Texas Medicaid Would Restrict Some Elective Deliveries to Lower NICU Costs

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According to state figures for the 2009 fiscal year, the average Medicaid cost of a NICU stay was $45,000, compared with the $2,500 expense of delivering a healthy baby, Goodman said.

"Even though we don't expect this initiative would reduce the number of those stays very much, it would still generate savings, just because of the difference in cost," she said.

In 2009, the Texas Medicaid program paid for 4,370 elective inductions of babies before they reached the 39-week stage of development, Goodman said. While most of those procedures led to births of healthy babies, she said, "we just know there is a slightly elevated risk of complications…We don't think that's a risk worth taking."

The projected two-year, $36.5 million savings achieved by limiting early deliveries and controlling NICU costs represents only a fraction of the state's $6 billion Medicaid deficit, Goodman said. She predicted that the proposal, reviewed by a Senate committee looking for Medicaid savings, would be likely to win legislative support and go into effect with the 2012 fiscal year that begins Sept. 1, 2011.

The growth in ICUs is inarguable. For example, in response to an open records request filed by the Texas Tribune newspaper, HHSC provided figures showing that the number of NICU beds at Memorial Hermann Hospital, near Houston, rose from 18 in 1998 to 80 in 2009. That's a 344 percent increase. Texas Health Harris Methodist in Bedford, a Fort Worth suburb, increased its NICU capacity from four beds to 16 in that same period, a 300 percent increase.

Some Hospitals Say Their Increased NICU Activity Isn't Reliant Upon Late-Term Deliveries

However, some hospitals that have expanded intensive care for premature and sick newborns don't expect that tighter Medicaid oversight of NICU admissions will necessarily yield significant savings.

At Texas Health Presbyterian Hospital in Dallas, spokesman Steve O'Brien said its increase in NICU beds, from 38 to 84 in 1998-2009, has not been driven by increased births among late-term babies delivered at 37 to 39 weeks.

Instead, he said, "most of the babies admitted to our NICU are very low birth-weight and extremely premature, many just 25 to 33 weeks of gestation. We have numerous cases of babies barely over 1 pound surviving and going on to lead normal, active childhoods. The kinds of elective inductions discussed in this report have nothing at all to do with these babies."

He attributed the jump in NICU volume to two factors. "We've instituted a high risk maternal transfer program as well as a robust high risk obstetrics program that is used by women in this area and throughout a three-state region."

The other factor he cited was "a jump overall in high-risk pregnancies and premature births because of older women having babies, an increase in multiples, and more women with existing medical conditions giving birth."

He said some of them, who have chronic conditions, "would never have had the opportunity to be moms" without the life-saving technologies found in modern NICUs.

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