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)? [x] Yes. If yes, describe: Effective January 1, 2023, Maryland implemented advance payment as a strategy to increase the supply of and improve the quality of child care service across the seven (7) payment regions in Maryland. Advance Payment pays providers based on the number of children enrolled in the Child Care Scholarship (CCS) Program during the prior month. This payment strategy projects the amount owed to the provider for the month and divides it into two payments processed on the 1st and 15th of each month. Paying providers in advance provides greater financial resources to providers at the beginning and in the middle of the month versus paying providers in arrears for services already rendered. Maryland believes that the Advance Payment model combined with child care scholarship reimbursement rates at the 70th percentile across Maryland will increase equal access to higher child care options for children eligible for CCS services. In addition, the major rationale for implementing advance payment was to increase equal access to child care by creating a payment system that exceeded or closely mimicked private pay received by child care providers as possible. [ ] 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: 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? [x] Yes. If yes, identify the fees the Lead Agency pays for: Maryland pays a registration fee per enrollment with a provider in order to increase equal access to child care by reducing the initial costs associated with child care enrollment. The payment of a registration fee will only be paid once per year for the same child re-enrolling multiple times at the same child care facility. Maryland believes the practice of supporting the payment of the child’s registration fee increases Parental Choice options for families by reducing out-of-pocket expenses. Thus, the parental choice options are widen when families receive financial assistance with the cost of registration fees that could otherwise be a barrier when selecting specific care types or when having to pay registration fees for more than one child in care. Likewise, parents do not have to fear remaining at the same provider due to losing the registration fee or being unable to pay the registration fee at a subsequent provider. In addition, this practice supports child care providers in their effort to collect additional fees needed to support the provision of quality child care. [ ] 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: Maryland’s provider payment procedures include the following: (1) A Statement of Understanding that accompanies each scholarship that is a written payment agreement and authorization for services between the parent, child care provider and the Maryland State Department of Education that outlines the Child Care scholarship Programs. (2) Providers are provided with a Child Care Scholarship that outlines the reimbursement amount that Maryland pays and the assigned copayment agreement that is paid by the parent. The Scholarship provides the maximum amount which the Child Care Scholarship reimburses based upon the payment region in which the parent resides and requires the child care provider to enter the amount they charge for private paying customers with children of the same age and Unit of Care. The reimbursement rate on the Child Care Scholarship is based on the family's income, family size, and payment region in which the family resides, as well as whether the provider’s rate is lower than Maryland’s reimbursement rate. (3) The Co-Payment Agreement that is signed between the parent and the child care provider establishes the assigned co-payment amount and establishes that if the Child Care Scholarship reimbursement amount and the assigned co-payment do not cover the full amount of the Child Care Provider’s tuition, the parent is responsible for paying the difference owed. (4) Maryland Child Care Scholarship Regulations address payment procedures for any time a state of emergency, i.e., COVID-19, is declared. During state-declared emergencies, the Child Care Scholarship Program pays based on the last enrollment before the state emergency is declared. (5) Providers have an appeal dispute-resolution process in which they can submit an informal inquiry through the Provider Inquiry Link on the Maryland State Department of Education website or an informal appeal. Maryland’s formal appeal process is outlined in section 4.4.1e of Maryland’s State Plan. (6). Maryland pays based on enrollment instead of attendance and pays providers prospectively. 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: Maryland provides written notification to parents and the provider at least 5 calendar days before termination of child care services or the reduction of child care benefits. If the child care program is closed on the same day due to a provider being placed in a non- payable status, both the provider and the parent will receive notification on that day of the change, and the parent will be reissued child care scholarships to prevent a break in needed Child Care Scholarship (CCS) services. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: The Maryland State Department of Education (MSDE) contractor will respond within three business days of an informal or formal dispute. The applicable process depends on the nature of the dispute. To assist child care providers in navigating the various procedures, below is a summary of the types of disputes that may arise and the corresponding dispute resolution procedure: The Informal Resolution for Advance Payment Disputes: Child care providers use this process if a provider disagrees with the true-up calculation or advance payment, the provider may submit an inquiry through the Provider Inquiry Link on the MSDE website no later than 90 days from receipt of the payment at issue. -The Provider Inquiry Link submission must include a written explanation of the provider’s position. Child Care Scholarship (CCS) Central 2 will review the written submission. -The CCS Program will address a provider’s inquiry within 3 business days of receipt of the provider’s inquiry. The Informal Appeal for Repayment and Program Integrity Audit Disputes: Child care providers use this process if a provider disagrees with a repayment resulting from advance payment or the results of a Program Integrity Audit, the provider may submit an informal appeal with CCS Central 2 through the Provider Portal no later than 90 days from receipt of the notification. -The Provider Portal submission must include a written explanation of the provider’s position and attach any supporting documentation. If the provider would like the opportunity to attend a telephone conference, one must be requested in the Provider Portal submission. -The CCS Program will issue a final decision within 90 calendar days of the filing of the appeal. The Formal Appeal for Intentional Program Violation (IPV) Disputes - child care providers use this process If a provider is alleged to have committed an IPV under COMAR 13A.14.06.14, the case may be referred to the local State’s Attorney or to the Office of Administrative Hearings (OAH) for an administrative disqualification hearing. -Following an IPV finding, if a provider disagrees with the amount of overpayment or the method of repayment related to the IPV finding, the provider may submit a formal appeal with CCS Central 2 within 90 calendar days of the notification. -Within 5 business days, CCS Central 2 will transmit the appeal to OAH. The appeal will be processed in accordance with COMAR 13A.14.06.15. -Upon receipt of an IPV-related appeal, CCS Central 2 will promptly offer the provider a telephone conference. Although a conference may resolve the dispute, a hearing will be held unless the provider withdraws their appeal request in writing. -The Administrative Law Judge will issue a final decision on the appeal within 90 calendar days of the filing of the appeal. The parent’s resolution process may begin with a customer requesting a hearing if the contractor: (1) Denies, suspends, reduces, or terminates assistance; (2) Fails to act with reasonable promptness on an application for, or a request for adjustment of assistance; or (3) Imposes sanctions on a recipient; or (4) Recovers an overpayment or repayment in which the child care providers submits an inquiry. The customer or provider may appeal within 90 calendar days of the date of the notice of adverse action. An appeal request: (1) Is made by filing a completed Maryland State Department of Education appeal request form with the contractor; (2) May be received by any employee of the contractor whose assignment requires contact with the public; and (3) Shall be submitted immediately by the contractor to the designated hearing coordinator. The filing date of the appeal request is the date the contractor received the completed Maryland State Department of Education appeal request form. The contractor shall send written notice of any adverse action in writing: (1) To the customer; and (2) To a provider who is denied payment for committing an intentional program violation. Notice of any adverse action shall include the:(a) Decision; (b) Basis for the decision; (c) Specific regulation supporting the decision; (d) Right to request an appeal; (e) Method by which an appeal may be requested; (f) Right to be represented in an appeal by a lawyer, relative, friend, or other individual; and (g) Availability of any free legal services. The contractor shall assist the appellant in completing an appropriate appeal request form to ensure that it contains all the information required to process the request and, if necessary, shall provide an interpreter. Processing of appeal requests occurs within 5 business days of the filing date of an appeal request, the contractor shall: (1) Forward the following information to OAH: (a) Date of the request; (b) Name and address of the appellant; (c) Name and address of the local department representative; (d) Action being appealed; (d) Date of the action being appealed; and (e) Date notice of the action was mailed to the appellant; and (f) Acknowledge to the appellant receipt of the appeal request. (2)The Appeal