Important Information on HB 1983 and Less than 39 Weeks

The full Medicaid bulletin and links to toolkits can be found here.

NOTE:  This background paper was developed by Dr. Eugene Toy, TAOG President.  For questions, please contact

Hospitals and Doctors Must Limit Elective Deliveries Less Than 39 weeks

Governor Perry recently signed into law  House Bill 1983, which directs Texas HHSC (Medicaid) to enact cost-cutting measures to reduce non-medically indicated Medicaid deliveries less than 39 weeks, and for hospitals and doctors to work together to develop quality initiatives to reduce these early non-medically indicated deliveries (inductions and ceseareans).

The bill goes into effect on Sept 1, 2011.

Texas Medicaid recently announced it will require providers and hospitals to bill using one of three modifiers (U1/medically necessary delivery prior to 39 weeks of gestation, U2/delivery at 39 weeks of gestation or later or U3/non-medically necessary delivery prior to 39 weeks of gestation).  Claims for deliveries that are submitted without one of the required modifiers will be denied.

The program can perform retrospective reviews and ask for reimbursement for those deliveries that are less than 39 weeks without a valid medical indication.  There is no time limit stated.

The ramifications for all obstetrical providers and hospitals are vast.  In order to avoid reimbursement problems, every hospital should  develop its guidelines and protocols for:

  1. Valid medical reasons for delivery less than 39 weeks
  2. Scheduling protocol
  3. Documentation standards


To assist with this tight timeline, the TAOG and District XI ACOG are working together with HHSC to provide templates for hospital guidelines, quality measures, monitoring, scheduling forms, and documentation.  Please contact us at if you or your hospital would like training on best practices.

Summary for Hospitals/Physicians: How to Implement the Process-

Step 1: Education- present evidence and rationale

Step 2: Gain consensus- establish your team

Step 3: Get your list of indications, use ACOG indications as template and consider adding other medical reasons

Step 4: Develop your process- how to schedule, how to appeal, how to monitor?

Step 5: Finalize your policy and scheduling form

Step 6: Monitor and be flexible to revise

Some of the background for this initiative may be found in a large research study involving 19 different hospitals and 24, 000 patients published in the New England Journal of Medicine in 2009, investigators found that more than a third of babies were delivered by cesarean without a medical necessity prior to 39 weeks. Infants born at 38 weeks had a 50%  greater chance of being so sick as to need neonatal ICU care, and those delivered at 37 weeks were twice as likely to be admitted to the ICU.  The gestational age with the lowest risk for neonatal problems was 39 weeks or 40 weeks.  These findings have been confirmed by other follow-up studies.  Several hospital systems have shown that by reducing early scheduled deliveries, they decreased the number of NICU admissions at all gestational age by 16%.  Each neonatal ICU hospital stay costs about $50,000 per infant.

The Joint Commission Accreditation of Healthcare Organizations, American Congress of Obstetricians and Gynecologists, and many insurers have listed early term deliveries without medical indication as a perinatal quality measure.  Increasingly, this is an area that hospitals and doctors are being scrutinized.

Examples of valid medical reasons for delivery less than 39 weeks include hypertensive disease, oligohydramnios, IUGR.  Examples of not valid medical reasons include patient choice, physician going out of town, history of a fast labor.

Every community is unique, and we advocated very vigorously for the medical decision making, and care of the patient be retained at the local level.  Thus, an important part of any hospital guideline is the ability for a practitioner to appeal in a timely manner for a clinical situation that does not appear on the "approved medical indication list," so that a patient does not suffer intended harm. No list is perfect.


  1. Fleischman AR, et al. Obstet Gynecol 2010; 116:136-9.
  2. Tita AN, et al.  N Eng J Med 2009; 360: 111-120.
  3. Clark Sl, et al.  Neonatal and maternal outcomes associated with elective term delivery, Am J Obstet Gynecol 2009;200:156
  4. Robinson CJ et al.  Timing of elective cesarean delivery at term and neonatal outcome: a cost analysis. Am J Obstet Gynecol 2010;202:632.  (Hospital charges $60,000-75,000 per NICU admission, $43,000 cost per this cost analysis)
  5. Joint Commission Perinatal Care Core Measure 1, Elective Delivery., accessed May 1, 2011.
  6. Kohlkorst: House Bill 1983, signed by Governor 6/17/2011.   Texas Legislature Online,, accessed June 25, 2011.
  7. Leap Frog Group listing of hospitals on non-medically indicated deliveries, accessed January 22, 2011.


Sarah Rayburn

ACOG District XI:

American Congress of Obstetricians and Gynecologists
409 12th Street SW, Washington, DC  20024-2188 | Mailing Address: PO Box 70620, Washington, DC 20024-9998