On-Demand Webinar: “2027 Maternity Care Coding Changes: Reimbursement, Productivity, & Compensation”

HCRR #119: 2027 Maternity Care Coding Changes: Reimbursement, Productivity, and Compensation | September 30, 2026

This transcript was generated with AI and may contain errors or omissions. Please refer to the webinar recording for the most accurate version.

Timestamped section headings are editorial navigation aids and are not part of the spoken transcript.

00:00 – Introduction and webinar overview

PYA Moderator: Good morning everyone. Welcome to today’s episode of PYA’s Healthcare Regulatory Roundup webinar series. Today’s topic is 2027 maternity care coding changes, reimbursement, productivity, and compensation. PYA is happy to present today’s webinar on this important topic. You may submit questions during the webinar by typing a message into the Q&A pane. Also, immediately following the end of the webinar, you’ll be asked to complete a short survey and submit any additional comments. Any questions posed during the webinar will be responded to via email after the webinar. You can customize your viewing experience by resizing, moving, or minimizing all of the panes within the webinar. Net platform. We’ve posted a PDF copy of the presentation slides for your reference in the resources pane. Also, you’ll receive an email later today with a link to a copy of the slides and a recording of the webinar. With that, I would like to introduce today’s presenters Angie Caldwell and Deuce Lukemeyer.

01:11 – Presenters, agenda, and the 2027 transition

Angie Caldwell: Hello. I am Angie and this is Deuce. We have a very robust agenda for you today. We have some time together. I’m going to walk through the agenda. First of all, we are here to talk about all things maternity care and the changes that are headed our way. Beginning January 1, 2027, we’re going to talk through what this means and understand what the 2027 coding changes are. We’re going to have a talk about why this matters. And really thinking through and recognizing the ripple effect across and through operations contracts and ultimately physician and provider pay. We’re going to talk about some care models, show you the work RVU impact related to those care models, and then show you what those compensation impacts might be. And we’re going to talk through some other influencing factors because of course, this is a this is our agenda today. And our discussion today is based upon a proposed rule. So we are doing some projecting and some forecasting and thinking through some things. We’re going to walk through what those things are and how the outcome might be different based upon these influencing factors, complexity, prenatal volume, and also talk about just benchmark data noise. And then we have a plan, that helps you think through what to do next before January 1, 2027. So with that, let’s jump in.

Deuce Lukemeyer: Let’s jump in. So I want to start by offering a warm welcome to everyone joining us and being engaged in such a meaty topic. What we’re looking at here in this first slide is comparing kind of the journey that the patient takes. So let’s look at it.

03:11 – Maternity care journey and 2027 coding structure

Deuce Lukemeyer: The maternity care journey through the lens of the patient. When you look at the top part of this slide, you see CMS in 2026. This is business as usual. This is what we think of today. So you’ve got one global maternity code. You’ve got a single bundled payment. But it pertains to very discrete elements of care. But it lumps them together. So today in 2026, we’ve got our prenatal care. We’ve got our delivery. We’ve got our postpartum care. So all of this is business as usual, as usual for our audience, whether or not you’re on the hospital, medical group member, a physician, a provider, an administrator, this is what you’re used to in 2027. In that next box down, what you’re going to see is things are going to change a little bit. So let’s talk about what that change means. So again, we’ve kind of got a three bucket approach here. You’ve got prenatal care. But now because of various reasons. And it could have to do. Do with, you know, the increase in numbers of laborist program, the growing OB hospitalist programs. It could have to do with the work life balance, expectations of new obstetricians. There’s all kinds of things. But now we’ve got that middle component that where we’re going to look at labor management, delivery and that first in-hospital component of discharge. Then again, we’re bucketing or bookending with postpartum care. So let’s move to the next slide. Here is I was thinking about this presentation and putting this together. I was coming from the lens of an administrator. So what we see here is that there’s going to be four codes that are going away, and these are codes that we’re expected to see. These are all the normal codes. These are our business as usual codes. Then we’ve got those that middle section of codes. Those are all the office visits that we’re accustomed to. And perhaps a couple of discharge management codes when we are working in the hospital. Bottom part five codes all completely new. That’s what is going to put the ripple effect into what we’re going to talk about later. And I, I think if I were an audience member, what I would want to do with this slide, I’d want to print this out and I’d want to stick this to my huddle board. This is what we’re going to know is coming, and this is how we’re going to plan for it because these things are changing. So let’s move on to the next one. And let’s look at this from a little different perspective. So okay, now put the hat on of our finance team and our administrative team. Their world is being rocked too. In 2027. So what this tells us is

06:07 – Baseline wRVU impact

Deuce Lukemeyer: the simple story is we have a potential for a 4.03 work RVU decrease. That’s just a possibility. And we’re getting to that by comparing against the global code, the old 37 work RVU, that global code that we’re all familiar with and we just described as business as usual. And so now we know the possibility exists of a decrease, right? But it would be inaccurate or we would be in error if what we said here today and says that there we should automatically expect a decrease, that is not necessarily the case. 2027 work RVU values are going to move with medical decision making, and to make an automatic assumption that they’re going to go down would be wrong. We would be better off to think about this as a possibility. And then as we’re going to get into later in the presentation, we’re going to talk about how we evaluate the individual provider, the phases of care that they provide. How are we going to be able to now understand those individualized portions and how they affect us in our planning, our compensation, our contracting, and a whole host of things that we’re going to get into later on.

Angie Caldwell: I think it’s important to point out to that, you know, you and I duked it out when we were talking about the different care models that we’re going to present today and share with the audience. Thinking through while we’ve come up with what we think are the standard or baseline care models, and perhaps some changes related to those? We haven’t presented every possible scenario here, and we recognize that. But for the purpose of time and for the purpose of clarity, we’ve really limited our discussion to just a few care models that were getting ready to walk through.

Deuce Lukemeyer: Yes. And I’m going to as we get into those care models, I’ll explain that how they one differs from the other. And it’s really about variations in provider mix. And then whether or not we’re crossing TINs. But we’ll, we’ll we’ll explain that in a little more detail. Okay.

