4.3 Adequate Payment Rates

The Lead Agency must set CCDF subsidy payment rates in accordance with the results of the current MRS or ACF pre-approved alternative methodology and at a level to ensure equal access for eligible families to child care services comparable with those provided to families not receiving CCDF assistance. Lead Agencies are also required to provide a summary of data and facts to demonstrate how payment rates ensure equal access, which means the Lead Agency must also consider the costs of base level care and higher quality care as part of its rate setting. Finally, the Lead Agency must re-evaluate its payment rates at least every 3 years. The ages and types of care listed in the base payment rate tables are meant to provide a snapshot of the categories of rates and are not intended to be comprehensive of all categories that might exist or to reflect the terms used by the Lead Agency for particular ages. If rates are not statewide, please provide all variations of payment rates when reporting base payment rates below. Base rates are the lowest, foundational rates before any differentials are added (e.g., for higher quality or other purposes) and must be sufficient to ensure that minimum health, safety, quality, and staffing requirements are covered. These are the rates that will be used to determine compliance with equal access requirements. 4.3.1 Payment rates a. Are the payment rates that the Lead Agency is reporting in 4.3.2 set statewide by the Lead Agency? [x] Yes. i. If yes, check if the Lead Agency: [ ] Sets the same payment rates for the entire State or Territory. [x] Sets different payment rates for different regions in the State or Territory. [ ] No. ii. If no, identify how many jurisdictions set their own payment rates: b. Provide the date the current payment rates became effective (i.e., date of last payment rate update based on most recent MRS or ACF pre-approved alternative methodology as reported in 4.2.1). 10/1/2024 c. If the Lead Agency does not publish weekly rates, then how were the rates reported in 4.3.2 or 4.3.3 calculated (e.g., were daily rates multiplied by 5 or monthly rates divided by 4.3)? To provide a single analysis for the entire industry, and to be consistent with Department of Health and Welfare’s (DHW) current policy to pay providers on a monthly basis, the monthly rate was chosen to be the basis for the market rate analysis. For converting the rates, the preference was to use monthly rates, followed in order by weekly rates, daily rates, and hourly rates. The multiplicative factors used to convert non - monthly rates to monthly rates were: • 4.28 weeks per month; • 21.4 days per month (5 days per week × 4.28 weeks per month); • 171.2 hours per month (40 hours per week × 4.28 weeks per month). 4.3.2 Base payment rates a. Provide the base payment rates in the tables below. If the Lead Agency completed a market rate survey (MRS), provide the percentiles based on the most recent MRS for the identified categories. If the Lead Agency sets different payment rates for different regions in the State or Territory (and checked 4.3.1aii), provide the rates for the most populous region as well as the region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. The preamble to the 2016 final rule states that a benchmark for adequate payment rates is the 75th percentile of the most recent MRS. The 75th percentile benchmark applies to the base rates. The 75th percentile is the number separating the lowest 75 percent of rates from the highest 25 percent. Setting rates at the 75th percentile, while not a requirement, would ensure that eligible families can afford three out of four child care providers. In addition to reporting the 75th percentile in the tables below, the Lead Agency must also report the 50th percentile and 60th percentile for each identified category. If the Lead Agency conducted an ACF pre-approved alternative methodology, provide the estimated cost of care for the identified categories, as well as the percentage of the cost of care covered by the established payment rate. If the Lead Agency indicated it sets different payment rates for different regions in the State or Territory in 4.3.1.a, provide the estimated cost of care and the percentage of the cost of care covered by the established payment rate for the most populous region as well as the region with rates established at the lowest percent of the cost of care. For each identified category below, provide the percentage of providers who are receiving the base rate without any add-ons or differential payments. Provide the full-time weekly base payment rates in the table below. If weekly payment rates are not published, then the Lead Agency will need to calculate its equivalent. i. Table 1: Complete if rates are set statewide. If rates are not set statewide, provide rates for most populous region. