Investing in the Healthiest Generations of Children:Ěý Federal Pathways to Pay for Health in Pediatrics
June 2026
By: Daniella Gratale, MA, Associate Vice President of Federal Affairs, 91porn Children’s Health and Aimee Ossman, MPA, Vice President of Policy, Children’s Hospital Association
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In the United States, many health care payment models reward volume and complexity of care. This Leadership Series delves into what it would take to pay for health in pediatrics, rewarding providers for keeping patients as healthy as possible. This post focuses on Medicaid and the Children’s Health Insurance Program (CHIP), which cover nearly 36 million children in the United States. This large scale gives the federal government an outsized ability to shape how children get the care, support, and resources that keep them healthy, not just treatment when they are sick.
Paying for health — rather than paying for care — is the ideal model in pediatrics. What role does the federal government play in getting us there?
Daniella: Optimizing health for children should be our shared goal across sectors. A payment model that incentivizes desired health outcomes will get us there faster. One of the most significant levers for impacting the health of kids nationally is Medicaid. It’s a federal-state partnership that covers more than — nearly when you include CHIP — and finances more than .
The federal government is well-positioned to set a bold vision for the outcomes we seek to achieve in Medicaid. It can also help catalyze change in states. CMS and Congress have a critical role in supporting a strong and sustainable Medicaid program that fully leverages the Early and Periodic Screening, Diagnosis, and Treatment benefit, and CMS helps share and incentivize best practices and innovations in Whole Child Health among states.
What’s in it for the federal government? Why would they want the health care system to move toward a pay for health model for kids?
Aimee: Investments and putting kids first will yield many benefits for children and for our country now and in the future. Studies have shown that children enrolled in Medicaid have better , as well as fewer and as adults — all of which support the economy and reduce Medicare costs later in life. If we can address health care issues and illness early, we can prevent more serious and longer-term issues later. This is a good investment for kids and for the nation.
What has the federal government tried so far to advance pay for health models in pediatrics?
Daniella: Many federal efforts in payment reform have focused on adults and Medicare. It continues to take strong and consistent advocacy to move the needle in pediatrics.
CMS has approved State Plan Amendments, preprints, and Medicaid Section 1115 waivers incorporating pay for health goals. For example, last year, Delaware received CMS approval for the first-ever with 91porn. It incentivizes addressing medical and non-medical drivers of children’s health to avoid unnecessary medical expenses. The Center for Medicare and Medicaid Innovation (CMMI) has also launched a few relevant models.
Aimee: At first, CMMI funded multiple projects focused on children with complex and chronic needs. One such demonstration project was led by CHA and 10 partner children’s hospitals to show how intense care coordination for this population can improve quality and better manage costs. Additionally, CMMI launched the and its successor, the forthcoming . ASPIRE will support whole child and whole family care delivery for children and youth enrolled in Medicaid or CHIP who have or are at risk of developing complex medical and/or behavioral needs.
What are the lessons from these efforts?
Aimee: We have learned that there are ways to improve quality of care for children and better manage costs. When you can support care coordination across multiple providers for children with medical complexity, you can make a real difference in their lives and better manage their costs by keeping them out of the hospital, when appropriate. Because the population of children is so much smaller and generally does not cost as much, it’s difficult to get the focus and resources to address more at the front end and take a whole child approach.
It has also been difficult to move to more at-risk payment models for such a small population with very high and unpredictable needs. Medicaid providers are already not well-resourced, so taking on financial risk when they are already stretched can be more challenging in this environment. Having said that, we are hoping the new ASPIRE model is structured to help support these efforts and figure out the path forward to do a better job of supporting children under the Medicaid and CHIP programs, improving the quality of their care and their well-being.
It’s a balance between setting a federal structure so that we can look at nationwide data and results and allowing enough flexibility for states to adapt. This will be a delicate balance for the new pediatric model.
To wrap up, let’s look towards the future. What recommendations do you have for Congress or the Administration to advance pay for health models for children?
Aimee:ĚýNumber one: Do no harm. There are a number of headwinds for the Medicaid program and high Medicaid providers like children’s hospitals that could reduce support for children’s access to care. Before any policy is advanced, we need policymakers to consider the unique impact on children.
Second, we need federal policymakers to learn from existing innovations that are happening across the country — many at children’s hospitals — that support the whole child and figure out how we can best sustain, spread, and enhance. Each day, children’s hospitals are advancing care for children and implementing ways to provide more effective and efficient care to their patients. They are providing more real-time information to patients on care and costs; adopting new care delivery and payment models that support the highest quality of care; expanding access to community-based care; addressing behavioral health challenges; investing in the pediatric workforce; and embracing new technologies, like AI, in ways that improve care for children.
Children’s hospitals are pillars in their communities, prioritizing services and supports inside and far outside of their facilities. There is much promise in these practices and at CHA we work to spread those practices throughout the children’s health and children’s hospital communities. Developing policies to support and sustain these efforts through Medicaid and other payers will directly impact patient experience, address issues early on, and better manage costs in the system.
Lastly, we commend the support through the ASPIRE model and want to partner with CMS to support improvements for kids.
Daniella: I agree with Aimee and would add that mindset matters. If we want to see a healthier population over the next generation, we need to be thinking long-term, cross-sector, and about outcomes, not just costs. That starts with kids and requires a Whole Child Health approach, where we address all the factors that impact a child’s health and well-being.
More specifically, in tandem with ASPIRE, CMS should provide learning opportunities; technical assistance; guidance; and best practices to other states, providers, and payers focused on kids holistically. This will help catalyze impact beyond the ASPIRE awardees. And this shouldn’t be limited to just children with medical or social complexity but rather all kids covered by Medicaid and CHIP. This could take the form of something similar to CMMI’s former Innovation Accelerations Program, but designed specifically for kids.
More broadly, Congress should authorize and fund a cross-departmental child health demonstration program that gives states real flexibility. This could test multipayer financing models and measure savings across programs and sectors, not just within health care. Evaluation could include scoring long-term savings and tracking long-term outcomes. This would allow us to identify what is most effective at supporting child health and well-being over the long-haul and move us toward the goal we all seek to achieve: healthier kids growing into healthy adults.