08:29 – Why the coding changes matter

Deuce Lukemeyer: Let’s talk about why this is important. Why I should pay attention. So as I was thinking through how we were going to explain this, the part that kept coming to my mind is, okay, we know there’s an impact on providers. We know there’s an impact on the office team and the clinical support team. But really, what may be missing from this, and what sometimes we really need to pay attention to is this impact is going to push maternity care into the swim lanes of our administrative team, our finance team, our legal team. So look at this, the impact in this. It falls in physician compensation. It falls in OB hospitalist contracting, whether or not we’ve got an employed medical group or an independent group, or whether or not we’re asking somebody to just cover call for unassigned patients. It impacts our care model design. Our productivity, productivity methods and measures are going to be impacted. Of course, now that we’re we’re emphasizing the individual episodes of care that pertain especially to the in-hospital piece. Documentation is important, and I’m sure we have many hospital administrators in our audience that are thinking, oh, downstream, this could have an impact on my hospital support, my subsidy, what I have to, to do to, to make sure that our labors program and our ongoing maternity care, survive sustains itself.

10:06 – Coding changes and compensation mechanics

Angie Caldwell: All right, so let’s talk about this a little bit more from coding change to compensation. Compensation change. So all of those things that you pointed out, let’s start to peel back the layers here. So first of all, what changes mechanically. So work RVU credit is now following the physician who personally performed each phase. There was one global claim before for maternity care. Now it becomes four separately reported events. And if you remember on the previous slide, everything was bucketed into three main categories. The fourth being that labor management, which really is in that middle bucket, in the active labor and delivery part of the global code. So you’ll see throughout the, throughout our discussion today, we’re really still grouping things into four to three areas. While there are four separately reported events within the new coding structure. So and then the episode totals are going to shift right with each visit count and with complexity and length of stay. What does that mean for compensation plan design. So plan language that is written around global codes really no longer describes the work. So in other words a lot many of the compensation models. We’ll talk about this in just a minute. Are based on a on a pooling perspective, the you had to estimate within the pool what was going to who. Well, now you have a way. You have a defined way. And it’s in the coding related to this. So plan language now from a pooling perspective might not align with actually what is, is happening. Coverage stipends based upon the delivery volume now needs separate treatment. Right. So we’ve got, we’re going to have more definition around all that. Everything is becoming clearer. And then benchmark surveys, as with any large coding change such as this, it takes a while for that benchmark data to catch up. So keep in mind we love benchmark surveys. But when by the time we get them they are one year already in arrears. So if this change is happening in 2027, it will be with the 2028 data that we will that we will see the data. So this is very important from a targeting target perspective, from a benchmark data perspective that we’re going to have a lot of noise here. And so again, physicians that are comparing themselves to the benchmark data, it might get really confusing for a while. But this change is going to allow the economics around laborist models to become much more clear, because now we know we’re going to be able to see better. Who’s doing what within the entire episode. I alluded to this a moment ago, but

13:16 – Common compensation models

Angie Caldwell: let’s talk about the common compensation models today. This is really a, a, cornerstone of discussion for the rest of the conversation because each. Each time we talk about a care model, we’re going to talk about the potential impacts it has on each of these types of compensation models that you may have within your within, within your organization. So number one, the tried and true model that we’ve all seen a million times is an individual productivity model where literally the provider compensation is based upon and reconciled to individual productivity. Thinking about our history, as it relates to determining individual productivity in a global model and a global code for OB. The provider that, that delivered the baby was the one that received the individual productivity for that entire episode. And so while that might have worked well in a, in a private practice, depending upon, again, their, their compensation model and design and the way they followed it through, in some settings, this wasn’t a good way to, to define the work of the individual provider, because we know that patient likely saw multiple providers during the course of their care. So then going forward with that individual model, well, individual changes in the CPT code level data are now in the related work. Reviews are going to affect that individual’s productivity just on a baseline. And we’ll show that here in detail in a minute what that change will be. Or we’ve estimated it to be on an individual, based on a baseline level. So many of you are on a group productivity model, probably the most popular model for OB or essentially all of the global codes are pooled and the related work RVUs are put into the pool. And then the productivity is allocated, based upon various different ways on call days work perhaps, or some other defined methodology with the new, change coming down the pike where we have individual CPT codes and we can determine individual productivity. My real question for the group then is what does the pool represent once you start coding on an individual work perspective across the episode, what does the what now? What does the pool represent? Right now it would be delivery codes in and delivery codes back out on the same methodology as they went in. Without better definition. And so it seems like something’s got to change with the with the group productivity models. And then lastly, another model that we see fairly often is a, as a proxy productivity model, which is essentially where organizations took the, the pool took the, the global code and estimated what it would be broken up across all the various services and assigned a signed a proxy work RVU amount. What’s really going to be interesting about this is pencils down, the test is over. You’re going to be able to really look at how close you were as an organization to assigning your proxy work RVU values to what AMA thinks are the are the values. So it’ll be interesting to see. And, and at that point, do you, and in what timeline do you perhaps modify or move away from your proxy productivity model? So again, just as a baseline and as we’re going through, these are the three predominant models that will be impacted. All of these changes.

Deuce Lukemeyer: Yeah. It’s, it’s, it’s, this is all kind of a fascinating topic. As our information gets better and we improve our abilities to understand work effort in and various components of the episode of maternity care. It’s really getting fascinating as to how when we think back about how we did it previously, how accurate were we. That’s a that’s a great point. That’ll be something that I think we’ll, we’ll see, being explored more and more.

