The Effect of Texas' Hard Stop Medicaid Payment Reform on Early Elective Inductions

The U.S. ranks 17th in the world in perinatal mortality rate and 29th worldwide in infant mortality, near the bottom of industrialized nations. The practice of elective induction prior to 39 weeks is associated with substantial perinatal harm. Yet, almost one-fourth of deliveries undergo induction and the rate has more than doubled in the United States over the past decade (from 10% to 22.5%). Starting on October 1, 2011, Texas modified its Medicaid benefit criteria for obstetric deliveries to deny claims for any induced (or Cesarean) delivery before 39 weeks if not medically necessary. In this study, we assess the impact of Texas’s Medicaid payment reform for early elective induction of labor on clinical care practices and perinatal outcomes, using states that did not pass “Hard Stop” (or Hard Stop-like) legislation over the time period for comparison.

We used National Vital Statistics System data, including the restricted geographic file, for the years 2009-2013. These data contained birth certificate records from all 50 U.S. states and the District of Columbia. Data were merged to the 2014-2015 Area Health Resource File, which provided information on county-level economic and primary care provider characteristics for the five years in our study.  Our key outcomes included early elective inductions, gestational age, birth weight, and early elective Cesarean sections. We employed a difference-in-difference strategy to isolate the effect of the Hard Stop policy in Texas from unrelated underlying trends present in the control states. Models adjusted for characteristics of the delivery and mother, if a father was not present on the birth certificate, county-level economic and provider trends, state-specific time trends, and seasonality of birth.

Relative to the control states, there were significant reductions in early elective inductions among Medicaid deliveries in Texas, including reduced rates of Cesarean section births. 11.2% of Texas births paid by Medicaid were the result of early elective inductions prior to Hard Stop legislation, and after adjusting for changes in early inductions in comparison states, this share dropped by 1.1 percentage points (p< .001). Birth outcomes also improved for babies covered by Medicaid in Texas, with relative increases in average gestational age of 0.5 days (p< .001) and average birth weight of nearly 12 grams (p < .001).

Findings from this study suggest that the Medicaid Hard Stop policy in Texas was effective in reducing the rate of medically unnecessary early elective inductions among Medicaid deliveries. As a result, babies covered by this policy reached an older gestational age and greater gestational weight. Since Texas had one of the highest rates of early elective inductions prior to enacting Hard Stop, we would expect that states with similar baseline rates (Kentucky, Louisiana, Florida, Texas, and Mississippi) would also have relatively large reductions in early elective induction  rates should they pass  Hard Stop legislation. If the policy were adopted nationwide and the national early elective induction rate were to fall by 1.1 percentage points (as in Texas), nearly 20,000 babies per year would be positively affected by the law.