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: Generally, EEC reviews, processes, and schedules payments within 3 to 10 business days of receipt of any request for reimbursement. Once scheduled in the Commonwealth’s accounting system, payments are processed overnight and disbursed the next day. All payments by EEC are made by electronic fund transfer to contract providers and Child Care Resource and Referral agencies. Contract providers invoice EEC directly while voucher providers submit their billing to their assigned Child Care Resource and Referral agency. Child Care Resource and Referral agencies aggregate their billing and submit to EEC twice a month to ensure payment to voucher providers within 21 days of receiving an invoice (this was recently implemented in FY24). All Child Care Resource and Referral agencies are contractually obligated to offer electronic fund transfer to voucher providers, although voucher providers may still elect to be paid by check if preferred. EEC is requesting a waiver for prospective payments and will work to implement this change for providers 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: In Spring 2022, EEC surveyed providers as a requirement of the C3 grant application. Only 30% of providers charge private pay clients registration fees, either as a one-time fee or an annual fee. EEC has determined that registration fees are not generally accepted practice in the state and therefore will not pay for registration fees for children receiving financial assistance. Also, EEC does not allow providers to charge registration fees to families who are receiving financial assistance. 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: EEC's contracted providers and CCRRs follow payment practices as outlined within their contracts through contract conditions for contracted providers and voucher agreements for child care providers accepting child care financial assistance through the CCRRs. These agreements outline requirements for reimbursement, payments for absences and closures, billing and attendance deadlines, billing procedures, parent fee tables and reimbursement rate chart, recoupment, dispute resolution, transportation, compliance with CCDBG, and FFATA requirements. Child care providers working with CCRRs referred to as voucher providers receive the agreement requirements directly from the CCRRs. Center based contracted providers and Family Child Care System receive the agreement requirements directly from EEC and contracted Family Child Care System providers receive the agreement requirements directly from the FCC system. These agreements are updated and signed on an annual basis. Additionally, contracted providers and CCRRS receive the same requirements from EEC via contracts. All payments for both voucher providers and contracted providers are processed in our child care financial assistance system which is then used to process payment to providers based on the child care rate and child enrollment or agreed upon slots. 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: Both parents and providers are issued the two-week notice of termination of child care financial assistance if a family's eligibility changes during a 12-month authorization period. Providers are notified through EEC’s child care financial assistance management system when there are changes to any placements. Also, providers have access to view the end dates of all authorizations through EEC's child care financial assistance management system. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: All disputes are reviewed by the Accounts Payable Unit. If it cannot be resolved by the Specialist, it will be escalated to the head of the unit for resolution. Disputes are responded to within one business day and most disputes are resolved within three to five business days. f. Other. Describe any other payment practices established by the Lead Agency: NA 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? EEC's payment practices support equal access to a range of providers by providing stability of funding and encouraging more child care providers to serve children receiving CCDF subsidies. For instance, EEC's payment practices ensure payment is promptly made, covers longer periods of times, and has prompt resolution of conflicts. EEC pays providers that accept financial assistance based on the child’s enrollment, not based on attendance. Providers may close for three or fewer days for emergency related reasons without EEC approval and receive continued payment. EEC has a process to approve closures longer than 3 days. EEC also recently implemented three billing windows per month for voucher providers so that they have three opportunities to submit requests for payment.