Texas Medicaid OB/GYN Billing: Underpayments & 2027 CPT

A full delivery schedule does not guarantee accurate Medicaid reimbursement. Texas OB/GYN practices may face underpayments due to maternity billing errors, incorrect contractual rates, missing authorizations, coding issues, and claim-processing mistakes. Identifying these discrepancies requires reviewing payer policies, reimbursement agreements, and claim documentation.

This guide explains how Texas Medicaid OB/GYN billing works, identifies common reimbursement problems, reviews high-risk pregnancy and ultrasound claims, and prepares for the 2027 maternity CPT changes.

Texas Medicaid OB/GYN Billing: Fee-for-Service vs. Managed Care

Before investigating underpayments, practice owners must understand which reimbursement rules apply to their claims. Texas Medicaid operates through both fee-for-service and managed-care arrangements. The Texas Medicaid & Healthcare Partnership (TMHP) publishes the Texas Medicaid Provider Procedures Manual, including the Gynecological, Obstetrics, and Family Planning Services Handbook.

Importantly, the handbook explains that its obstetric billing provisions apply to Texas Medicaid fee-for-service benefits. Providers must consult the Medicaid Managed Care Handbook and the applicable MCO’s policies for managed-care benefits. Certain carve-out services continue to be administered through fee-for-service.

For example, TMHP allows fee-for-service providers to itemize prenatal, delivery, and postpartum services individually. This does not establish that every Texas Medicaid MCO must reimburse claims using the same billing methodology.

What should Texas OB/GYN practices do?

Identify the patient’s Medicaid plan before submitting a claim. Review the applicable provider agreement, reimbursement policy, and benefit requirements for the date of service. Do not automatically apply TMHP fee-for-service instructions to a managed-care claim.

5 Texas Medicaid OB/GYN Billing Problems That Can Affect Reimbursement

Not every payment discrepancy is an underpayment. Some result from incorrect claim submission, eligibility problems, coverage limitations, or missing clinical documentation. Identifying the actual cause helps practices determine whether a corrected claim, reconsideration, or formal appeal is appropriate.

1. Incorrect Global Maternity Billing

Global maternity billing can create confusion when providers do not account for the applicable payer’s reimbursement requirements.

For Texas Medicaid fee-for-service, TMHP reimburses prenatal care, delivery, and postpartum care as individual services. Providers may itemize each service on one claim submitted at delivery or submit services as they are rendered.

The handbook also distinguishes inpatient services included in the delivery reimbursement from separately reportable services.

For example, inpatient intrapartum and postpartum care are included in the fee for delivery or cesarean section. Certain prenatal and postpartum visits billed during specified inpatient periods are also subject to denial as part of another procedure.

Managed-care practices must review the relevant MCO’s billing policy rather than assume that this fee-for-service methodology automatically applies to every plan.

Common issues include:

• Incorrect use of global maternity billing codes.
• Missing prenatal visit information.
• Incorrect separation of delivery and postpartum services.
• Duplicate claims for services already included in a reimbursement package.
• Incorrect billing after a transfer of care.
• Failure to account for an insurance or MCO change during pregnancy.

Solution: Reconcile maternity claims against the payer’s billing requirements, patient eligibility, provider participation, and actual services delivered. Maintain separate workflows for FFS and managed-care claims.

2. High-Risk Pregnancy Services and Medical Necessity Denials

High-risk pregnancies may require additional monitoring, testing, and management beyond routine prenatal care.

Common clinical circumstances include gestational diabetes, pregnancy-related hypertension, fetal growth restriction, placental complications, and other maternal or fetal conditions.

Texas Medicaid identifies antenatal surveillance services that include:

The coverage of a procedure does not mean that every claim is automatically payable. The service must meet the applicable medical necessity, coding, authorization, and documentation requirements.

For example, when a patient with gestational diabetes requires fetal surveillance, the medical record should support the clinical reason for testing, the physician’s assessment, and the relevant treatment or monitoring plan.

A claim may require additional review when:

• The diagnosis does not support the service.
• Clinical documentation does not explain why testing was necessary.
• Required authorization is missing.
• The claim contains an incorrect procedure or diagnosis code.
• The payer considers a service included under another reimbursed service.

Solution: Review the clinical record and applicable reimbursement policy before submitting additional services. Confirm whether the payer permits separate reporting and what documentation is required.

Do not assume that all high-risk services are separately payable simply because a pregnancy is considered high risk.

3. Obstetric Ultrasound Authorization and Reimbursement Issues

Obstetric ultrasound billing deserves particular attention because both Texas Medicaid and individual MCOs have specific coverage limitations.

Under the current TMHP fee-for-service handbook, prior authorization is required for more than three obstetric ultrasounds per pregnancy. Additional studies may be considered when the provider submits the appropriate authorization request and documentation supporting medical necessity.

The request should include:

• Requested procedure code and quantity.
• Applicable trimester.
• Expected dates of the procedures.
• Estimated date of confinement (EDC).
• Relevant diagnosis.
• Supporting clinical information, such as previous imaging, treatment history, or treatment plans.

