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: CDEC does not currently pay any providers prospectively. CDEC is requesting a waiver to pay all providers prospectively by August 1, 2026. CDEC does not have data demonstrating that it is not a generally-accepted payment practice. CDEC currently pays all provider types every week for the care period two weeks prior. CDEC program rules will be revised effective August 1, 2026 to pay all providers prospectively through the rule-making process that engages counties, child care providers, and family advocacy groups. The rule-making process will take place to change rule to pay based on enrollment for all ages with full implementation by August 1, 2026. 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: CDEC pays all licensed providers for authorized enrollment for children ages 0-36 months. CDEC program rules will be revised effective April 1, 2026 through the rule-making process that engages counties, child care providers, and family advocacy groups to pay based on enrollment for all ages which will allow time for the appropriate technology changes to be completed with full implementation by August 1, 2026. [ ] 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? [ ] Yes. If yes, identify the fees the Lead Agency pays for: [x] No. If no, identify the data and how data were collected to show that paying for fees is not a generally-accepted payment practice: Counties have the option to reimburse providers for Activity, Registration, and Transportation fees when they charge private-pay families these fees. CDEC program rules will be revised effective April 1, 2026 to pay all providers for registration fees through the rule-making process that engages counties, child care providers, and family advocacy groups to pay reasonable mandatory registration fees with full implementation by August 1, 2026. 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: All providers enter into a state developed fiscal agreement with each county they do business with to provide child care paid by CCCAP. The fully executed fiscal agreement includes information about payment policies, rates, fees charged to providers and the dispute resolution process. 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: Counties are required to send a written notice via mail, fax, email, electronically, or hand- delivery to providers within one business day of an action that negatively impacts a family’s eligibility status or provider payment. Providers also have real time access to these notices in the Attendance Tracking System when the county creates them. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Providers can address payment inaccuracies within 60 days of the month care was provided via a manual claim form. County staff review the information and process payments approved via the form. Providers can also request an informal conference in writing with county staff and supervisors to address payment issues within 15 days of the action. Counties are required by CCCAP rule to hold the conference within two weeks of the request and provide a resolution within 15 business days of the conference. 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? CDEC pays CCCAP providers who are licensed based upon an approved alternative methodology that considers the cost of child care in the state-established rate. Counties can set rates for other care types to include non-traditional and additional needs care in their communities. Counties can also engage in slot contracts with providers to support supply in their communities. The Colorado Department of Human Services Child Care Automated Tracking system (CHATS) generates weekly payments. In addition, for payments that are not automatically reimbursed through CHATS in which case a provider must submit a manual bill, county departments of human/social services must pay providers within 21 days of receiving a complete manual claim form.