17:47 – Care model framework and TIN considerations

Deuce Lukemeyer: So let me, let me now talk about our care models. What I’m hoping to do here is just kind of level set. We have essentially for, for ease of following and to make sure that the illustration is at least as clear as we can make it, because this is a really meaty topic. We’ve grouped the care models into what I’m going to call two buckets, two, two different envelopes. And the first envelope or the first bucket is, okay, we’ve got one TIN. That TIN applies to the entire continuity of care, the episode of care all the way through the second care model. And we’re going to have derivatives of each of these that we’re going to go into a little bit. But the second care model is really what happens when you’ve got a different TIN. And I’m sure everybody knows, but I’m going to say it anyway. TIN stands for Taxpayer Identification Number. So we know that now we’ve got a separate entity that is involved in that episode of care, the maternity care journey. And what you’re, what you’re looking at here on the screen is what we considered as we thought this through. And Angie’s described it very well. There’s all kinds of scenarios. So let’s start with the one that’s the most baseline and the one that probably most of us are ultimately familiar with and most familiar with is

19:08 – Care model 1: Single OB, one TIN

Deuce Lukemeyer: you’ve got one OB physician that performs the entire suite of care from start to finish. And so I think that one of the important things here is, as we’ve just talked about, the, The new accurate capture of each service phase or service element is going to be important to us. We’re. We now have an ability, through improved information, to better understand that work effort and how that flows in our contracts, in our compensation models, etc.. So let’s just kind of explore that. And this is going to look familiar to you. What we’re looking at here is really just the straightforward math. So we know that the global code was worth 37 work RVUs. If you perform the straightforward math, the possibility of a 4.03 work RVU reduction exists. Now, as we said, when we sort of put the preface of this whole, presentation together, that’s mostly for awareness. What’s happening in 2027 is going to be. Individual episodes of care are subject to medical decision making. So what we’ve tried to do in this is make you aware of the audience of the baseline math. And so we’re looking at when we see a 4.03 potential work RVU reduction, what that’s going to tell you is, okay, that’s based on two level two prenatal office visits, eight level three prenatal office visits, two level four prenatal office visits. Okay, so now we’re at a suite of eight prenatal office visits. And if you remember the original global code, that was seven plus. So there’s one little difference right there. But now we’re at eight prenatal office visits. Then you fast forward to the what, what we described earlier as the in-hospital care. And what this math is based on is, again, straightforward labor management, which includes a vaginal delivery without a prior C-section, and the baseline discharge Management code of 30 minutes or less. Now you go back to your. You combine your twelve prenatal visits. I’m sorry. I keep leaning out of the picture. You combine your twelve prenatal visits with two postpartum visits. Straight line math. The possibility exists of a reduction in work RVUs of 4.03.

Angie Caldwell: It’s hard to stay still and it’s hard to stay. So it’s like, you know, this is happening and then this is going to happen. And then this might happen over here. So it is very hard to say stay still.

Deuce Lukemeyer: Trying to keep my hands quiet.

Angie Caldwell: Yes. It’s it’s it’s difficult to do so. The 4.03. So let’s talk about that a little bit. So let’s think through. So let’s pull that through from a coding perspective and a baseline perspective over into the compensation implications. Again for a single OB physician, one tax identification number, with a decline, an estimated decline at baseline of 4.03. So just let’s from for rough math and we love rough math. For rough math, let’s think about what 4.03 work RVUs might do to a physician. Under an individual productivity model for one delivery. So a 4.03 work RV decline at approximately, which would be approximately $55 a work RVU. So I might get questions about where I got my $55 per work. RVU. That is not a fair market value opinion. That’s just that, approximates the median on a compensation per work RVU basis. So that’s 223 dollars of compensation per delivery. If we think about that then. So you’re thinking ah 223 dollars. If you think about the number of deliveries though that an OB provider is doing in an annual period, I used 250 deliveries. That might be a, you know, an average number to use for, for an OB physician. So let’s do the math further. 223 dollars per delivery and 250 deliveries a year. That’s about 55,750 dollars per year impact to this OB physician. And as we know, that is not going to be well received, well received from a compensation or planning, compensation planning and design perspective. So again, just in preparing for this, again, this is a baseline number. Individual facts and circumstances are going to change and even care models. We’re going to talk about those in a minute. But from a baseline perspective, that’s about the magnitude, that directionally that we can think about for, for a single provider. So again, just to reiterate, documentation is now driving the work RVU credit. So, complexity, which we will talk about later is not subjective, but the proposed guidance is very clear on how we are supposed to accumulate codes and assess complexity, which changes then the 4.03. And of course your targets, again, this provider is doing the same thing that they’ve always done, and simply because of the coding change, they are going to appear less productive. So the answer is not, oh my gosh, I’ve got a bunch of physicians that aren’t working hard. No, really, it’s simply that the coding change surrounding this, the if we think about our compensation models, our three major compensation models, the guidance provided under each of these boxes on the screen in front of you is really, really the same individual providers. You’ve got some planning to do and some compensation design work ahead of you, to, from a global group model, a group model and a pooling perspective. I don’t know what the future pool looks like right now. Based upon the way this works. And then lastly, proxy, you’ve got a great opportunity to measure how well your, your proxy was designed.

Deuce Lukemeyer: We both did it. Back to it. Okay, so, let’s think about this now. We’re, we’re still in care model number one, but there’s a derivative of care model number one. That’s one a. And what we’re doing here really is just

26:25 – Care model 1A: APP with one TIN

Deuce Lukemeyer: introducing an advanced practice provider into the care. And I think that’s important because we’re, we’re, what we’ve talked about all the way up to now is we’re increasing our information, we’re improving our information. We know that we are going to be able to better track because of this perspective change work effort. So what does that mean? We introduce an APP into the process here. So let’s just think of it this way. And the illustration that’s on the screen. Now this slide says we’re going to have an APP do essentially what we would describe as the in-office work. An OB or a midwife is going to do the in-hospital work. So that has the APP doing the prenatal care and the postpartum care and the OB or the midwife performing that middle bucket, which again, you could say is now four. But of the labor management, the delivery and the initial discharge. So how does that affect work RVUs? Well, you probably will not be surprised to see because again we’re inside one TIN that it doesn’t impact us. We still have that same level of 4.03 potential possible work RVU reduction. What’s not changing here in our to keep the math constant and steady. What’s not changing here in any of this is we’re still sticking with the twelve prenatal visits. So two level twos, eight level threes, two level fours. And then now we’re sticking with the same straightforward in-hospital care, straightforward labor management. Vaginal delivery without a prior C-section. Discharge management. Management of 30 minutes or less. And we’re back to the to the two level four or two. Level three. Excuse me. Postpartum visits. All of those things being equal. Nothing changed. We’ve introduced an APP into the process, but the work RVU credit still has the possibility of going down 4.03 work RVUs. Now that’s, that’s important for us to know. But it also presents an opportunity. There’s an opportunity there to better understand our work effort. The increasing requirements for documentation may mean that we can understand our. Specifically our APP work effort in the office. And my mind as a practice putting back to my practice manager days, which was a long time ago, but I would start thinking about how are these prenatal visits going to impact my standardized schedule of office visits, my E and M’s? What am I going to do? Is there going to be a change if I’ve got prenatal visits that are now of varying levels of office visit ranking, how does that impact when I’ve got a standardized schedule? Do I need to start thinking about a change? So that’s those are all things that I think are important as you think through, oh, there’s more here than just meets the eye. It’s not just work RVU is changing. There’s a downstream effect on operations. There’s a downstream effect in finance. And I know I may be beating a dead horse a little bit there, but I think it’s important that what you take away from this is the tentacles are large in this. It’s more than just what involves your office practice, your hospital practice your back to your office. There’s things to think about.