The handbook also identifies exceptions for obstetric ultrasounds performed in emergency departments, outpatient observation, and inpatient hospital settings.

How do MCO policies differ?

The 2026 UnitedHealthcare Community Plan of Texas Care Provider Manual provides a specific example. It allows the first three obstetric ultrasounds per pregnancy. Fourth and subsequent obstetric ultrasound procedures are allowed only for identified high-risk members, and claims must include the corresponding diagnosis code.

These requirements should not be treated as a universal policy for every Texas Medicaid plan.

For practices participating with different MCOs, authorization and coverage requirements must be checked separately.

Solution: Maintain an ultrasound tracking record for each pregnancy. Document previously completed studies, the reason for additional imaging, authorization status, and the diagnosis supporting the service.

Do not automatically append Modifier 59 to ultrasound claims to bypass bundling. The modifier must be supported by the applicable coding guidelines and the actual circumstances of the service. It does not override authorization or coverage requirements.

4. Patient Eligibility and Medicaid MCO Changes During Pregnancy

Insurance changes can complicate maternity billing, especially when a patient changes Medicaid managed-care plans during pregnancy.

A patient may receive several prenatal visits under one MCO and deliver after enrollment in another plan. This can create uncertainty about which payer is responsible for each service and how maternity care should be reported.

Potential problems include:

• Claims submitted to the wrong MCO.
• Incorrect effective dates.
• Missing member eligibility verification.
• Out-of-network provider complications.
• Incomplete documentation during a transfer of care.
• Incorrect assignment of prenatal or delivery charges.

For instance, the 2026 UnitedHealthcare Community Plan of Texas manual includes continuity-of-care provisions for pregnant members beyond the 24th week who are already receiving care from an obstetrician, including certain circumstances involving an out-of-network provider.

This is an example of why practices should review the actual plan’s continuity-of-care requirements rather than automatically transferring care or rebilling the entire maternity episode.

Solution: Verify eligibility at relevant service dates, retain previous coverage information, document changes in enrollment, and confirm continuity-of-care arrangements with the payer.

5. Missing Delivery Documentation and Incorrect Claim Processing

Incomplete claim information can delay reimbursement even when the service was medically appropriate.

OB/GYN claims must accurately reflect the services performed, applicable diagnoses, provider details, dates of service, and other information required by the payer.

Depending on the claim and applicable policy, missing or inconsistent information may involve:

• Delivery outcome.
• Gestational age.
• Maternal and fetal diagnoses.
• Operative documentation.
• Authorization reference numbers.
• Provider identifiers.
• Dates of service.
• Previously billed maternity services.

A claim can also be processed incorrectly when the billing system uses an outdated payer configuration or an incorrect reimbursement table.

Solution: Introduce pre-submission claim checks and compare the remittance advice against the original claim, provider agreement, and supporting records.

How to Identify and Audit Texas Medicaid OB/GYN Underpayments

Practice owners should not calculate underpayments using billed charges alone. The correct comparison is between the payment the practice should receive under the applicable reimbursement arrangement and the actual payment after legitimate adjustments.

A structured payment audit helps identify whether a difference represents a contractual underpayment, a correct coding edit, an authorization issue, or another reimbursement problem.

Step 1. Review the patient’s eligibility and payer

Identify the Medicaid MCO or fee-for-service arrangement applicable on the date of service.

Check the patient’s enrollment, service area, coverage dates, and provider network status.

Step 2. Verify the applicable reimbursement terms

Review the provider agreement, fee schedule, maternity reimbursement policy, and relevant amendments.

For managed-care claims, verify that the correct contract and payment terms apply to the service and provider.

Step 3. Compare the submitted claim with the medical record

Check the procedure codes, diagnosis codes, modifiers, dates of service, units, and authorization information.

Confirm that the claim accurately reflects the documented service.

Step 4. Review the ERA or EOB

An Electronic Remittance Advice (ERA) or Explanation of Benefits (EOB) helps explain how the payer processed the claim.

Review:

• Billed amount.
• Allowed amount.
• Actual payer payment.
• Patient responsibility, where applicable.
• Contractual adjustments.
• Other payer payments.
• Claim adjustment reason codes (CARCs).
• Remittance Advice Remark Codes (RARCs).

Step 5. Calculate the potential payment discrepancy

Use the applicable contractual rate and legitimate payment adjustments to calculate the expected plan payment.

Expected plan payment = Contracted allowed amount − valid patient responsibility − other applicable payer payments and adjustments.

Potential payment variance = Expected plan payment − Actual plan payment.

A positive variance deserves investigation. It does not automatically establish an amount recoverable from the payer.

Step 6. Investigate and appeal eligible discrepancies

If the review identifies a genuine underpayment, gather the provider agreement, relevant reimbursement policy, original claim, ERA, medical documentation, authorization records, and payment calculation.

Submit the appropriate correction, reconsideration, or appeal within the payer’s applicable deadline.

Submit the appropriate correction, reconsideration, or appeal within the payer’s applicable deadline, and monitor unresolved balances to prevent OB/GYN A/R aging beyond 90 days.

