4.4 Payment Practices to Providers

Lead Agencies must use subsidy payment practices that reflect practices that are generally accepted in the private pay child care market. The Lead Agency must ensure timeliness of payment to child care providers by paying in advance or at the beginning of delivery of child care services. Lead Agencies must also support the fixed cost of child care services based on paying by the child’s authorized enrollment, or if impracticable, an alternative approach that will not undermine the stability of child care programs as justified and approved through this Plan. Lead Agencies must also (1) pay providers based on established part-time or full-time rates rather than paying for hours of service or smaller increments of time, and (2) pay for reasonable, mandatory registration fees that the provider charges to private-paying parents. These policies apply to all provider types unless the Lead Agency can demonstrate that in limited circumstances the policies would not be considered generally-accepted payment practices. In addition, Lead Agencies must ensure that child care providers receive payment for any services in accordance with a payment agreement or an authorization for services, ensure that child care providers receive prompt notice of changes to a family’s eligibility status that could impact payment, and have timely appeal and resolution processes for any payment inaccuracies and disputes. 4.4.1 Prospective and enrollment-based payment practices Lead Agencies must use payment practices for all CCDF child care providers that reflect generally- accepted payment practices of providers serving private-pay families, including paying providers in advance or at the beginning of the delivery of child care services and paying based on a child’s authorized enrollment or an alternative approach for which the Lead Agency must demonstrate paying for a child’s authorized enrollment is not practicable and it will not undermine the stability of child care programs. Lead Agencies may only use alternate approaches for subsets of provider types if they can demonstrate that prospective payments and authorized enrollment-based payment are not generally-accepted for a type of child care setting. Describe the Lead Agency payment practices for all CCDF child care providers: a. Does the Lead Agency pay all provider types prospectively (i.e., in advance of or at the beginning of the delivery of child care services)? [ ] Yes. If yes, describe: [x] No, it is not a generally-accepted payment practice for each provider type. If no, describe the provider type not paid prospectively and the data demonstrating it is not a generally-accepted payment practice for that provider type, and describe the Lead Agency’s payment practice that ensures timely payment for that provider type: Arkansas is seeking to move toward a system that enables paying of providers based on enrollment. When this is accomplished, the long-term goal would be to pay providers prospectively. However, to accomplish this the technical systems for payment must be replaced with a system that is designed for the new purposes. The new system will enable Arkansas to update presumptive eligibility language, clarifying copay caps at 7% of family’s gross income as applying per family regardless of the number of children participating in CCDF. The new system will continue to leverage eligibility from other public assistance programs and seek to include additional systems such as Head Start, Early Head Start, etc. particularly for vulnerable populations. This work will be done within the next year but not before the October 1, 2024, implementation plan. In addition to changes in payments to providers, the Office of Early Childhood will engage in intentional supply- building by establishing strategic pilot programs designed to provide greater access while informing leadership of lessons learned from local implementation. Addressing provider shortages by utilizing new funding mechanisms and technology solutions to support the opening and expansion of quality care facilities statewide will also be included in strategic planning. b. Does the Lead Agency pay based on authorized enrollment for all provider types? [ ] Yes. The Lead Agency pays all providers by authorized enrollment and payment is not altered based on a child’s attendance or the number of absences a child has. [x] No, it is not a generally-accepted practice for each provider type. If no, describe the provider types not paid by authorized enrollment, including the data showing it is not a generally-accepted payment practice for that provider type, and describe how the payment policy accounts for fixed costs: Arkansas is seeking to move toward a system that enables paying of providers based on enrollment. When this is accomplished, the long- term goal would be to pay providers prospectively. However, to accomplish this the technical systems for payment must be replaced with a system that is designed for the new purposes. The new system will enable Arkansas to update presumptive eligibility language, clarifying copay caps at 7% of family’s gross income as applying per family regardless of the number of children participating in CCDF. The new system will continue to leverage eligibility from other public assistance programs and seek to include additional systems such as Head Start, Early Head Start, etc. particularly for vulnerable populations. This work will be done within the next year but not before the October 1, 2024, implementation plan. In addition to changes in payments to providers, the Office of Early Childhood will engage in intentional supply-building by establishing strategic pilot programs designed to provide greater access while informing leadership of lessons learned from local implementation. Addressing provider shortages by utilizing new funding mechanisms and technology solutions to support the opening and expansion of quality care facilities statewide will also be included in strategic planning. [ ] It is impracticable. Describe provider type(s) for which it is impracticable, why it is impracticable, and the alternative approach the Lead Agency uses to delink provider payments from occasional absences, including evidence that the alternative approach will not undermine the stability of child care programs, and thereby accounts for fixed costs: 4.4.2 Other payment practices Lead Agencies must (1) pay providers based on established part-time or full-time rates rather than paying for hours of service or smaller increments of time, and (2) pay for reasonable, mandatory registration fees that the provider charges to private-paying parents, unless the Lead Agency provides evidence that such practices are not generally-accepted for providers caring for children not participating in CCDF in its State or Territory. a. Does the Lead Agency pay all providers on a part-time or full-time basis (rather than paying for hours of service or smaller increments of time)? [x] Yes. [ ] No. If no, describe the policies or procedures that are different than paying on a part- time or full-time basis and the Lead Agency’s rationale for not paying on a part-time or full-time basis: b. Does the Lead Agency pay for reasonable mandatory registration fees that the provider charges to private-paying parents? [x] Yes. If yes, identify the fees the Lead Agency pays for: Any additional fees including registration and semester fees. [ ] No. If no, identify the data and how data were collected to show that paying for fees is not a generally-accepted payment practice: c. Describe how the Lead Agency ensures that providers are paid in accordance with a written payment agreement or an authorization for services that includes, at a minimum, information regarding provider payment policies, including rates, schedules, any fees charged to providers, and the dispute-resolution process: OEC will reimburse child care providers in accordance with the written arrangement outlined in the CCDF Program Participant Agreement. Providers can bill for services based on the electronic OEC Certificate of Authorization. The certificate does not include reasonable charges to parents for special events outside the usual daily program costs. Further, the Agreement gives instructions for participants to appeal any adverse action taken by OEC. d. Describe how the Lead Agency provides prompt notice to providers regarding any changes to the family’s eligibility status that could impact payments, and such a notice is sent no later than the day that the Lead Agency becomes aware that such a change will occur: All authorization worksheets with full details of the approved services are immediately available on the Child Care Billing website after a change has been entered into the Child Care Eligibility System. Also, if a case closes, the Family Support Specialist will email the facility. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: The Participant may appeal any adverse action taken by OEC (including audit, billing, payment, termination, etc.) by filing a written notice of appeal within fifteen (15) days from the Participant's receipt of OEC notification in accordance with OEC Administrative Appeal/Hearing Procedures. f. Other. Describe any other payment practices established by the Lead Agency: 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? Arkansas currently has 1959 licensed child care providers. Of that 1959, 1021 have any active CCDF Program Participant Agreement making them eligible to accept subsidy. All CCDF providers, in all categories of care, may bill immediately after the Certificate of Authorization has been received and services are rendered. Payment is generally directly deposited into the provider’s account within 5-10 days.