Birth Center Trends 2025: The Policy Wins, Funding Cliffs and What to Prepare for in 2026

Birth center leaders don’t need convincing that the maternity care system is under strain. What has changed in 2025 is the level of policy attention, market growth and urgency around access to care—and the degree to which birth centers and midwives are now positioned as part of the solution.

Understanding birth center trends in 2025 is essential for owners, administrators and midwives navigating rapid changes in access, reimbursement and regulation. Understanding the big picture, the policy tailwinds (and headwinds) and what is likely coming next is critical for sustainable growth and long-term viability.

Below is a snapshot of where things stand in 2025, and how to prepare strategically for 2026 and beyond.

The oasis metaphor: In 2025, maternity care deserts define the landscape for millions of American families. Birth centers represent the most viable—and increasingly necessary—solution for sustainable access to community-based, midwifery-led care.

Big-Picture Birth Center Trends in 2025 Shaping Birth Center Growth

Maternity care deserts are driving demand for community-based care

A growing body of research confirms what many birth centers experience daily: access to maternity care is shrinking in large parts of the country. A 2025 analysis found that nearly half of all U.S. counties lack an obstetrician, midwife or birthing facility, formally defining them as maternity care deserts.

As hospital labor and delivery units continue to close—particularly in rural and low-income regions—interest in midwife-led, freestanding birth centers has intensified. Policymakers increasingly view birth centers not as “alternative care,” but as a necessary access solution.

The birth center market is expanding rapidly

Market analyses estimate the U.S. birth center market at approximately $253.7 million in 2024, with projected annual growth of over 13% from 2025–2034. This growth is fueled by several converging factors:

• Rising hospital birth costs

• Consumer demand for personalized, low-intervention care

• Increased awareness of midwifery outcomes

• Pressure on hospitals to reserve high-acuity resources

For birth center operators, this signals a favorable long-term market—if regulatory and payer barriers can be navigated effectively.

Out-of-hospital birth continues to rise

CDC data and professional association reports show continued increases in home and out-of-hospital births, with more than 400 birth centers now operating nationwide and new centers opening each year.

Families are increasingly seeking:

• Continuity of care

• Midwife-led models

• Community-based settings

• Lower intervention rates

This trend shows no sign of reversing.

Key Federal and State Policy Developments in 2025

Federal legislation to watch

Midwives for MOMS Act (H.R. 6394 / S. 1599) Reintroduced in the 119th Congress, this bill would create new federal funding streams (Title VII and VIII) for midwifery education. It prioritizes students from rural and economically disadvantaged backgrounds and explicitly aims to address workforce shortages across CNMs, CMs and CPMs.

If enacted, this bill could significantly expand the midwifery workforce pipeline over the next several years.

BABIES Act (S. 1598) The BABIES Act would require CMS (Centers for Medicare & Medicaid Services) to establish a Medicaid demonstration program focused on freestanding birth centers, including:

• Prospective payment system guidance

• State planning grants

• Funding to build or expand centers

This is one of the most consequential federal proposals for birth centers in decades and signals growing CMS interest in standardizing Medicaid birth center reimbursement.

Medicaid, CMS and value-based maternity care

A 2025 MACPAC brief reaffirmed that:

• Certified nurse-midwife services are mandatory Medicaid benefits

• Care at licensed birth centers is also mandatory

However, reimbursement levels and implementation vary widely by state—making state-level advocacy and payer negotiation essential.

CMS’s Transforming Maternal Health (TMaH) model further reinforces this direction. The model emphasizes:

• Risk-stratified care

• Team-based maternity services

• Improved outcomes for Medicaid and CHIP populations

Birth centers are well positioned to serve as preferred sites for low-risk care within these models—but only if operational and data systems are ready.

State-Level Reforms Supporting Birth Centers

Several states made meaningful progress in 2025:

• Massachusetts finalized modernized birth center regulations explicitly designed to remove barriers to opening centers. MassHealth also implemented reimbursement parity for CNMs, leading directly to increased midwife hiring.

• California enacted legislation removing a long-standing requirement that birth centers be within 30 minutes of a hospital with L&D services—an important change given widespread hospital unit closures.

• Multiple states advanced maternal mental health legislation that:

  • Studied barriers to independent birth centers

  • Mandated insurance coverage for perinatal home visiting, peer support, and psychiatric consultation

These bills increasingly situate community midwifery within broader maternal mental health and mortality-prevention strategies.

Ongoing Regulatory and Policy Headwinds in 2025

Despite positive momentum, significant barriers remain.

A 2025 Pacific Legal Foundation (PLF) 50-state review found that:

• Outdated regulations—such as certificate-of-need (CON) laws, hospital veto power and mandatory transfer agreements—continue to suppress birth center growth

• 17 states still have no operational birth centers

• States with fewer regulatory barriers consistently have more centers and better access

Additional persistent challenges include:

• Uneven payer recognition

• Underdeveloped Medicaid payment methodologies (lack of facility fee schedules)

• High malpractice costs

• Zoning and local health department hurdles

In some states, restrictive scope-of-practice laws continue to limit which midwives can practice in or bill from birth centers, constraining CPM and CM utilization despite national workforce needs.

