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: All CCAP participating providers are paid the month after services are provided. Care provided in June will be reimbursed beginning July 1, 2024. We are currently researching the change requirements of paying prospectively for our state with plans to move forward during the current state plan cycle. b. Does the Lead Agency pay based on authorized enrollment for all provider types? [x] 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: [ ] 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: Enrollment fees can be paid for child cares involved in KTAP (Kentucky Transitional Assistance Program) or CCPO (Child Care Protective) programs. Will be adding TENF (Teen Parents enrolled in school/GED) and CCPE (Child Care Preventive) participants. CCIE (Child Care Income Eligible) participant case are not eligible for enrollment fee payments because these cases are not considered protected populations. 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: CCAP certificate is reviewed and signed by provider and recipient which details all information including Parent and Provider responsibilities on signature pages. The DCC-94 "Child Care Service Agreement and Certificate" is required to be completed and signed by both the provider and the recipient. The DCC-94, Child Care Service Agreement and Certificate contains Family and Provider information (names, addresses, phone numbers, case number) Enrollment Information (Child name, DOB, Individual ID, Start date, End date, Care Level, Part day and Full day rates of provider, daily copay and CHFS payment, Scheduled Days of care, special needs and non-traditional care notations), Address to return the signed certificate, phone number to contact for help, Detailed Conditions of Acceptance for recipient along with signature and date lines. The condition of acceptance includes information about 12- month eligibility, payment agreement, payment of copays, responsibility for overage charges, attendance information, the need to report changes timely, request for service appeal contacts, agreement that if the child care provider is deemed unsafe the agreement may be terminated, agreement that benefits must be paid back if not entitled to receive and rights and responsibilities are understood. Conditions of Acceptance for the child care provider to provide services for children on form, to charge and collect copays, to provide any changes to the agreement to the cabinet, reimbursement procedures and policy, regulations connected to child care providers, agreement to pay back any benefits non entitled, the need to report any business changes, termination of agreement policy, and the dispute resolution process. The client dispute resolution process: 1 If either party doesn’t agree with the info on the certificate, they do not sign it. The parent would contact Family Support to have changes made. By signing the certificate, both parties are agreeing to the information on the first page. The certificate is NOT a contract so if issues are reported then changes can be made to the information on page 1. 2) Dispute resolution for the CCAP case is shared with the parent on the DCC-94.1 (same contact as the underlined below) but is meant for disputes for the CCAP case, not enrollment. 3) Below is the excerpt from the certificate, with the underlined statement relating to the follow up question. "As recipient of child care assistance on behalf of the named children, I have chosen to send my children to the named child care provider as agreed by the cabinet or its designee, the child care provider and me. I agree to pay the assessed family co-pays according to the prearranged plan for such payments to the child care provider. I understand and agree that I will be responsible for any amount exceeding the total daily payment (overage charges) and for days the children are absent from care which are not payable by the cabinet according to the provisions of 922 KAR 2:160. I agree to provide the child care provider with any requested documentation of the reason my children are absent from care. I agree to notify the cabinet or its designee and the child care provider within ten (10) days of changes relevant to this Child Care Services Agreement and Certificate. I understand that I have the right to receive fair and impartial treatment from my worker regardless of my age, sex, race, religious beliefs, political affiliation, national origin, or disability. If I am dissatisfied with the action taken, I may request a service appeal within thirty (30) days from the date of action by filing a written request with the Cabinet for Health and Family Services, Division of Administrative Hearings, Families and Children Administrative Hearings Branch,105 Sea Hero Road, Suite 2, Frankfort, KY 40601. I may be represented by an attorney or other spokesperson. A complaint reported on the provider of services is subject to public inspection as specified in the Public Records Law KRS 61.872 to 61.884. I agree and understand that this agreement may be terminated upon notice that the cabinet has determined that conditions or circumstances at the child care premises put children at risk of abuse, neglect or exploitation pursuant to KRS 620. I agree and understand that I must pay back benefits that are paid on my behalf to which I am not entitled to receive. I understand that benefits will not be issued if I am currently disqualified due to fraud in accordance with 922 KAR 2:020. I have reviewed this form. I fully understand my rights and responsibilities and the terms of the agreement are understood and satisfactory. " The Child Care Provider Payment Dispute Resolution Process: After a Provider Billing Form (PBF) has been submitted by the provider, processed, and payment issued, a Remittance statement is generated from the KICCS system for the provider. Upon reviewing the remittance statement, if the provider questions a payment, they email the CCAPProviderPayments@ky.gov inbox for guidance. DCC staff review the enrollment, certificate, and payment for any issues. If an underpayment is discovered, DCC will reconcile the payment with a Prior Period Adjustment (PPA) to the provider. Providers are made aware of the PPA process when completing the Provider CCAP Billing Basics training required of each new