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: [x] Sets the same payment rates for the entire State or Territory. [ ] 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). 2/1/2022 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)? The rates reported are based on the daily rates multiplied by 5. 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) 68.00 Per Day 100.00 340.00 90.00 37.00 40.00 46.00 Family Child Care for Infants (6 months) 61.00 Per Day 100.00 305.00 85.00 32.00 35.20 50.00 Center Care for Toddlers (18 months) 42.00 Per Day 100.00 210.00 75.00 35.00 37.00 42.00 Family Child Care for Toddlers (18 months) 42.00 Per Day 100.00 210.00 80.00 31.00 35.00 41.84 Center Care for Preschool ers (4 years) 31.50 Per Day 100.00 157.50 44.00 32.00 33.00 36.00 Family Child Care for Preschool ers (4 years) 29.00 Per Day 100.00 145.00 50.00 29.00 30.73 35.00 Center Care for School- Age (6 years) 31.50 Per Day 100.00 157.50 60.00 30.00 31.50 35.00 Family Child Care for School- Age (6 years) 29.00 Per Day 100.00 145.00 50.00 29.00 30.00 35.00 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) Family Child Care for Infants (6 months) Center Care for Toddlers (18 months) Family Child Care for Toddlers (18 months) Center Care for Preschool ers (4 years) Family Child Care for Preschool ers (4 years) Center Care for School- Age (6 years) Family Child Care for School- Age (6 years) 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? [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: The Lead Agency pays a differential rate for children requiring special needs care. According to BESE Bulletin 139, Special Needs Child Care is defined as the following: ￿for the purpose of CCAP daily rates, child care for a child through age 17 who has a current individualized family services plan (IFSP) or individual education plan (IEP) in accordance with the Individuals with Disabilities Education Act (IDEA) or who receives supplemental security income (SSI).￿ Incentive payments up to 26 percent higher than the regular rates can be allowed for special needs child care. 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. [x] Differential rate for higher quality, as defined by the Lead Agency. Describe: The CCDF Lead Agency offers quarterly CCAP bonus payments to child care sites based on their quality rating from their Performance Profile, as a way to incentivize increased quality. Bonus payments are calculated based on a percentage of CCAP payments from each quarter. Sites with a higher quality rating receive a bonus based on a greater percentage of their CCAP payments. Additionally, sites with higher quality ratings are able to qualify for increased provider School Readiness Tax Credits. The size of the credit is based on the site’s star rating and the number of children being served who are in the Child Care Assistance Program (CCAP) or are foster children in the custody of the Department of Children and Family Services (DCFS). The credit is NOT dependent on whether the site owes income taxes and is available for both for-profit and non-profit centers. 5 star rating = $1,500 tax credit for site per child 4 star rating = $1,250 tax credit for site per child 3 star rating = $1,000 tax credit for site per child 2 star rating = $750 tax credit for site per child 1 star rating = $0 tax credit for site per child Example: If ABC child care has earned three stars and serves 10 eligible children, then that provider is eligible for a refundable Provider SRTC of up to 10 children x $1,000 per child = $10,000. vi. [x] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: Rates are differentiated based on settings and age of children served as well. For example, rates vary for Type III Early Learning Centers, School Child Care Centers, Family Child Care Providers, In- Home Providers, and Military Child Care Centers. Moreover, there is a different base rate for infants and toddlers, for both regular care and special needs and a different base rate for 3 year olds, for both regular care and special needs. (See BESE Bulletin 139 Section 515 for rates.) 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 Lead Agency most recently established payment rates in February 2022, based off of the prior Market Rate Survey as well as data shared by providers in their ARPA Stabilization Grant applications. That data was analyzed to arrive at an estimated average cost per day for serving children at different age levels (infant, toddler, 3 year old, 4 year old, 5 year old). Proposed rates for three age groups (infants, toddlers and age 3+ children) were developed for publicly-funded centers and Family Child Care homes. The proposed rates reflected fairly large increases for infants, moderate increases for toddlers, and more modest increases for age 3+ children. In an effort to arrive at the most true cost of care, several methods of data analysis were used: provider weighting, taking input from providers about how costs are allocated across ages; provider weighting in regard to center size, looking for strong patterns; and regression analysis, drawing patterns from the data using a defined cost structure. The Lead Agency will use data from the 2023 Market Rate Survey to re-evaluate its current payment rates. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? By increasing the CCAP rates in February 2022 to at least the 75th percentile (based on the 2021 Louisiana Early Childhood Subsidy Cost Analysis), a family could choose 3 out of 4 child care providers, rather than only 1 out of 4 providers if paid at the 25th percentile. This reduced/reduces the gap that families need to pay between what the provider charges and what the state pays, therefore making child care more affordable to the most vulnerable families. The state pays the state rate regardless of the amount the provider charges. 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? The Lead Agency most recently established payment rates in February 2022 based off of the prior Market Rate Survey as well as data shared by providers in their ARPA Stabilization Grant applications regarding their monthly operating expenses. That data was analyzed to arrive at an estimated average cost per day for serving children at different age levels (infant, toddler, 3 year old, 4 year old, 5 year old). Proposed rates for three age groups (infants, toddlers and age 3+ children) were developed for publicly-funded centers and Family Child Care homes. The proposed rates reflected fairly large increases for infants, moderate increases for toddlers, and more modest increases for age 3+ children, to promote the stabilization of child care providers. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? Outside of the CCAP payment rates themselves, the Lead Agency accounts for the cost of higher quality by providing additional payment incentives and additional no-cost quality supports. The CCDF Lead Agency offers quarterly CCAP bonus payments to child care sites based on their quality rating from their Performance Profile as a way to incentivize increased quality. Bonus payments are calculated based on a percentage of CCAP payments from each quarter. Sites with a higher quality rating receive a bonus based on a greater percentage of their CCAP payments. Additionally, sites with higher quality ratings are able to qualify for increased School Readiness Tax Credits, both for family tax credits and for provider tax credits. In addition, the Lead Agency provides funding for CCR&R training, CLASS observations, child assessment, teacher scholarships, curriculum, etc. 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. (not applicable)