2026 and Beyond: Trends to Watch Closely

Taken together, these birth center trends 2025 point to a clear shift: policymakers and payers increasingly view freestanding birth centers as infrastructure, not alternatives.

1. Deeper integration into Medicaid and CMS models

Expect continued movement toward:

• Prospective payment for freestanding birth centers

• Clearer Medicaid participation criteria

• State planning and implementation grants

Birth centers that can align with value-based maternity care frameworks will be best positioned for sustainability.

2. Regulatory modernization and CON reform

The combination of national regulatory surveys and highly visible hospital closures is likely to fuel:

• CON reform or repeal efforts

• Reduction of hospital veto authority

• Greater reliance on accreditation for licensure

More states may follow Massachusetts and California in modernizing birth center regulations—particularly in maternity-care-desert regions.

3. Workforce expansion and midwifery pipelines

If Midwives for MOMS advances, 2026–2027 could bring substantial new federal investment in midwifery education, with explicit attention to rural and underserved communities.

Health systems facing OB/GYN shortages are already exploring midwifery-heavy care models and partnerships with birth centers to stabilize access.

4. Data, accountability and quality metrics

Federal and state payers will continue increasing expectations around:

• Risk-adjusted outcomes

• Equity metrics

• Patient-reported outcomes

Birth centers that can clearly demonstrate low-intervention, high-quality, equitable outcomes will be better positioned for payer contracting and policy advocacy.

Maternal mental health policies will also bring new expectations around screening, referral pathways and documentation—even in community settings.

Strategic Implications: How to Prepare Now

Responding effectively to birth center trends 2025 requires more than clinical excellence. It requires payer readiness, regulatory strategy and policy engagement.

For birth center owners and administrators

Strengthen payer readiness

• Develop cost-based and episode-based financial models

• Prepare for Medicaid prospective payment and value-based contracts

• Ensure strong documentation of risk selection, transfers and outcomes

Invest in regulatory and legislative advocacy

• Map your state’s regulatory posture across licensure, accreditation, CON, physician involvement and transfer requirements

• Track state legislation affecting Medicaid maternity care, birth center regulations and maternal mental health

Differentiate on equity and access

• Align operations with CMS TMaH priorities

• Integrate doulas, peer support and robust postpartum follow-up

• Build strong community partnerships, particularly for Medicaid populations

For midwives (CNMs, CMs, CPMs)

Position midwifery as the workforce solution

• Use maternity desert and workforce shortage data to advocate for:

  • Expanded payer recognition

  • Hospital privileges that respect autonomy

  • Collaborative agreements that support—not constrain—practice

Build leadership and policy capacity

• Develop fluency in quality improvement, data reporting and health policy

• Prepare to engage with Medicaid agencies, payers and health systems

Prepare for expanded practice expectations

• Integrate routine perinatal mental health screening and referral workflows

• Align documentation with maternal mortality prevention strategies

• Engage in sustainability and climate-aware practice initiatives as systems begin factoring environmental impact into care models

Looking Ahead

The policy environment is shifting—slowly, unevenly but meaningfully. Birth centers and midwives that prepare now will be better positioned to expand access, stabilize finances and shape how maternity care evolves over the next decade.

If you’re planning expansion, navigating Certificate of Need or preparing for Medicaid contracting, a state-specific strategy matters.

The regulatory and market shifts we've outlined in this post are moving fast. If your birth center isn't prepared for 2026—with a clear Medicaid contracting strategy, compliance plan and workforce pipeline—you risk being left behind. A Systems Audit will identify your blind spots and position you to capitalize on the policy wins coming next year. Schedule Your Audit

Further Reading/ Sources

Source	What It Says
March of Dimes maternity care deserts report (PDF)	Nowhere to Go: Maternity Care Deserts Across the U.S. — shows gaps in provider access and birth facility deserts across counties.
MACPAC brief on midwives & birth centers (PDF)	Explores Medicaid benefits and barriers for midwifery and licensed birth center care.
NIH article on birth centers & Medicaid	Discusses Medicaid coverage requirements and financial barriers.
Medicaid maternal & infant health quality page	National Medicaid maternal quality improvement info.
AABC news on the BABIES Act reintroduction	The latest update on the BABIES Act (S.1598/H.R.5202) reintroduction and its goals.
PLF 50‑state survey on birth center regulations	Examines how state regulations affect the birth center landscape.
California AB 55 (2025) bill text and summary	Full text and details on California’s alternative birth center licensing & Medi-Cal reimbursement changes.
Massachusetts birth center regulation implementation tracker	Tracks how Massachusetts modernized regulations and reimbursement parity impacts.