Angie Caldwell: You bet. So then when we overlay that with the compensation implications in this scenario, we still have the 4.03 total impact in work RVUs. But now we can break it down between the APPs portion of that and the physicians portion of that, or the midwives portion of that. So whereas before, in example number one, or care model number one, we, we attributed all four, decreased work RVUs to the physician. Well, now you’re like, oh, wait, maybe it’s just going to be 2.86 that gets, you know, allocated to the physician. It’s still a decline. And we, you know, so three fourths of our 55,750 dollars estimated impact to the physician is now, you know, again, thinking through and to the physician from a from a doctor’s perspective. So about three fourths of that, this is helpful. And again, the guidance then is still the same individual model impact. If your advanced practice providers are also on a productivity basis, there’s some planning that needs to be done for them as well because their work RVUs are getting ready, to decline, just like the physician group model impact. Your pool didn’t likely include APP work RVU values before, but now if you still have some kind of a pool that’s going to house your delivery, your pool just went down because now your delivery, CPT and work RVU effort, according to this model and the structure has gone down. And then again, from a proxy, you’ve got a great way to be able to analyze and to examine and compare to the new actuals.

Deuce Lukemeyer: Okay, so here’s another example. And we are still in care. Model one.

32:08 – Care model 1B: Multiple OBs or midwives

Deuce Lukemeyer: This is care model one B. And really what we’re talking about here is the only substantive change. Again keeping in mind that we’ve got one TIN that’s involved in this entire episode of care, but we’ve got difference and mix of providers. In this example, we’ve got multiple OBS or midwives again, involved in the complete episode of care, but involved in the application or the performing of that care. In this case, we’ve got OB number one. I’m just going to call it OB number one that does the office portion of the care. Then we have OB number two that’s involved in the in-hospital portion of the care. So OB number two is managing the labor, performing the delivery and doing that discharge management. Now back to the office and OB number one. They’re performing the postpartum care. So again, what we’re trying to focus on here is an opportunity to separately identify work effort. And that’s a perfect opportunity for our comp model, but also our contracting our resource utilization. How do we schedule in the office? How do we schedule those that maybe we were a group and we provide a labor of service. What does it how do we play to the strengths from this new information that we’re. We’re gleaning as a result of this change? Yes. The opportunity. Opportunity not being the right word there. The possibility of a 4.03 work RVU reduction exists. But there are ways also that we can use the information to improve our operations. So let’s look at the actual work RVU impact. And again this is the same 4.03. We’ve now got the first OB midwife doing all of the care in the office. Okay. And this will harken back to what Angie just described. We have the possibility of a 1.17 work RVU decline for that first OB midwife. We’ve got the second OB midwife again, all within the same TIN. That now has an opportunity for a. If I can read that 2.86 work RVU reduction. And I think those are important elements to understand as you think through. I’ve got an opportunity with improved information, but I’ve also got the possibility of some declining work or views. I need to be prepared because when you add that 1.17 and the 2.86, that’s how we get to our 4.03 potential decline in an overall work RVUs.

Angie Caldwell: Not to be too flippant on the compensation implications here for care model one B, but it’s really the verse for one B is same as the first and that you really have. Again, you’re just it’s a change in provider type. But the ultimate change again, you’re thinking through decreases in work, RVUs, how that impacts your compensation model and your future compensation model design. So now Deuce, we’re going to get into we’re going to add a layer of complexity.

Deuce Lukemeyer: Yay. Yay. So here we go.

Deuce Lukemeyer: So here we go. Let’s think about this. And this will probably impact the majority if not all of our audience. Right.

35:50 – Care model 2: Cross-TIN laborist model

Deuce Lukemeyer: So now we’ve got a single group that, inside one TIN, is providing what I’m going to call the office-based care. And you’re going to notice in this slide that we’ve kind of introduced a new label. It’s nothing that most of us probably haven’t worked with before. It’s a kind of a coder’s language, but that’s called a qualified healthcare professional. And that’s just really denoting someone who is capable, approved, licensed of providing the care that we’re describing. So let’s think about that qualified healthcare professional as performing the office-based care, right? So in the scenario we’re going to look at next, the work RVU scenario, we’re going to look at next. We’ve got that QHP providing the office care. We have a Laborist program or an OB hospitalist providing the in-hospital care different TIN now we’ve crossed TINs and then we’re back to the original TIN, the qualified health professional. In the office for the postpartum care. So what does that what does that look like when we start thinking this through? Let’s look at it. Okay. So in this slide, what I think is interesting is that our QHP, who is performing the office-based portion of the care, actually has a small possibility. Again, we are, we are comparing against, and I know I’m saying this maybe too frequently, but we’re comparing against straightforward delivery, twelve prenatal visits, all the things that we’ve gone in to set our baseline to calculate our straight line math. But that QHP, all things being equal, could see a 0.72 increase in work RVUs. Now let’s pull in the different the different TIN the Laborist. So that laborist is now doing those components again. We’re talking about a straightforward delivery, two day stay and an initial discharge management that laborist under these new codes where they’re billing each of those elements individually could see a 1.14 reduction. Put it together. And we’re looking at a 0.42 potential overall reduction. But that is not the point of this slide. This slide looks at okay, now we’ve got these two TINs. What is the impact as we cross TINs.

