The current budget crisis in Texas may cause cuts that could take away a mother’s luxury of deciding when her baby will be born, and create more incentives for women, especially those on Medicaid, to stay healthy and carry a pregnancy to full term.

Today, healthy babies who are born through elective induction are occasionally put into neonatal intensive care units (NICUs). If a baby is born prematurely or with health complications, he or she is also admitted into a NICU.

Medicaid is used both for elective inductions that are medically necessary and for those that are not. Because of the high cost of neonatal care, Texas legislators are looking to NICUs to help reduce Medicaid spending.

The average Medicaid cost of a NICU stay in 2009 was $45,000 compared to $2,500 for a healthy baby. Medicaid, which is administered by the Texas Health and Human Services Commission (HHSC), funds more than half of all births in the state. According to the HHSC, 4,370 elective inductions that were paid for by Medicaid occurred before 39 weeks of gestation in 2009.

“We’ve heard reports that healthy babies are sometimes placed in NICUs just because no other beds are available. That’s fine, but Medicaid shouldn’t be charged a higher rate for those services,” said Stephanie Goodman, HHSC spokesperson.

But Amanda Engler, spokeswoman for the Texas Hospital Association (THA), believes the growth is not a result of the high cost of NICUs.Engler said the reason for this increase is that Texas is a large state with a growing population of people who live in poverty and who are uninsured. With the economic downturn, even more people have lost their jobs and insurance coverage, turning to Medicaid for assistance.

“People look at the high cost and automatically think we must be admitting too many babies, but every area can benefit from review,” Engler said.

Dr. Linda Burke-Galloway, MD, MS, and Fellow of the American College of Obstetricians and Gynecologists, thinks NICU cuts could ultimately compromise the life of baby. She has not seen an overuse of the department.

“The only healthy babies that I’m aware of that would be admitted in the NICU would be babies who exhibited something odd at birth or while in labor,” Burke-Galloway said.

Both the House and the Senate versions of the budget currently include rate reductions for all Medicaid providers. According to Goodman, the HHSC estimates that the state could save $32.5 million over two years with an initiative to help reduce NICU use.

“This initiative wouldn’t put any caps on the funding for NICUs,” Goodman said, “Instead, we’re looking at a couple of things that will lead to healthier babies and make sure that only babies who need a NICU are placed in one.”

One of the proposals by the HHSC would eliminate Medicaid payments for an elective induction before 39 weeks of gestation. This is because an induction earlier in the pregnancy puts the baby at higher risk for complications. Goodman said that many hospitals already have similar policies because they lead to healthier babies and lower costs.

The HHSC is also looking for ways to identify mothers who may be at higher risk of delivering a premature baby, such as those who have already had premature births. Hospitals would offer these women additional prenatal services in the hope that it would lead to later deliveries and lower costs.

Another option considered is to require Medicaid representatives to explain why a baby was placed in a NICU. Goodman said this phone call would most likely happen after the baby is put in a NICU to make sure that every baby is able to get help as quickly as possible.

“It could end a practice that causes the state to pay for additional care that wasn’t necessary,” Goodman said.

The THA is also conducting research in order to eliminate unnecessary elective inductions.

“With deliveries there’s a consumer demand. Women want to have a definitive time frame of when they’re going to have their baby. Doctors don’t necessarily want to deliver on Saturday if they can deliver on Monday. It’s unfortunate, but that’s just the way it is,” Engler said.

Michelle Baldomar, a resident nurse at Presbyterian Intercommunity Hospital in Wittier, Calif. said her unit does not have the same problem. California has strict regulations on which newborns can be admitted to NICUs and doctors must file official reports stating their reasoning. Baldomar asked around the unit but could not find a mother who had had an elective induction for luxury.

Sen. Bob Deuell, R-Greenville, who is a family physician, is a proponent for evaluating NICU use. He said that there are many areas that are better prepared for budget cuts than NICUs, but no part of the state budget is immune to Texas’ budget deficit.

“We have to look for any and all inefficient spending in order to ensure that the cuts we must make do as little damage as possible,” Deuell said.

However, Engler has a more direct approach.

“To truly reform the health care system and to lower costs, you have to get doctors working together in a collaborative way so they can ultimately improve care and save money, and if Medicaid does this, others will follow suit,” she said.