calculations to make these changes budget-neutral despite the revisions to the [ACOG] guidelines suggesting that 12 visits would no longer be typical,” the proposed rule says.

How Would CMS Redistribute Payment?

CMS proposed removing four prenatal visits from its payment calculation and shifting that value to labor management and delivery codes. Labor management and delivery code values would rise by about 15%, while prenatal and postpartum visit values would fall. CMS’s intent is to align payment with fewer visits for an average-risk pregnancy while continuing to cover medically necessary care.

What Does Budget-Neutral Mean for Employer Plans?

A Manatt Health insight states, “The AMA has modeled the unbundling as budget-neutral nationally; however, neutrality at a national level does not guarantee neutrality for [health plans]. For example, entities serving higher-acuity or more medically complex maternal populations may experience higher utilization and spending, while those with lower-risk populations could see more modest or even reduced spending.” Budget neutrality assumes that lower payments for low-risk pregnancies will offset higher payments for high-risk pregnancies. That may not be true for every employer plan. Results will depend on the plan’s maternity population and use of services.

Will CMS Preserve a Global Payment Option?

In its proposal, CMS has concerns that adopting the new CPT codes “would be disruptive based on how the longstanding existing code structure is currently accounted for in clinical practice patterns. [CMS is] seeking comment on whether CMS should create HCPCS G-codes that would maintain the current coding and payment for maternity services to ameliorate this concern, while we continue to consider the potential impact that changes in the maternity care code family have on clinical outcomes for maternal care. These codes would be used in lieu of adoption of the new CPT codes for purposes of Medicare payment.”

What Are G-Codes?

CMS uses G-codes when existing billing codes do not meet Medicare’s needs. Other insurers may use them, but they are not part of the CPT code set.

Two Possible Coding and Payment Paths

In Maven’s September 16, 2026 webcast, “Countdown to Unbundling: What You Need to Know for 2027,” Dr. Neel Shah, chair of Scientific Advisory Board at Maven Clinic, explained the two options that CMS may use for coding and payment structure and how these could impact employers, providers, insurers and patients.

Option 1: Keep a Global Payment Option Alongside Separate Billing

Overall impact: Keeping a global payment option alongside separate billing could ease the immediate transition but create inconsistent billing approaches, slower adoption and greater uncertainty for stakeholders.

Employers: Employer plans could face different billing approaches across insurers, providers and markets. That could make claims data, costs and implementation timelines harder to compare.

Insurers: If a global payment option remains available, insurers could decide whether and when to adopt separate billing. This choice may slow adoption as insurers wait to see how the market responds, Dr. Shah said. If an insurer retains global billing while providers submit separate claims, payment and contract disputes could follow. Results may vary by market and by the negotiating power of insurers and providers.

Providers: Comments on the proposed rule showed that physician groups opposed a global option. Providers could face the cost and confusion of maintaining two billing and coding systems. They also argue that retaining global billing could undermine the CPT code change’s goal of improving maternal health outcomes.

Patients: ACOG President Dr. Camille A. Clare explained the concern in this statement: “ACOG is concerned that … if the G-codes are implemented, patients will be divided into two groups: those whose insurers decide to unbundle maternity care and those whose insurers choose not to. This presents a real risk of worsening obstetric care disparities when maternal mortality and morbidity remain unacceptably high and creates a barrier to continued progress to improve maternal health outcomes.”

Option 2: Require Separate Billing for All Maternity Care

Overall impact: Requiring separate billing could provide earlier visibility into claims activity and clinical outcomes. It could also increase administrative work, billing errors and denied claims for employers, providers, insurers and patients, Dr. Shah explained.

Employers: Separate billing may increase the risk of upcoding, which “occurs when a diagnosis or procedure code is assigned at a higher severity, complexity, or reimbursement level than is supported by the associated medical record, clinical evidence, and applicable coding guidelines,” according to Milliman. Upcoding could cause employers to pay for care that the medical record does not support.

Insurers: Insurers would need to update claims systems and revise contracts, reimbursement rates and claim edits. More codes could also increase the number of claims requiring medical-necessity review.

Providers: More complex billing could raise administrative costs. Providers may not know early in a pregnancy whether it will become high risk, making revenue harder to predict. Providers anticipate revenue reductions of 20% to 30%, Dr. Shah said during the webcast.

Patients: Patients could face more bills, billing errors or denied claims. Separate billing may also provide better information about the services they receive and related outcomes.

Why Medicare’s Decision Matters to Employer Plans

Commercial insurers negotiate their own rates with providers, but they may base those rates on Medicare. The difference between Medicare and private insurance rates varies by market and reflects the negotiating power of hospitals and local insurers, according to a KFF analysis. On average, private insurers paid 143% of Medicare rates for physician services. A KFF follow-up analysis also found that private insurance prices for hospital care rose 30% from 2019 to 2026, compared with a 21% increase in Medicare rates. Because Medicare rates can influence commercial negotiations, CMS’s final 2027 maternity payment values could affect employer plan costs.

How Could Employer Costs Change With Separate Billing?

Separate billing may provide less cost predictability than a bundled payment. Self-funded employers may see the effects quickly because they pay claims directly and will receive separate claims as services occur. For fully insured plans, any premium effects may take longer to emerge.

Questions Employers Should Ask Their Service Providers Now

Ask insurers and claims administrators about system readiness, reporting, fee schedules and provider contracts. According to Maven, questions include:

• Will your claims systems be ready for the new codes by January 1, 2027?
• What guidance have you received from CMS or the AMA on codes and other implementation details?
• Could some insurers use separate codes while others retain a global payment model?
• How are contracts, fee schedules, claims systems and edits being updated for the deleted global codes?
• Can you provide claim-level reporting by the new codes so we can track utilization?
• What cost impact is expected for the plan’s population, including higher-risk pregnancies?

What to Revisit After the November 2026 Final Rule

Revisit those answers after CMS publishes the final rule. Employers can then model the previous one to two years of maternity claims using the final payment rates. This can identify possible cost increases. Insurers can refine the estimate using plan demographics, Maven suggested.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.