Deuce Lukemeyer: Okay.

Angie Caldwell: So I think it’s important to point out for those that are detail reviewing our deck, Deuce, why that baseline number changed on the previous slide once we changed And introduced a second TIN into our scenario. The global code was busted up, so it went away. And so we were showing the total with the individual codes as they are currently outlined in our CPT guidance. So hidden in here is that the busted-up codes today don’t equal the global, and they don’t equal the total amount going forward. So we have some we have some variation between. And so if you’re wondering why this total combined episode is a 0.42 reduction and not a 4.03 reduction. It’s because of that change. Once we crossed and added a different TIN to the scenario. Do you have any other clarifications with that?

Deuce Lukemeyer: No. I think you did a great job of explaining that. It really is. That’s why we bucketed it as care model two, because the impact there is. By going to a separate TIN, we’ve eliminated the opportunity for the global code. And so that there’s, there is going to be a difference in the way we calculate the straight line math. And that’s what we’ve, we’ve shown. But the implication is still relevant. It’s still relevant if you’re performing the in-office care and it’s still relevant if you’re you’re performing the in-hospital care. So I think yes, good. Very, very good point, fine, fine point.

Angie Caldwell: So now when we think about the compensation implications of that, this is the first time we’ve seen a positive on any of our slides so far. So we’re actually showing an increase in work RVUs to that QHP in the first TIN and the work related effort that they are getting related to this potential scenario. Your laborist, on the other hand, is still showing a decrease. And so in a moment, we’re going to talk through, you know, what that perhaps looks like or how that impacts your hospital-based subsidy to a laborist program in just a moment. But if you think about the compensation, the individual compensation implication to that laborist position, provided that they’re paid on a productivity basis, again, they’re going to see an impact or a reduction in their work RVU volume by about one point one for work RVUs. So again, an important distinction here once we add that second TIN. Go ahead.

Deuce Lukemeyer: And the only thing I was going to add to that is that will impact professional collections as well. So on the professional side you’re also going to see a small reduction. All things being equal the way we described it.

Angie Caldwell: Exactly. And so one thing you’ll notice throughout our discussion today, we did not try to model out the potential collection, implication of all of this simply because there’s still too much unknown. Payers vary wildly and how they pay for maternity care. And so in this in this presentation today, we did not get into the, the professional collection side. Although we are going to at least try to provide some direction as it, comes to the

42:19 – Laborist economics and compensation implications

Angie Caldwell: labor economics. So again, if you focus in on, on the labor side of this right now, so first of all, you know, you have a coding change as it relates to the work effort performed by the labor. So we have a reduction of 1.14 work RVUs that will translate into a professional collections decline for the Laborist program. Again, this is based upon our baseline scenario. We’re going to talk here in a minute about how the baseline scenario may change. But what this is doing is that for your laborist programs that you are subsidizing, that are currently stressed, expect them to become more stressed, because the initial implication is that professional collections will likely decline or slightly decline, which causes then the support payment from the hospital to potentially increase. So, so we need to be very careful about what’s going to happen here. And I think, you know, again, we can perhaps do some professional collections modeling specific to an organization related to this? But generally speaking, this is another consideration, another ripple effect as it relates to this coding change. So we have some guidance here as it relates to the potential impact to your labor economics. So number one, you’ve got to think through the coming at it from a evaluator’s perspective and a compensation evaluation, planning and design perspective. The fair market value, payment to the laborist physician will likely need to be refreshed in this commercial reasonableness reconsidered as it relates to this. Really, you will need to undertake a process to reprice the coverage. So stipends that were based upon delivery volume, might need a new basis. I’m going into 2027 because we’re not only. These programs provide not only the. The delivery, but could also provide a lot of. Again, labor management and other services related to the program. So we need to think through the changes in pricing on that. And then lastly, really fix the attribution. So on day one, organizations are going to be expected to bill and code this in the new way. Provided that all of the proposals get approved and continue to go to final. So on day one, your coding changes will go into effect. But your contracting related to the Laborist program may, may follow. And so there might be a lag, there might be a delay and there might be some, interesting economics that come about as a result. All right.

Deuce Lukemeyer: Okay.

Deuce Lukemeyer: So I think this may be this is all obviously a very meaty topic. And what we’re talking about is trying to project forward, a, an analysis that really has some uncertainty around it because of the medical decision making that’s required. And part of that medical decision making that’s required is, involves what is, how do you define straightforward versus complex labor, right? So what does that even mean? Well, the guidelines are pretty clear. And I’m going to give you my administrator interpretation of those guidelines so that we can understand how what the level setting might be.

46:29 – Straightforward vs. complex labor and length of stay

Deuce Lukemeyer: How do we determine straightforward versus complex. But I’m going to qualify it by saying I’m not a clinician. So this is the way my administrator’s brain buckets, these things, the way I think about it. And I would imagine the way a lot a large number of our audience thinks about it is complex. Is any variation from straightforward? So when we think about what’s straightforward labor represents. And if you read those guidelines, it’s really talking about a single baby positioned head first routine monitoring. So monitoring that’s not beyond the scope of the expected US. And that ties to the progression of the labor. The labor should be normal and expected. Again, we’re talking about how we define straightforward in-hospital this form of the in-hospital care. So that we’ve we’ve got single baby Routine monitoring. Normal expected progression. And we also have a stable maternal condition. So we’re not noticing anything out of the ordinary or again, unexpected. And then the sort of complementary point or the final point on this is there have been no prior C-sections, no caesarean sections. So that is a an administrator’s view of what constitutes straightforward labor. How do you define complex labor? That is what varies from straightforward, complex labor requires. And as you can see on our slide, increased documentation and exam demands. So that’s probably important for us to know because it requires more intensive physician management than we might have otherwise expected results. As we’ve talked about higher work RVU Possibilities. And again, now, now we’re talking about how do we move from straightforward to complex. And there’s the guidelines are fairly routine and easy to follow, but there’s a secondary factor here that we have to talk about. And that’s what we’re going to get into our in our next slide, where we’re talking about what I’m going to describe as length of stay. So let’s let’s look at this a little bit in terms of bucketing it by length of stay. And what is the difference of straightforward labor versus complex labor. So think about it first from the two day perspective. So with straightforward labor, the opportunity in 2027, proposed work RVUs from moving from straightforward to complex results in an increase of 1.15 work RVUs. Again, the important point here is you have to have sufficient documentation of that change. And it goes back to understanding the guidelines. If we could make a recommendation to the audience, it would be understand the guidelines. Now let’s talk about three day. And what does the three day length of stay. How does that impact things? So if we think about, again, straightforward labor where we’re dealing with our, as we’ve said more times than we probably should, twelve prenatal visits, the, straightforward labor management and all of those things. If you move from straightforward labor on a three day stay to complex labor on a three day stay, you’re going to have the possibility of an extra almost three work RVUs 2.99. So let’s talk about length of stay a little bit and how we understand length of stay to be applied as we start thinking about coding. And it’s really important that we have an understanding of the labor management codes because to me and to much of our audience, labor is a continuous process, right? It’s a, it goes on, it’s ongoing. And we need to understand when we would bill for that two day versus three day stay. And inherent to that is understanding that the labor management codes account for the work performed by the physician or the midwife. So a patient that is simply undergoing monitoring by clinical staff overnight would not count as moving from a two day to three day stay. And in that same sort of, of, arena, a single physician remaining and monitoring overnight should bill the labor management once. So you’re sitting there thinking, when does a three day apply? That applies when the physician leaves and comes back the next day, or there’s a shift change and we have a new separately identified physician identified physician coming in the next day.

