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)? In Kansas, full-time blocks of 215 hours per month are used to calculate benefits. 215 divided by 4.3 weeks equals 50 hours a week. Since all the examples in 4.3.1.a. are for full-time care, the base payment would be calculated by multiplying the hourly rate listed by 50 hours to calculate the weekly rate. 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) 314.00 Per Week 30.00 314.00 90.00 245.00 259.50 279.00 314.00 Per Week 100.00 Family Child Care for Infants (6 months) 187.50 Per Week 67.00 187.50 75.00 168.50 168.50 187.50 127.50 Per Week 147.00 Center Care for Toddlers (18 months) 264.00 Per Week 43.00 264.00 85.00 206.50 216.50 231.00 264.00 Per Week 100.00 Family Child Care for Toddlers (18 months) 168.50 Per Week 73.00 168.50 75.00 144.00 154.00 168.50 127.50 Per Week 132.00 Center Care for Preschool ers (4 years) 206.50 Per Week 43.00 206.50 75.00 182.50 195.50 206.50 200.50 Per Week 132.00 Family Child Care for Preschool ers (4 years) 168.50 Per Week 74.00 168.50 75.00 144.00 149.00 168.50 127.50 Per Week 132.00 Center Care for School- Age (6 years) 182.50 Per Week 48.00 182.50 75.00 144.50 158.50 182.50 175.50 Per Week 104.00 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? Family Child Care for School- Age (6 years) 158.50 Per Week 73.00 158.50 75.00 144.00 144.00 158.50 128.50 Per Week 123.00 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) 366.50 Per Week 50.00 366.50 75.00 336.50 348.00 366.50 313.50 Per Week 117.00 Family Child Care for Infants (6 months) 226.00 Per Week 76.00 226.00 75.00 202.00 211.50 226.00 127.00 Per Week 178.00 Center Care for Toddlers (18 months) 312.50 Per Week 48.00 312.50 75.00 281.50 291.00 312.50 263.50 Per Week 119.00 Family Child Care for Toddlers (18 months) 216.50 Per Week 75.00 216.50 75.00 192.50 192.50 216.50 127.50 Per Week 170.00 Center Care for Preschool ers (4 years) 275.50 Per Week 50.00 275.50 75.00 249.00 262.50 275.50 187.50 Per Month 147.00 Family Child Care for Preschool ers (4 years) 211.50 Per Week 73.00 211.50 75.00 182.50 192.50 211.50 127.50 Per Week 166.00 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 School- Age (6 years) 240.50 Per Week 52.00 240.50 75.00 214.00 219.00 240.50 198.50 Per Week 121.00 Family Child Care for School- Age (6 years) 192.50 Per Week 94.00 192.50 75.00 168.50 173.00 192.50 142.50 Per Week 135.00 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? [x] 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: We pay an additional 15% above the maximum rate for relatives and family child care homes and an additional 10% above the maximum rate for child care centers if they are caring for a child that is in foster care in the state of Kansas through direct payments to providers using the electronic benefit transfer system. Through individual grants for the Kansas Early Head Start Child Care Partnerships, Kansas Early Head Start grantees receive for their own classrooms and pay a quality payment to participating child care providers, on top of the base subsidy payment that is issued to and paid by the parents. Amounts vary based on the individual grantees' agreements with their participating providers and their grant. [ ] No. b. Has the Lead Agency chosen to implement tiered reimbursement or differential rates? [x] Yes. [ ] 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. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: Parents of children with a physical, emotional or mental disability may request an enhanced benefit rate for child care services. Documentation of the child's disability and/or special need must be provided by a skilled professional. Additional information must be provided by the care provider indicating the type of enhanced child care being provided to the child and what type of education and/or training the provider possesses in order to provide the care needed. If approved, that rate is $7.25 per hour, regardless of the child's age or child care setting is used to calculate child care benefits for the family. Benefits are issued in full and part time blocks, so for a child approved for the enhanced rate, benefits would be $935.25 per month (129 hours X $7.25 per hour) for a part-time block and $1,558.75 per month (215 hours X $7.25 per hour) for a full-time block. In Kansas, child care benefits are calculated separately for each child. Benefits are determined by a combination of factors: the age of the child; the numbers of hours of care each month the child needs; the family's family share, the child care provider's standard rate; and DCF maximum rates. Benefits for each child are automatically put into the parent's EBT (Electronic Benefit Transfer) account at the start of each month. All child care benefits are put into a single child care account for that household. Providers may charge parents for their child's slot, (full or part time) and/or absent days, if this is consistent with the provider's stated private pay policy. Parents are responsible for their family share amount and any additional charges agreed upon between themselves and their child's providers. Kansas' system of issuing benefits to parents and parents’ being responsible for payment to provider's based upon their provider's individual payment practice mirrors private pay. One benefit of this system allows for providers to be paid in advance if this practice is consistent with their private pay families. 