The AMA’s new obstetric coding model is being widely discussed at present in the OB-GYN world. But beneath the surface, this is not just a coding update.
It is a structural shift in how obstetric care is delivered, documented, and financially valued.

A New Model for Obstetric Care

Beginning in 2027, the traditional global obstetric package will be replaced by a fully unbundled, encounter-based model.

In practical terms:

Prenatal visits transition to E/M-based billing

Delivery is billed separately

Postpartum care becomes independently billable

Ancillary services are no longer absorbed into a bundle

This marks a clear move away from bundled reimbursement toward visit-level financial capture.

Where This Model Moves Us Forward

For years, a significant portion of obstetric care has gone under-recognized financially.

This model begins to address that gap.

Postpartum care now extending to 12 weeks, can finally be captured

Counseling, coordination, and mental health support gain visibility

High-risk pregnancies can be more accurately reflected

Non-procedural care is no longer financially invisible

At its best, this model aligns reimbursement with the true scope and complexity of care.

The Overlooked Financial Shift

There is, however, a critical nuance that is not being discussed enough.

A typical obstetric visit is rarely “routine.”

A patient may present for prenatal care but also require management of:

Infection (yeast, UTI)

Blood pressure concerns

New or evolving symptoms

Emotional or mental health support

Historically, this allowed for:

A routine OB component

Plus a separately billable E/M service

This structure more closely reflected the breadth of clinical work performed.

What Changes at the Visit Level

In the new model, that distinction is largely removed.

All care delivered during the encounter is expected to be captured within a single E/M visit, with complexity adjusted accordingly.

While this simplifies billing, it also introduces a financial ceiling per encounter.

Using approximate Medicare benchmarks:

99213 reimburses around $90

99214 reimburses around $125

The incremental difference between levels is limited.

Previously, a combined visit could represent a higher total value.
Now, even with appropriate documentation, reimbursement is often compressed into a narrower range.

From Bundled Predictability to Performance-Based Revenue

This shift changes the financial model of obstetrics in a fundamental way.

Under global OB:

Revenue was predictable

Variability was contained

Under the new model:

Revenue is distributed across multiple encounters

Each visit becomes a point of financial capture—or loss

Outcomes will now depend on:

Documentation precision

E/M leveling accuracy

Visit structuring

Payer behavior

In effect, obstetrics becomes increasingly decision-making driven from a reimbursement perspective.

The Opportunity Within the Change

This model is not inherently limiting. It is selective.

It creates new opportunities for practices that adapt intentionally:

Additional postpartum visits can be captured

Increased patient touchpoints become billable

Preventive and counseling services gain recognition

High-risk care can consistently support higher complexity

Over the full pregnancy episode, these elements have the potential to offsetand in some cases exceed per-visit compression.

But that outcome requires strategy, not assumption.

A Redefinition of Value

What we are seeing is not simply a change in billing mechanics.

It is a redefinition of how value is assigned in obstetric care.

We are moving from:

Bundled, episode-based reimbursement
to
Granular, performance-driven reimbursement

Where financial outcomes are closely tied to how effectively clinical work is translated into documented complexity and structured encounters.

Final Perspective

This transition is neither purely favorable nor unfavorable.

It is a redistribution of revenue based on operational maturity.

Some practices will experience margin compression

Others will realize meaningful financial upside

Most will fall somewhere in between

The difference will be determined by how quickly and how thoughtfully they adapt.

Because ultimately, this change will not just influence billing.

It will shape how obstetric care is organized, delivered, and valued moving forward.

Renu Joshi MD EMBA FACOG is a physician-entrepreneur with training in robotic surgery, working at the intersection of clinical medicine, healthcare operations, revenue cycle strategy, and AI enabled systems.