Angie Caldwell: I see the Post-it notes being created now as it relates to when do you bill that versus when do you bill that? So, perhaps one of my favorite slides in the deck. And we’re going to pull the complexity that thread through more, more fully, here in a moment, but what you have here is

52:10 – wRVU impact across care models

Angie Caldwell: a summary of the work RVU impact in one place based upon all of the proposed or the example care models that we’ve shared today. So starting with the single OB one TIN and moving all the way down to the most complex scenario that we presented today, which is really the Laborist program with different tens. So you can see at a glance how, again, there’s a lot of red on this slide in the work RVU change column, and then you can begin to think through then the impact to compensation models related to those providers paid on a, on a productivity basis and your pools. In the last column here we are summarizing what the compensation focus should be, which starts out very simply, right down to just thinking through, what should the individual physician’s productivity threshold be, for to be considered a one point oh FTE. What are the tiers within that? Are there? Where do you set your guarantee compensation or your base compensation under this new scenario? Because of the change. And then as we get into care model one, a thinking again through how this impacts the individual productivity model. What does the group pool even contain anymore? And what’s the, what does the transition look like from proxy? Same thing happens in care model one. Be in care model two. This is where we get into further considerations about how we need to think about what our subsidy to the Laborist program looks like. If there’s not a subsidy today, where will there be a subsidy tomorrow? As it relates to this change and what is the impact to that? What does the, how does the, the change perhaps in impact coverage terms and how the care model is described within the Laborist agreement. All of that will have to change, as we consider what’s going to happen on, on January first. So then taking what deuce described, and my comment about all of the red on the previous slide, labor complexity and length of stay might change your answer. So, so while we have painted for the audience the most conservative position, which is to assume perhaps a professional collections decline, let’s assume a, a work RVU decline, let’s assume a subsidy increase and a and a compensation decline. Let’s think about think about what happens if the labor complexity changes and what that does to our planning. So again, the most common scenario, the planning assumption, but you start to change your complexity and your length of stay. You could actually go the other way. And instead of compensation declines, perhaps you perhaps you have compensation increases. And so it’s really important to understand what your, your scenario, what your individual facts and circumstances are as it relates to the labor complexity within your organization and within your, your maternity program. So, and Duza said it, and he was so kind about saying it and emphasizing it for me throughout, but the difference between the twelve prenatal visits and eight Prenatal visits.

56:16 – Prenatal visit mix and RUC assumptions

Angie Caldwell: So there’s a hidden variable in this data that we’ve shared with you today. Because again, in a, in a really great low risk scenario, your provider might be billing only eight prenatal visits instead or eight visits instead of the twelve visits. So over the course of the, of the, the care. So thinking about that change. So right now the global is based upon twelve. You could only have eight going forward. So hidden within the change is a difference of four visits which then impacts the overall change. And again, the work RVUs and all of the implications that we’ve talked about now. So again, this is a little bit of a hidden thread within the data that we’ve presented with. The bottom line being is that you really have to model through your own data and visit patterns before go live to understand what the potential scenarios. And there’s a number of scenarios here, what your potential scenarios are, and just not to, not to assume the mix that RUC assumed.

Deuce Lukemeyer: Yeah, yeah. And, and the, the interesting point here is there’s actually been, there’s, there have been papers, ACOG has put out papers that describe exactly what you said, Angie, which is for an appropriate patient population, it could be a level three office visits as the entire suite of prenatal care. And that would reduce our work RVUs, and that just that one little bucket there by 5.24 work reuse. So I think. The take home message is just what you said. We have to understand our practices. What is our patient mix? What’s the acuity? What who are we taking care of and how do we model going forward? And it’s, it’s really going to be a mixed bag of things because we don’t have a complete affirmation yet that these changes are even going to take place.

Angie Caldwell: Absolutely. Yeah. It’s it’s interesting. It’s, and how, how this changes the picture and changes, how information is communicated related to the changes and some of just the, overarching impacts as we start to think through because again, there’s a number of scenarios and they’re very different depending upon your organization and even where your practice is located. How many APPs your practice utilizes. There’s so, so many different variables that come into play here. So, you can see that, you know, deuce and I are really geeking out over this because we think, oh, what about this scenario? What about that scenario? But for the purposes of our conversation today, we’ve tried to just get to a baseline and something to compare from, for directional purposes. So I mentioned this earlier as part of, in fact, thinking through the agenda and also earlier on in talking about the compensation implications and implications on, on model design.