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 1039.0 0 Per Month 100.00 241.00 27.00 1177.0 0 1234.0 0 1317.0 0 Family Child Care for Infants (6 months) 685.00 Per Month 100.00 159.00 50.00 685.00 700.00 850.00 Center Care for Toddlers (18 months) 1039.0 0 Per Month 100.00 241.00 27.00 1177.0 0 1234.0 0 1317.0 0 Family Child Care for Toddlers (18 months) 685.00 Per Month 100.00 159.00 50.00 685.00 700.00 850.00 Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Preschool ers (4 years) 877.00 Per Month 100.00 204.00 26.00 1010.0 0 1053.0 0 1176.0 0 Family Child Care for Preschool ers (4 years) 650.00 Per Month 100.00 151.00 34.00 675.00 697.00 800.00 Center Care for School- Age (6 years) 798.00 Per Month 100.00 186.00 31.00 890.00 963.00 1044.0 0 Family Child Care for School- Age (6 years) 642.00 Per Month 100.00 149.00 32.00 650.00 660.00 749.00 ii. Table 2: Do not complete if rates are set statewide. If rates are not set statewide, provide rates for region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 1039.0 0 Per Month 100.00 241.00 27.00 1177.0 0 1234.0 0 1317.0 0 Family Child Care for Infants (6 months) 685.00 Per Month 100.00 159.00 50.00 685.00 700.00 850.00 Center Care for Toddlers (18 months) 1039.0 0 Per Month 100.00 241.00 27.00 1177.0 0 1234.0 0 1317.0 0 Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Family Child Care for Toddlers (18 months) 685.00 Per Month 100.00 159.00 50.00 685.00 700.00 850.00 Center Care for Preschool ers (4 years) 877.00 Per Month 100.00 204.00 26.00 1010.0 0 1053.0 0 1176.0 0 Family Child Care for Preschool ers (4 years) 650.00 Per Month 100.00 151.00 34.00 675.00 697.00 800.00 Center Care for School- Age (6 years) 798.00 Per Month 100.00 186.00 31.00 890.00 963.00 1044.0 0 Family Child Care for School- Age (6 years) 642.00 Per Month 100.00 149.00 32.00 650.00 660.00 749.00 b. Does the Lead Agency certify that the percentiles reported in the table above are calculated based on their most recent MRS or ACF pre-approved Alternative Methodology? [x] Yes. [ ] No. If no, what is the year of the MRS or ACF pre-approved alternative methodology that the Lead Agency used? What was the reason for not using the most recent MRS or ACF pre-approved alternative methodology? Describe: 4.3.3 Tiered rates, differential rates, and add-ons Lead Agencies may establish tiered rates, differential rates, or add-ons on top of their base rates as a way to increase payment rates for targeted needs (e.g., a higher rate for serving children with special needs). a. Does the Lead Agency provide any rate add-ons above the base rate? [ ] Yes. If yes, describe the add-ons, including what they are, who is eligible to receive the add-ons, and how often are they paid: [x] No. b. Has the Lead Agency chosen to implement tiered reimbursement or differential rates? [ ] Yes. [x] No. Tiered or differential rates are not implemented. If yes, identify below any tiered or differential rates, and, at a minimum, indicate the process and basis used for determining the tiered rates, including if the rates were based on the MRS or an ACF pre-approved alternative methodology. Check and describe all that apply: i. [ ] Differential rate for non-traditional hours. Describe: ii. [ ] Differential rate for children with special needs, as defined by the Lead Agency. Describe: iii. [ ] Differential rate for infants and toddlers. Note: Do not check if the Lead Agency has a different base rate for infants/toddlers with no separate bonus or add-on. Describe: iv. [ ] Differential rate for school-age programs. Note: Do not check if the Lead Agency has a different base rate for school-age children with no separate bonus or add-on. Describe: v. [ ] Differential rate for higher quality, as defined by the Lead Agency. Describe: vi. [ ] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: vii. If applicable, describe any additional add-on rates that you have besides those identified above. Does the Lead Agency reduce provider payments if the price the provider charges to private-pay families not participating in CCDF is below the Lead Agency’s established payment rate? [x] Yes. If yes, describe: Payment will be based on the lower of the provider’s usual and customary rates or the Local Market Rate (LMR) (IDAPA 16.06.12.502.01). [ ] No. 4.3.4 Establishing payment rates Describe how the Lead Agency established payment rates: a. What was the Lead Agency’s methodology or process for setting the rates or how did the Lead Agency use their data to set rates? Idaho has conducted a 2024 Market Rate Study, however due to budget constraints Idaho is not able to update our payment rates. Payment rates established using the 2021 rate study will be maintained until the next state fiscal year. At that time, the plan will be amended with the updated payment rates using the current study. Idaho continues to prioritize setting rates with the intention to fund the actual cost of childcare while maintaining program sustainability and subsidy access for children and families. