MN Moms Could Benefit As Bill Brings Birth Centers Into Parity

ST. PAUL, MN — A bill moving through the Minnesota Legislature could be a game-changer for families who choose to give birth in licensed birth centers.

If passed, the legislation would boost state reimbursement rates for birth centers under Medicaid, bringing them in line with what hospitals receive for similar maternity care.

Two birth centers in Minnesota, Willow Birth Center (Minneapolis) and River Valley Birth Center (St. Peter), closed last year, citing inadequate federal reimbursement for services.

Advocates say the move would help make birth centers more sustainable, expand access for low-income families, and affirm the role of midwifery-led care in Minnesota’s maternal health system.

Supporters also argue that increasing reimbursement for birth centers could save the state money in the long run, because birth centers focus on low-risk pregnancies and avoid costly interventions.

A study by the Center for Medicare and Medicaid Innovation found that birth centers have better overall birth outcomes, including:

• Fewer preterm births
• Lower C-section rates
• Lower NICU usage
• Higher rates of Vaginal Birth After Cesarean (VBAC)
• Lower cost of care overall

The proposed at the Minnesota Capitol change would mark a major step toward financial parity, ensuring birth centers are paid the same as hospitals for uncomplicated vaginal births and newborn care.

The higher rates would take effect in 2027 or upon federal approval.

"While freestanding birth centers offer high-quality and cost-effective care, they face significant barriers in securing appropriate reimbursement from insurance providers, government programs, and other payers," reads a petition supporting the bill.

Senate File 2109 "aims to address and promote sustainable reimbursement for freestanding birth centers in Minnesota. This means ensuring they receive fair and equitable reimbursement for the maternity care services they provide -- reimbursement rates comparable to those that hospitals receive for the same services."

The Senate version of the bill is co-sponsored by one Republican and four Democrats. The House bill is currently co-sponsored solely by Democrats.

Advocates are urging lawmakers to include the proposal in the final health and human services omnibus bill this session.