59:50 – Benchmark transition noise and fee schedule alignment

Angie Caldwell: Again, let’s expect a really noisy transition as it relates to this change. So we’re going to have to understand that historical trend lines are going to break and that we’re relying on old data and that we need to anticipate that it’s going to take a while for the trend line to calm down and get to some kind of a normalcy. I’ve already mentioned that we’re already surveys are already presented on a on a lag. And so it could be two to three cycles before we really see a and are able to make meaningful comparisons to what’s going on in the market related to the data. You know, one of the things that we have not talked about yet in this presentation, but we also know that many organizations do not automatically update to the most recent Medicare physician fee schedule for determining compensation and for calculating work RVUs for those providers that are paid on, on some sort of work RV productivity basis. So confirming that which year the organization is using, and then thinking through the operational noise related to. If you’re not on the most recent fee schedule, knowing that you’re going to be billing on the most recent fee schedule, then how does that impact all of that back and forth is going to be really tricky, for organizations to think through.

Deuce Lukemeyer: Yeah, yeah.

Deuce Lukemeyer: And I, you made me, you made me think of this because I’ve lived through it. When you talk about the, the change in the physician fee schedule year, you also have to know the complementary part of that is understanding what your, your employment agreements or your partner agreements or what do those say? What how are they going to be impacted by this? Is there a language in there that is now at odds with what we’re doing? And so it this really I keep thinking back about the slide where we said the ripple effect, the ripple effect of this, we really need to understand because it is going to touch more than just the IT, clinical care, clinical support. It’s going to touch some administrative and some strategy elements that we have to deal with.

Angie Caldwell: Absolutely. And great point on the contracts as well. You know, because the contracts normally define what Medicare physician fee schedule or what cadence that is updated. And so that’s going to be, you know, I just from an administrative perspective, keeping the compensation model on one thing and then doing another from a billing perspective could get in this scenario is going to be very complex, very messy.

Deuce Lukemeyer: It is it for sure.

Angie Caldwell: And then lastly, thinking about, we focused a lot of our discussion around work RVUs. That of course, are the output of those CPT codes that are then build from, the care that is provided. It’s not the only measure that needs to be considered in this. And so we’ve, we’ve used it here as, again, creating a baseline for everybody to think through. And, and it’s a, it’s a measure that everyone easily understands. And, and with some respects, other than for the complexity and the length of stay variations and modifications that we’ve talked about, it’s something that we can all easily gravitate to. And it, it means various things to us, but we really need to be thinking about not only the work we use, but thinking about what’s happening with the professional collections also, and really looking at those together and not separate and apart.

Deuce Lukemeyer: Well, and precisely. And the opportunity is there, right? The takeaway from this should not be that it’s an automatic reduction. The takeaway from this should be we need to understand our practice. We need to understand how these changes will impact our practice. But it doesn’t necessarily mean that you’re going to see less productive positions. And the straight line math would say yes, but understanding your practice is important.

Angie Caldwell: Yes, absolutely. I couldn’t have said it better.

1:04:27 – Action plan before January 1, 2027

Angie Caldwell: So what do we do now? What do we do next? Here are some things that Deuce and I have thought through with the help of our other PYA colleagues. What you can do between now and January first, 2027, which gosh, we’re at the end of the third quarter of 2026, if you can believe it.

Deuce Lukemeyer: No.

Angie Caldwell: And no, I can’t either. Organizations have about a calendar quarter, to prepare. So number one, first thing to do is what we just talked about and is to analyze your practice data, understand your patient population, the related complexity and acuity of those maternity care patients and, and overall, your, your mix of patients. You know, again, do you have, are you going to be able to do eight visits or are you going to have to do twelve? Do you have thinking through how you are doing it and thinking about your care model APPs, midwives, laborists and how those patients flow through? Because again, complexity can also change what type of provider is seeing which patients. So thinking about that and how that’s going to flow through is important. And then attempting to forecast the work RVUs under each of those scenarios with both the bundled and the unbundled models to really project or forecast. What the, what the outcome might be is really step number one. Step number two is then to think about the attribution of this. And this is where we’re getting into my question at the top. Gosh, what does the group model even represent anymore? What’s going into the pool? I don’t know what’s going into the pool now. So thinking through, how the credit is going to be, the work credit is going to be attributed to the providers. You know, again, thinking through that personally performed opportunity that everyone has now since it’s coming through the billing and coding, but thinking through how that’s going to be rewritten. And again, as we showed with some of the, the, in thinking through a global and a, in a pooled model before knowing that some of the APPs are doing that work today. And that’s a perfect example of this rewritten attribution where, you know, we’re having these, these shifts of where that work is, is landing from a and thinking through from a compensation perspective, those implications, coverage pay, becomes a little bit of an interesting topic here. Because again, thinking through how that is done today, is it your pooled models in the past were often attributed and allocated based upon call coverage, because it was more likely for a provider to deliver in those call coverage hours than it would be during the during the office day or under a normal work schedule. So separating coverage pay from, not to say that coverage pay is not clinical work. That is not what I’m saying. It is indeed clinical work, but separating that from the attribution of the CPT and work RVU credit within a compensation design, we think is really important, then resetting your targets. So we’ve again shown a lot of reds. And we promise that your providers are working very hard and in fact, working the same as they did on January 1, as they did on December 31. So just thinking through again what they’re, what those productivity targets should be and what the, you know, what is the, the baseline for that 1.0 FTE. Now without the, the global code, you know, delivery counts and all of those things, it’s going to be very different. How you do that.

Deuce Lukemeyer: And I think we, the, our audience and us, we’ve used work RVUs in some way as a crutch because it’s so mathematical and it makes it work. Effort is more easily captured when you’re using work RVUs. There hasn’t been a system developed yet that’s better at least approximating real, true physician provider work effort than work RVUs. And what we’re doing now is bringing a new element as you think about maternity care, bringing a new element into that. And it’s upset the apple cart because we’re going to have better mathematical attribution. Maybe. But that’s not how our comp models necessarily have been put together. So there’s some dissonance there. And as I think about if I’m a member of our audience, what do I want to take away from this? Well, our audience is probably made up of primarily leaders, right? We’ve probably got people who have high responsibility levels and are expected to know this going in. So what does this tell you? Do these things that Angie just laid out because the worst thing that can happen in 2027 is to be caught with an issue that you could have avoided. I mean, we’ve all sat in the seats where we get that telephone call from the provider who says, whoa, wait, what’s going on here? Why did my work RVUs drop? And if you’re not prepared to be able to answer that, it’s going to be a difficult start to the year. So do the planning. Be, be, be proactive. Be a leader. Who knows? Okay, I can avoid unnecessary disruption. I can avoid unnecessary issues with what Angie just laid out.