OB/GYN Medicaid Claim Audit Checklist

For multi-provider OB/GYN practices, this process should be repeated across payers, providers, and service categories. Reviewing recurring payment differences can help reveal patterns that individual claim follow-up may overlook.

2027 OB/GYN Maternity CPT Changes: What Texas Practices Must Prepare For

One of the most important upcoming changes for OB/GYN billing is the 2027 maternity CPT code transition, effective January 1, 2027.

The American Medical Association (AMA), working with the American College of Obstetricians and Gynecologists (ACOG) and other specialty organizations, approved significant revisions to maternity care reporting.

The changes include 17 deleted codes, 12 new codes, and six revised codes.

The traditional global maternity billing structure is being replaced with reporting that better distinguishes individual phases of pregnancy care.

What is changing in 2027?

Some familiar maternity codes, including 59400, 59510, and 59610, are among the codes being deleted.

New codes include:

The specific code selection must follow the AMA’s 2027 CPT descriptors and reporting guidelines.

For example, new labor-management reporting distinguishes initial and subsequent days and straightforward versus complex management. The new delivery structure also separates delivery services from other maternity care components.

What should Texas OB/GYN practices do before January 1, 2027?

The change requires more than updating a code library.

Practices should:

1. Review the complete AMA 2027 maternity code set and guidelines.
2. Update practice-management and electronic health record systems.
3. Confirm that clearinghouses can process the new code structure.
4. Obtain written implementation guidance from each participating Medicaid MCO.
5. Update coding workflows for antepartum, labor management, delivery, and postpartum services.
6. Train billing teams and coding staff.
7. Review reimbursement terms and identify how each payer will process the new codes.
8. Monitor denials, payment differences, and rejected claims during implementation.

CMS October 30, 2026 Guidance: What Happens to Pregnancies That Cross Into 2027?

There is an additional development that practices should not overlook.

On October 30, 2026, the Centers for Medicare & Medicaid Services (CMS) issued an enforcement-discretion letter providing temporary flexibility for HIPAA-covered entities regarding maternity episodes that begin in 2026 and continue into 2027.

The guidance permits the temporary use of 2026 maternity CPT codes for billing and payment during 2027 for qualifying transition episodes, subject to the business rules issued by payers and health plans.

This enforcement discretion runs through December 31, 2027.

However, the letter does not establish a universal payment policy or require every payer to accept the same transition approach.

Practices should obtain written instructions from each MCO regarding:

• Which maternity episodes qualify for transition flexibility.
• Whether 2026 codes may be used for services in qualifying episodes.
• How claims should be submitted for pregnancies spanning both years.
• How reimbursement will be calculated.
• Whether separate claim adjustments or resubmissions are required.

Important: Do not assume that the old global maternity codes can continue to be used for every service provided after January 1, 2027. Follow the new code set unless a qualifying transition arrangement and the payer’s written instructions permit otherwise.

Does the No Surprises Act or Medicare Physician Fee Schedule Affect Texas Medicaid OB/GYN Reimbursement?

These federal payment and billing developments are relevant to healthcare providers, but they should not be confused with Texas Medicaid MCO reimbursement requirements.

No Surprises Act

The No Surprises Act establishes federal protections against certain surprise medical bills for eligible commercial insurance coverage.

However, CMS clarifies that its protections do not apply to people with coverage through Medicaid, including Medicaid managed care plans. Medicaid beneficiaries have separate protections against balance billing.

Therefore, the No Surprises Act should not be used as the basis for determining whether a Texas Medicaid OB/GYN claim has been underpaid.

CMS Physician Fee Schedule Updates for 2026–2027

CMS updates the Medicare Physician Fee Schedule annually to establish payment policies and rates for applicable Medicare Part B services.

These updates are relevant to Medicare reimbursement but do not automatically establish Texas Medicaid fee-for-service rates or Medicaid MCO contracted reimbursement.

For Texas OB/GYN practices, the correct payment reference is the applicable Texas Medicaid policy or the individual MCO’s provider agreement and reimbursement requirements.

Practices should also avoid assuming that a Medicare fee-schedule change automatically increases or decreases their Medicaid reimbursement.

Final Thoughts

Texas OB/GYN practices should not assume every low-paying Medicaid claim represents an MCO underpayment. The more reliable approach is to understand the difference between fee-for-service and managed-care reimbursement, review the applicable payer policies, and compare actual payments against contractual requirements.

High-risk pregnancy documentation, obstetric ultrasound authorization, eligibility changes, and maternity claim accuracy all deserve attention during this process.

The January 1, 2027 maternity CPT transition adds another important responsibility. Practices should prepare their coding systems, billing teams, and payer-specific workflows before the new reporting structure takes effect.

With consistent claim audits, accurate documentation, and specialized OB/GYN billing support, practices can identify legitimate reimbursement discrepancies and maintain better control over their Medicaid revenue.

For general informational purposes. Payer requirements, contractual terms, and applicable rules should be verified for the situation involved.