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? [ ] Yes. If yes, describe: [x] 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? The Kansas Child Care Assistance program provider base rates are currently set at the average of the 75th percentile from the latest 2024 Kansas Child Care Market Analysis on 10/1/24. Higher rates than the 75th percentile are used for those rates that were identified on the Narrow Cost Analysis as needing to be higher to meet the licensing regulations, which include the CCDF health, safety, quality and staffing requirements. They are set at the 75th percentile or the Narrow Cost Analysis rate for all age groups and based on the following factors: 1) Geographic location (by county), 2) age of child, and 3) type of care (Licensed Center and Licensed Family Child Care homes). Out of home relative care rates are calculated at 65% of the rate for licensed child care homes and in home relative care rates are a set 1/3 of the current minimum wage for the state. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? The Kansas child care cost model reflects the standards that licensed child care providers are required to meet, including the health, safety, quality and staffing requirements. Prenatal to Five Fiscal Strategies, the contractor who completed the Kansas Narrow Cost Analysis, reviewed these standards to determine the cost drivers to include in the model and confirmed assumptions with the lead agency. Primarily these costs are driven by child-to-staff ratios, group size limits, and caregiver qualifications. The cost for educators to participate in annual training and professional development, at 16 hours per year, were also included to meet licensing requirements and health and safety standards. All non-personnel expenses necessary to operate a program are also captured in the model, including occupancy costs based on the square footage requirements detailed in licensing. To understand what gaps, if any, exist between the estimated cost of care and the current market prices charged by providers in Kansas, Prenatal to Five Fiscal Strategies conducted a gap analysis. The 75th percentile of the current market rates, based on the 2024 market rate survey, were used for this analysis. For infants, toddlers, and preschoolers the full-time rate was used. The school age analysis uses 60 percent of the full-time rate, to align with the assumptions under the cost estimate. To provide a geographic analysis, the results of the statewide cost of care analysis were compared to the statewide average rate as well as to the three cost areas identified by the market rate study. Higher rates than the 75th percentile are used for those rates that were identified on the Narrow Cost Analysis as needing to be higher to meet the licensing regulations, which include the CCDF health, safety, quality, and staffing requirements. 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? As rates were set at the 75th percentile of the latest Market Rate Survey and the narrow cost analysis findings around what rates need to be to meet health, safety, quality and staffing requirements, the cost of care for meeting these requirements were considered. As the lead agency allows the child care provider to charge up to the maximum rate, even if they are not doing that with their private pay families, this helps the provider to ensure adequate funds to operate. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? The Lead Agency does not have any child care programs that have completed the first four foundations links in Links to Quality, which are considered the first tier of quality in our quality and improvement system. The Narrow Cost Analysis included the anticipated higher cost associated with these four foundational links. The Lead Agency will look at funding available, the incentives that are included in Links to Quality, and determine if the incentives alone are not enough to offset the cost and if differential/add- on rates may be needed 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. The Lead Agency set rates using the concept of hold harmless, where no rates were reduced with the findings from the new Market Rate Survey and Narrow Cost Analysis.