CMS’s Proposed Medicare G-Codes Risk Undermining Maternity Care Modernization

A woman in labor arrives at a hospital late at night. The obstetric hospitalist on duty evaluates her and the baby, managing the labor and any complications for several hours. Her community obstetrician later arrives and performs the delivery. Six weeks later, she returns to her OB/GYN’s clinic for a postpartum follow-up with a certified nurse-midwife.

Maternity care is changing. The old model of having one OB/GYN manage care from before pregnancy through postpartum has given way to coordinated specialist teams with overlapping responsibilities. Meanwhile, the current billing structure still relies on global codes created more than 30 years ago, reflecting an outdated model of care.

This outdated bundled payment model is finally set to change on January 1, 2027.

New CPT codes developed by the American Medical Association, in collaboration with the American College of Obstetricians and Gynecologists and other medical societies, will allow prenatal care, labor management, delivery, and postpartum care to be reported separately.

Recently, the Centers for Medicare and Medicaid Services introduced a competing proposal.

In its proposed 2027 Medicare Physician Fee Schedule, CMS proposed 15 Medicare-specific Healthcare Common Procedure Coding System G-codes. These billing codes would largely carry forward the current bundled maternity care system after the existing CPT codes are discontinued.

Less than six months before a highly anticipated and long-planned transition, the proposal has created confusion for physician practices, hospitals, insurers, and technology vendors who already prepared for the new CPT codes. CMS has introduced uncertainty about whether Medicare will participate in that modernization or preserve the old system under a different name.

The consequences extend far beyond billing.

CMS’s proposed G-codes would preserve limitations the new system was designed to correct. Care would be grouped into broad bundles and Medicare claims would continue to provide an incomplete picture of how patients receive care in the hospital. More concerningly, these codes would not recognize emerging care models as distinct services at a time when most patients rely on care from multiple clinicians.

For example, the hospitalist model has played a central role in the evolution of maternity care. These clinicians work exclusively in hospitals and are available around the clock to evaluate patients, manage labor, and respond when emergencies arise. They work alongside community obstetricians and help hospitals provide consistent care to patients, offering communities support in a time when many labor and delivery wards face workforce shortages. Although hospitalists support a growing number of patients, the current billing structure fails to recognize these hours of specialized care as separate from a hospital visit or general delivery, leaving no clear record of who managed the labor or how complex that care was.

The proposal could also produce two competing coding systems, leading to inefficiency. Medicare might use the G-codes while commercial insurers and Medicaid programs adopt the new CPT structure. Each physician practice would need to determine which rules apply to each patient, maintain separate workflows, and ensure staff understand both code sets. Billing systems would need to recognize different rules for the same clinical services. Hospitals and physician groups would need to train clinicians and coders on two approaches to documenting the same episode of care.

The burden would be especially difficult for smaller practices, rural hospitals, and safety-net providers with limited administrative resources. In these areas where care delivery is already a challenge, time spent navigating conflicting billing systems is time taken away from improving care.

More accurate coding doesn’t mean higher costs

Some criticism of the coding changes has focused on the possibility that separate billing could increase health care spending or encourage additional services. Those concerns are valid, but not substantiated. The services represented by the new codes already occur. The codes simply create a more accurate record of those services.

The AMA also designed the transition to be budget-neutral compared with the codes being replaced. The AMA’s analysis following a survey of more than 650 clinicians found that the total value of the new codes isn’t expected to exceed the value of the former bundled codes.

Insurers should continue to review medically unnecessary services, as they do throughout the health system, but clearer coding supports oversight by giving payers a better view of services delivered.

Visibility matters for improving maternal health outcomes.

The United States has struggled for decades with unacceptably poor maternal outcomes. In 2024, 17.9 women died from maternal causes for every 100,000 live births. The rate among Black women is more than three times the rate among white women.

Many factors contribute to those outcomes. Our limited ability to determine which clinician provided which service remains one barrier to understanding where care succeeds and where it breaks down.

The global code compresses months of care into a single administrative event. Researchers and health systems are then left with an incomplete picture of the care that preceded an outcome. With more complete data informed by the new CPT codes, health systems can better identify gaps and understand which approaches lead to better results.

CMS has the opportunity to meet the moment in maternity care and preserve progress underway

CMS appeared to recognize some of this value in its proposed rule. The agency included the new maternity codes and proposed payment adjustments that better account for the work involved in labor and delivery. But its consideration of the G-codes contradicts this. Maternity care was finally on course to adopt a coding system that reflects modern clinical practice from coordinated teams. OB hospitalists, community obstetricians, and other clinicians each play distinct roles in keeping patients safe. CMS shouldn’t interrupt that progress by recreating the old system through Medicare-specific codes.

Our medical codes must show who provided that care, when it was provided, and what it involved. Clinicians need that clarity, but more importantly, patients deserve it too. The country needs it to build a more accurate understanding of maternal care and improve outcomes.

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