The BABIES Act expands access to freestanding birth centers by creating a $5 million federal grant program (2026-2030) that provides $300,000-$500,000 annually to up to 15 accredited birth centers in underserved areas for facility improvements and accreditation costs, and establishing a 4-year Medicaid demonstration program in selected states to test coverage of maternity services at birth centers for low-risk pregnancies. Under the demonstration program, the federal government will reimburse states for birth center services at standard Medicaid matching rates, with up to 6 states receiving planning grants to design their own programs. The bill appropriates $3 million for program setup in 2027 and $6 million annually from 2028-2031, and requires states to submit annual reports comparing birth center outcomes and costs to traditional hospital care. By 2031, the Secretary of Health and Human Services must recommend to Congress whether to continue, expand, modify, or end the program based on demonstration results.
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