Raising fees is one of the primary means that State Medicaid Programs employ to maintain provider participation. While a number of studies have sought to quantify the extent to which this policy retains or attracts providers, few have looked at the impact of these incentives on patients. In this study, the authors used Medicaid claims data to examine changes in volume and site of prenatal care among women who delivered babies after the Maryland Medicaid Program raised physicians fees for deliveries 200 percent at the end of its 1986 fiscal year. Although the State's intent was to stabilize the pool of nonhospital providers who were willing to deliver Medicaid babies, it was also hoped that women would benefit through greater access to prenatal care, especially care rendered in a nonhospital setting. The authors' hypotheses were that (a) the fee increase for obstetrical deliveries would result in an increase in prenatal visits by women on Medicaid, and (b) the fee increase would lead to a shift in prenatal visits from hospital to community based providers. The data for Maryland's Medicaid claims for the fiscal years 1985 through 1987 were used. Comparisons were made in the average number of prenatal visits and the ratio of hospital to nonhospital prenatal visits before and after the fee increase. Data for continuously enrolled women who delivered in the last 4 months of each fiscal year were analyzed for between and within year differences using Student's t-test and ANOVA techniques.(ABSTRACT TRUNCATED AT 250 WORDS)