Angie Caldwell: Yeah. And that gets into number five here. So you teed it up. You gave me a nice soft ball to be able to hit number five out of the park here. But it’s really about the education and the stabilization. Right. Your physician’s your OB physician’s already know that this is coming. The American College of Obstetricians and Gynecologists is out there. They are talking about it. They are in the lead of it. They are sharing information with their with their members. And so from an organizational perspective, physicians need to understand what’s coming down the pike and why, again, why, what’s going to happen to their compensation when it’s going to happen to their compensation and what the organization is doing about it. And same thing with your compensation committees, your compensation committees, and your governance around that. They might not be as informed right now about what’s coming down the pike as the physicians are. And so there’s a we need to catch them up very quickly. So that they can speak to the physicians and they can speak amongst themselves about, okay, what do we need to do? We got a plan. We gotta we gotta think through this what the next steps are. So we’re going to leave you with a, a, we talked a lot about impacts to the compensation plans along the way. As it relates to the different baseline care models that we’ve put forth. But because of all of the noise that we’ve talked about and simply uncertainty. So while we’ve taken something uncertain and given you numbers to, to lean into and attach to, there is still quite a bit of uncertainty here. And one idea that we think is, is prudent in, again, talking to your physicians about what’s happening next and your compensation committees. Perhaps this is one of those scenarios where we do create a

1:12:45 – Stabilization plan and compensation transition

Angie Caldwell: stabilization plan and that allows you a bridge to a full compensation redesign, perhaps in 2028 or 2029. This would allow your organization to capture the data, think through the care model, make changes, allow your professional collections to stabilize. Because deuce and I didn’t even get into what that looks like at the practice level with collecting copays and timing of collections and some of those other things. This allows so much of the noise to settle that. Again, perhaps a stabilization plan makes sense. So what does that look like? What would that look like? And you know, we’ve got it broken down here really into about four steps. So one, freeze your plan. Just look at the plan again, you can’t you can’t pull anything. Or I guess you could pull anything. You could put it in and you could pull it right back out. But think, think through. Okay, how can I stabilize physicians, perhaps on a, on a base plus something that is designed that doesn’t involve, the accumulation of the global codes and such. But really just think about freezing that compensation, for the year and really you’re adjusting the rate here. We’re talking about applying the crosswalk to the underlying data and applying a factor adjustment. So that again, your physicians are doing the same amount of work on January 1 that they did on December 31, provided you are not that n of one that made a care model change in that twenty four to forty eight hour period, I wanted to say that because there’ll probably be someone out there that says, no, I did change it that day. So again, they’re doing the same amount of work. So we don’t want to penalize the providers on day one, for that. So just thinking through what that factor adjustment looks like. So that the pay can be identical, from the codes to the new codes, creating a crosswalk and a factor.

Deuce Lukemeyer: Yeah, that’s a really good point. I think people sometimes forget that there’s two elements here. There’s the, the raw number and then there’s the pay rate, right? The conversion factor if you want to call it that. So there’s, there’s opportunity and it’s going to take a while. Like you, you said very well. And very clearly the benchmark surveys are going to take a while to catch up. So we’re going to we’re going to be flying, flying blind for a little bit of time here.

Angie Caldwell: Absolutely, absolutely. And then we’ve already talked about carving out coverage pay. Again, just moving it outside as a separate component of compensation that’s not directly tied to a global code, a delivery, etc. Is likely prudent during this transition and then build in a mid-year true up. Again, add some reopener language to help reset targets as data is coming in, because the last thing we want to do is freeze the plan for a year and then immediately run afoul of your, fair market value targets or perhaps pay targets internally. So this is not a set it and let it go for the entire year. It’s really setting it and then building in that mid-year true up to see how you’re doing. And it really gives you a great year to, to shadow model and, and watch your perhaps your new compensation plan within that year to see how it turns out, so you can make some really elegant and important tweaks. Then coming up, January 1, 2028. So again, and then by that time, while we still won’t have, applicable survey data will be closer, than at that point, for comparison. So whatever you do, we’ve already talked about educating around this, but really documenting the interim approach is going to be really important because you’re from a compliance perspective, you’re defined bridge is defensible. An unaddressed gap is not. That’s what that is. And when I say an unaddressed, unaddressed gap is not defensible, I mean, from a compliance perspective, I mean, from a leadership perspective, and I mean from a communication to your physician’s perspective, it’s going to get really hairy. You know, if you don’t have that defined bridge.

Deuce Lukemeyer: I like that unaddressed gap. That’s better than simply saying issue.

Deuce Lukemeyer: Yes. Yes.

Angie Caldwell: There is an unaddressed gap here. So, do I for now we’re going to put this topic down. But I know that there is more, more to come, related to this from, from PYA and more to, to come as the, again, as, as CMS and as everyone finalizes their proposed rules here towards the end of the year. But it’s been a pleasure to speak with you today.

Deuce Lukemeyer: This, this has been fantastic. You’re the, the leadership through this is paramount. This is how we plan. And we make sure that we avoid any or we avoid any unaddressed gaps.

Deuce Lukemeyer: Yes.

Angie Caldwell: Yes. Very good. So with that, I am going to turn things back over to our moderator.

1:18:38 – Closing remarks

PYA Moderator: All right. Thanks to our presenters, Angie and Deuce. Please remember to stay on the line once the webinar disconnects to complete a short survey. Later today, you’ll receive an email with a link to their contact information and a recording of the webinar. Also, the slides and recordings for every episode of PYA’s Healthcare Regulatory Roundup series are available in the thought leadership section of PYA’s website, pyapc.com. While at our website, you may register for other webinars and learn more about the full range of services offered by PYA. Please remember to stay on the line once the webinar disconnects. To complete the short survey and post any additional questions you may have. On behalf of PYA, thank you for joining us. Have a great rest of your day.