Committee reviews amended S.18 to license birth centers, set fees and timeline for Medicaid coverage

A strike-all amendment to S.18, presented Feb. 28 to the Senate Health & Welfare committee, would establish a licensing framework for birth centers, define scope-of-service and provider categories, set licensing fees and timelines for rulemaking, and direct the Agency of Human Services to seek federal approval so Vermont Medicaid can reimburse birth-center services.

Jen Carvey, presenting the amendment, described substantial structural changes from the bill as introduced: a new definition of “birth center” as a facility whose primary purpose is midwifery care, low-risk deliveries and newborn care with generally less-than-24-hour stays; a broader definition of “licensed maternity care provider”; and a $250 fee for initial licenses, renewals and change-of-ownership filings to be deposited in the hospital licensing fees special fund.

The amendment centralizes many operational and safety standards in Department of Health rulemaking. Among the changes are (1) updated inspection, corrective-action and licensing conditions, (2) a requirement that the Department post inspection reports and corrective actions on its website, (3) an explicit nontransferability of licenses, and (4) a rulemaking mandate to incorporate standards based on the American Association of Birth Centers model guidance at minimum.

Lauren Lehman, general counsel for the Vermont Department of Health, told the committee, “We support the bill as amended and thank the Vermont Birth Center Coalition for working with us on these amendments.” Shayla Livingston of the Vermont Birth Center Coalition emphasized a policy concern about hospital ownership: “What they've found is that when hospitals own these units, they tend to not last as long, close faster.” Livingston and others said allowing birth centers to be located on hospital grounds is acceptable but retained freestanding governance preserves midwifery-centered practices.

The amendment also addresses payor policy: it requires the Agency of Human Services to submit a request for federal approval to permit Medicaid reimbursements for birth-center services, including separate facility fees, by July 1, 2025; coverage would begin on the later of the federal approval date or the effective date of Department of Health birth-center rules. Committee members and stakeholder representatives debated whether the legislation should require licensed birth centers to accept Medicaid; hospital representatives urged either a statutory requirement or higher Medicaid reimbursement rates to ensure access. Stakeholders cautioned that requiring private entities to accept Medicaid without offsetting support could harm financial viability and that federal conditions could create compliance risks.

Senators asked the Department of Health to consider language clarifying that birth centers may be located on hospital grounds while remaining distinct in ownership and governance; Lehman said the Department “does not object to that change.” Committee members discussed adding rulemaking standards relating to transfer times to hospitals and declined to set fixed mileage or minute thresholds in statute, preferring rulemaking to capture geographic and seasonal variability.

No final committee vote on S.18 was recorded in the transcript; the committee paused to await the chair’s return before voting, and members agreed to continue deliberations and finalize effective dates and sequencing for licensure, coverage and certificate-of-need exemptions.

Ending: The draft strike-all amendment advances substantial new licensing and procedural language for birth centers; Department of Health supports the amended bill and the committee deferred final votes pending additional drafting of effective-date sequencing and Medicaid coverage mechanics.