On Dec. 1, Pennsylvania will become the latest state to fully reimburse hospitals for providing long-acting forms of birth control to Medicaid patients immediately after they give birth.
The change, announced Monday by Gov. Wolf's administration, is expected to increase the use of long-acting methods such as the intrauterine device (IUD) by low-income women on Medicaid, thus reducing the costs of unintended pregnancy.
"This policy change should help to increase usage by 6 percent and help to prevent unintended pregnancies — saving millions of dollars," Department of Human Services Secretary Ted Dallas said in a news release, citing administration estimates.
Traditionally, state Medicaid agencies and most commercial health plans pay a single lump sum for all costs associated with labor and delivery — including the costs of stocking and inserting IUDs or contraceptive implants to women who want them.
But because this "bundled" payment falls far short of the actual costs of these long-acting contraceptives — which can range from $400 to more than $1,000 — hospitals generally refused to provide the methods immediately after birth, according to a blog post on the Pew Charitable Trusts' website.
Medicaid patients who wanted a long-acting contraceptive could still get one at their first doctor's visit about six weeks after giving birth, but more than a third of women don't show up for this postpartum appointment, studies show.
In 2012, according to the Pew article, South Carolina became the first state to make changes in Medicaid billing codes to allow for separate reimbursement for long-acting methods provided right after delivery. Use of the methods soon increased, from 10.5 percent of women on Medicaid in 2013 to 14.2 percent in 2013. South Carolina health officials estimated this saved the state's Medicaid agency $1.7 million by preventing unintended births.
At least 16 other states have followed South Carolina's lead, the Pew article said.
The Wolf administration decided to make the change after the federal Centers for Medicare and Medicaid Services published a bulletin highlighting these states' actions. The administration estimates that over five years, the net savings to the state will be $1.4 million. About one million women of childbearing age are served by Medicaid health programs for the poor.
"This is a public health issue that crosses both economic and social lines," Pennsylvania Department of Health Secretary Karen Murphy said in the news release. "The Wolf Administration is committed to reducing unplanned pregnancies and improving birth outcomes."
Contraceptive implants and IUDs are highly effective, reversible methods that can prevent pregnancy for three to 10 years. Under the Affordable Care Act, also known as Obamacare, all forms of birth control are considered preventive health care and must be covered with no out-of-pocket costs by Medicaid, most employer-sponsored plans, and plans in the insurance Marketplace.