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? The updated market rate and resultant reimbursements focused on ensuring the ability of providers to meet the health, safety, and staffing requirements under the CCDF law. Child care providers rely on the Idaho Child Care Program (ICCP) for consistent, timely payments that sustain their businesses. Additionally, allowing the providers to bill ICCP in the same amount and methodology that they invoice their cash paying clients serves as a stable stream of income for their business. Current and future reimbursement rates were based on the actual charges reported by providers, regardless of their participation in ICCP. While receiving those reimbursement rates, providing participating in ICCP consistently demonstrated full compliance with health, safety, and supervision requirements. Additionally, ICCP funds the cost of health and safety inspections for all participating child care providers. c. How did the Lead Agency use the cost of care, either from the narrow cost analysis or the ACF pre-approved alternative methodology to inform rate setting, including how using the cost of care promotes the stabilization of child care providers? Rates are determined using Local Market Rate Survey, which is inclusive of all Idaho child care providers. Rates were gathered in real time and were inclusive of any rate increases charged by providers. After thorough review of the Local Market Rate Survey, rates are set with the intention to fund the actual cost of childcare while maintaining subsidy access for children and families. This encourages families to access a wide range of child care providers who participate in subsidies, limits out-of-pocket expenses for families, and maintains a sustainable program. Idaho has conducted a 2024 Market Rate Study, however due to budget constraints Idaho is not able to update our payment rates. Payment rates established using the 2021 rate study will be maintained until the next state fiscal year. At that time, the plan will be amended with the updated payment rates using the current study. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? While Idaho's current QRIS participation rates are too small to provide statistically valid cost/quality comparisons, QRIS participation continues to improve, and we are piloting the use of the Cost of Quality Calculator with some QRIS participating programs to better understand their unique expenses. Additionally, when completing Idaho’s Local Market Rate Survey all programs considered to be high quality were included in the rate calculation. High quality facilities with rates high enough to be considered outliers were not excluded. The higher rates charged by those facilities were intentionally included to ensure that rates were statistically valid and inclusive of the higher cost of high quality child care. e. Identify and describe any additional facts (not covered in responses to 4.3.1 – 4.3.3) that the Lead Agency considered in determining its payment rates to ensure equal access. When defining policies for families and providers, we review both balancing continuity for children and policies that are fair to providers. The decision to allow additional rate above the required co-payment is a combination of both levers. Ensuring families have choice and access, while also allowing child care businesses to identify their costs as such to promote and provide quality care. Providers and advocacy groups continue to support the practice of allowing child care providers to charge above the Local Market Rate, as demonstrated in comments provided as feedback to this plan. Families participating with the Idaho Child Care Program (ICCP) continue to access every type of child care provider, including high quality providers participating in Idaho's QRIS program and NAEYC accreditation. Ongoing Market Rate updates continue to ensure that ICCP participating providers will maintain their participation with ICCP, and families will continue to be able to access Idaho's best child care choices.