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: Illinois is not currently paying providers prospectively. A 2-year waiver request will be submitted. 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: Illinois pays provider for 100% of the child’s eligible days if they attended at least 70% of those days. To lessen the financial impact of extraordinary events which are beyond the control of child care providers, a center experiencing less than 50% of their expected CCAP enrollment due to an extraordinary event (epidemic, flooding, heat failure…) may apply for a Child Care Assistance Program (CCAP) Attendance Exemption. Illinois will be requesting a waiver to delay implementation of this requirements until policies, rules and systems are modified and a budget impact analyses is completed. Illinois was notified of non-compliance of with 45 CFR 98.45(l)(2) in January 2023. The former lead agency required additional time to make payment system modifications to calculate the 70% attendance rule on a child-by-child basis. Due to the age of the current system, this may not be possible until the planned replacement of that system. 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: The former Lead Agency was notified March 13, 2024 of being out of compliance. Effective 7/1/24, licensed and license- exempt child care centers that indicate they charge a registration fee will be paid a registration fee of $50 for 1 child and $100 for multiple children. [ ] 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: The IDEC Approval of Request for Child Care Payments is sent to approved applicants and providers once eligibility has been determined. Revised copies are sent to clients and providers at any time there is a change to the case that affects the information that is included in the notice (rates, approved days, co-payment amounts, and others). The form lists the following relevant information: eligibility date range with a statement that payments cannot be made prior to the date of approval; parent co-payment amounts that the provider is responsible for collecting from families; a list of approved children in the family with information about all applicable daily rates, eligibility by the number of days per week; information on the client's right to appeal the decision within 30 days; a toll- free number to request an appeal; and a statement that the client may be represented by anyone of their choice. Monthly billing certificates are sent to providers listing all approved children for the month of service, the number of full time and part time days they are eligible for payment, the families' copayments The lead agency reviews the most recent Market Rate Survey to identify common payment practices. Practices will be revised based on budget and system updates. 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: Revised approval notices are issued to the family and provider whenever a change is made to any aspect of the case. Changes take affect the month following the reported change. Changes to cases based on reported information are to be entered into the CCMS and revised approval notices must be issued within 30 days of receipt of the change notification. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: All applicants for or recipients of child care assistance have the right to appeal unfavorable decisions made about their child care case by CCR&R staff or Site Administered providers. Issues that can be appealed include, but are not limited to, the denial or cancellation of benefits, the copayment amount, the payment amount or non- payment of a child care subsidy, or any other unfavorable decision. Appeals must be filed within 60 days. The 60-day period begins the day after the unfavorable notice is signed and mailed. If the sixtieth day falls on a non-workday, the parent has until the end of the next workday to request a hearing. Families and center providers may file an appeal through the IDHS Bureau of Administrative Hearings. Home child care providers, who are represented by a labor union, can file a grievance where the first step is within division and the 2nd with Bureau of Administrative Hearings. 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? Illinois’ payment policies and processes are very similar for all provider types. IDHS, the former Lead Agency, has improved its payment vouchering system, which has reduced the time it takes for payments to be issued by up to 1 week. This effort allows for more reliable and timely reimbursement and helps to ensure that a provider’s ability to carry costs over time is less of an impediment to accepting subsidy.