provider and yearly for existing providers. The training and reference material is also included in the initial application packet to become a CCAP Subsidy provider. Additionally, the reference and training material is shared with providers when further training is needed, or clarifications are requested by the provider. Provider CCAP Billing Basics: https://www.hdilearning.org/product/ece-080-2/ https://www.chfs.ky.gov/agencies/dcbs/Documents/dcc94childcareserviceagreement.pdf DCC 94 Child Care Service Agreement and Certificate- https://www.chfs.ky.gov/agencies/dcbs/dcc/Documents/dcc94a.pdf 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: The process of notifying a child care provider of changes in a family’s eligibility begins 10 days prior to the date the change is to occur. If the family reports a change, a notice is sent to the provider on the day the family reports the change to Family Support. The notice indicates the change will happen 10 days from the date the family reported. If a change is non-family reported but due to other circumstances, a 10-day notice is sent to the child care provider 10 days prior to the last day of the month the change occurs. Citation: Section 13 (1) (2) (5) (6) (7) DCC 94C-Provider Notification Letter, DCC 105- Child Care Denial/Discontinuance Notice e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: A Prior Period Adjustment (PPA) is used to correct payment issues for an established enrollment. A PPA can only be used if the child has received payments in previous months. Per, (922.KAR 2:160, 17(g)) payments or adjustments cannot be made to the payment ninety (90) days after the month care was provided. After the payment is received, the provider has access to the Remittance statement which serves as a detailed receipt for all CCAP payments. Providers are encouraged to review the remittance and contact DCC immediately when an inaccuracy is suspected. The IEES system generates reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analyst conduct an analysis of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential over- payments, theft, and misappropriation of funds. Case reviews and interviews are conducted for Inadvertent Error (IE) determination. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over- payments, or other potentially fraudulent activities. Designated Lead Agency staff during a review may request from the provider enrollment and attendance sign in sheets (DCC-97E) for comparison to the Kentucky Integrated Child Care System (KICCS) billing and payment records for errors and potential fraud or overpayment. The Claims Section processes documented findings of fraud and, if over $5,000 (Applicants) and $10,000 (Child Care Providers), the Office of Inspector General (OIG) conducts further investigation and potential prosecution. Some of the mechanisms used to identify violations are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. The Lead Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. Designated Lead Agency staff may audit provider records upon report or detection of potential fraud. Some of the tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. Citation: Section 15 (1) (g) MS 5015 5020 (922.KAR 2:160, 17(g)) The Child Care Provider Payment Dispute Resolution Process: After a Provider Billing Form (PBF) has been submitted by the provider, processed, and payment issued, a Remittance statement is generated from the KICCS system for the provider. Upon reviewing the remittance statement, if the provider questions a payment, they email the CCAPProviderPayments@ky.gov inbox for guidance. DCC staff review the enrollment, certificate, and payment for any issues. If an underpayment is discovered, DCC will reconcile the payment with a Prior Period Adjustment (PPA) to the provider. Providers are made aware of the PPA process when completing the Provider CCAP Billing Basics training required of each new provider and yearly for existing providers. The training and reference material is also included in the initial application packet to become a CCAP Subsidy provider. Additionally, the reference and training material is shared with providers when further training is needed, or clarifications are requested by the provider. Provider CCAP Billing Basics: https://www.hdilearning.org/product/ece-080-2/ Any adverse actions may be appealed through the Cabinet's established administrative processes. The administrative process may then be appealed to the Franklin County Circuit Court. These appeal rights/options are shared at each point a decision is rendered. f. Other. Describe any other payment practices established by the Lead Agency: The Provider CCAP Billing Basics training is a yearly required course for all participating CCAP providers. Coaching by Claims and Payment staff is necessary. 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? CCAP is offered to all Licensed, Certified, and Registered providers. In addition to CCAP being offered, Child care programs In Kentucky are incentivized to participate in the CCAP program for many reasons. CCAP payments have been paid based on enrollment of the child not attendance since 12/1/2022, guaranteeing payment for CCAP enrollments regardless of days missed by the child thus allowing for monetary security. CCAP payments are processed overnight the day the provider submits allowing for a general 2-3 day turn around for reimbursement from the date of submission. CCAP offers KICCS portal submission of payments to all providers. The portal removes the possible delays of mailing the provider billing forms and allows for an expedient process. CCAP participating programs also have access to incentive rates as $5 a day extra for Special Needs enrollments and Accredited programs as well as $10 a day extra for each non-traditional hour’s enrollments. These are funds in addition to the provider rate or State Max Rate CCAP currently reimburses the provider. CCAP participating providers can have staff with children attending their center apply for CCAP and receive the child care employee income exclusion. Staff taking advantage of the exclusion do not need to work at the same center as their child, but data shows most do. CCAP participants also received monetary incentivization through participation in grants and sustainability funding offered by DCC.