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: The Lead Agency acknowledges the CCDF regulations regarding prospective payment changed effective 4/30/2024. The Lead Agency’s current IT system that handles provider payments does not have the capability to pay prospectively and the Lead Agency is exploring new IT solutions to meet this requirement. The Lead Agency intends to submit a waiver request to come into compliance on this provision. 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. [ ] 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: [x] 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: The Lead Agency acknowledges the CCDF regulations regarding payment based on enrollment changed effective 4/30/2024. The Lead Agency’s current IT system that handles provider payments does not have the capability to pay based on enrollment and the Lead Agency is exploring new IT solutions to meet this requirement. The Lead Agency intends to submit a waiver request to come into compliance on this provision. 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: The Lead Agency directs Child Care Resource and Referral to collect information on all licensed and licensed-exempt providers throughout the state, including if they charge mandatory registration fees. As of April 2024 only 34% of licensed providers and .04% of licensed-exempt providers indicated that they charge a mandatory registration fee. 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: The CCA Provider Agreement outlines the terms and conditions the provider shall follow to obtain payment including information about payment policies and the rates a provider will be paid. Providers are not charged any fees. The Enrollment Certificate issued on behalf of the eligible family and sent to the provider informs the provider of the schedule and number of half-day units that have been approved for each child needing care. Providers call the toll free number and contact the child care payments unit to dispute or resolve incorrect information regarding payments. 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: When changes are reported that affect the number of authorized units, co-pay, provider family is choosing to use, or when a family is canceled, the provider(s) is sent information in writing which includes the effective date of the change. Lead agency staff process changes as they are received and generally within 10 days of receipt. The same day the information is processed and entered into the lead agency's system written notification is sent to the provider. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Most payment questions can be solved through direct communication between the provider and lead agency. However, if the provider disagrees with any lead agency decision they may appeal. Anyone has the right to appeal any decision made by the Department of Health and Human Services and to request an appeal hearing. No one may limit or interfere with this right. Food Assistance, Medicaid, Child Care Assistance, Family Planning Program, and Family Investment Program appeals may be made in person, by telephone or in writing. All other appeals must be requested in writing. Providers can write a letter explaining the reason they disagree with the Department's decision or they can complete an Appeal and Request for Hearing form online. If they have questions on how to complete the Appeal and Request for Hearing form, they may call the Appeals Section at (515) 281-3094. The Appeals Section reviews each appeal to see if a hearing can be granted. Each appeal must meet the following criteria (1)The Department has taken an action that can be appealed, (2) The Department has issued a written notice about the negative action (3) You filed your appeal: within 15 calendar days for tax/debtor offsets or within 30 calendar days of the written notice for all other programs. If providers are eligible for a hearing, the Appeals Section will send their appeal file to the Department of Inspections and Appeals-Division of Administrative Hearings. They will schedule a telephone hearing with an administrative law judge and send a written notice of the date and time. If providers do not get a hearing, the Appeals Section will send a letter explaining why your appeal was denied. Once the Administrative Law Judge has made a decision on the appeal, a Proposed Decision will be issued. It will explain the issue of the appeal, a brief summary of the testimony given during the hearing, and the judge’s decision. If providers disagree with the Proposed Decision, they may request a review. An attorney, representative or the provider may request a review. The Department also may request a review if they disagree with the Administrative Law Judge’s decision. If your review request is received within the appropriate timeframes, you will get a letter indicating that your case is under review. Once a decision has been reached on your review, you will be sent a Final Decision. The Final Decision will explain the outcome of the review process. f. Other. Describe any other payment practices established by the Lead Agency: N/A 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? The Lead agency currently has a timeliness policy to pay completed provider invoices within seven business days. Timeliness of payment information is tracked by the Lead Agency and over 99% of the time payments are made within the 7 business day timeframe. This policy applies to all child care providers (licensed and licensed-exempt) to incentivize a full range of providers to participate in the CCA program. This shows up in the number of child care providers willing to accept CCA payments. When the data was checked in April of 2023 84.2% of child care providers had an active CCA provider agreement.