Request may involve scheduling a conference: (a) When the contractor receives an appeal request, the contractor shall promptly offer the appellant a conference. (b) A contractor supervisor shall attend the conference. (c) The case manager responsible for the action may also attend. (d) Although a conference may lead to an informal resolution of the dispute, a hearing shall be held unless the appellant withdraws the appeal request in writing. Continuation of assistance pending appeal involves: (1) Assistance shall be automatically continued or reinstated if the filing date of the appeal request is within 10 calendar days of the intended action. (2) Assistance may not be continued or reinstated pending appeal if: (a) An appellant specifically requests that assistance not be continued or reinstated pending appeal; (b) The eligibility or certification period for the assistance has expired; (c) Assistance has been reduced or terminated due to a change in federal or State law or regulation and the appeal does not appear to concern misapplication of the change; (d) Continuation or reinstatement of the service at issue would threaten the health or safety of other individuals; or (e) The service is terminated because of nonpayment by the family of the copayment stated on the voucher that the contractor assigned. (3) An appeal request form shall contain: (a) An opportunity for the appellant to request assistance not be continued or reinstated pending appeal; and (b) A statement that the appellant is responsible for repaying any assistance paid during the appeal process if the contractor's position is upheld. Office of Administrative Hearings (OAH) may deny or dismiss an appeal if: (1) The appeal request is not complete; (2) The appellant withdraws the request in writing; (3) The appellant fails to appear at the scheduled hearing; (4) Assistance has been reduced or terminated due to a change in federal or State law or regulation and the appeal does not concern misapplication of the change; or (5) The appellant has failed to pay any filing fees required by OAH. OAH shall complete the following upon the receipt of an appeal: (1) Upon receiving an appeal request, OAH shall: (a) Promptly schedule a hearing; and (b) Send the parties a hearing notice at least 15 calendar days before the scheduled hearing. (2) Intentional Program Violation Hearing. When the contractor makes a referral to OAH concerning an intentional program violation, OAH shall: (a) Promptly schedule a hearing; and (b) Send the parties a hearing notice at least 30 calendar days before the scheduled hearing. (3) Hearing Notice. The hearing notice shall: (a) Summarize the hearing procedures; (b) Advise the appellant of: (i) The date, time, and place of the hearing; (ii) The right to be represented at the hearing by a lawyer, relative, friend, or other individual; (iii) The availability of any free legal services; (iv) The right to present documents and witnesses, including contractor employees, at the hearing; (v) The right to examine the case record in preparation for the hearing; (vi) The procedure to follow if the appellant cannot attend the hearing; and (vii) Except in an appeal concerning an intentional program violation, the authority of an administrative law judge to dismiss the appeal if the appellant fails, without good cause, to attend the hearing; and (c) In an appeal concerning an intentional program violation, include: (i) The charge; (ii) A warning that the decision shall be based solely on information provided at the hearing if the appellant fails to appear at the hearing; (iii) A statement that, to have a hearing rescheduled, the appellant has 10 calendar days from the date of the hearing to present to the administrative law judge good cause for not appearing and for not asking for a postponement before the hearing; (iv) A description of the disqualification penalties and a statement of the applicable penalty; (v) A statement of the appellant's rights during the hearing; and (vi) A warning that the hearing does not preclude the State or federal government from prosecuting the appellant or pursuing collection of the overpayment. Prehearing appeal procedures include the following: (1) Rescheduling: (a) A party may request a change in a hearing time, date, or location by: (i) Submitting a written request, with copies served on all parties, to the OAH clerk's office at least 5 business days before a scheduled hearing; or (ii) In the case of an unforeseen event requiring postponement and occurring less than 5 business days before a scheduled hearing, calling the OAH clerk's office as soon as possible. (b) If OAH finds that good cause exists, OAH shall set another time or place for the hearing and notify the parties of the change. (c) In an appeal concerning an intentional program violation, the appellant is entitled to one postponement of the scheduled hearing of up to 30 calendar days without the need to demonstrate good cause. (d) Any time limits applicable to the issuance of a final administrative decision are extended by the length of the delay caused by a postponement: (i) Requested by the appellant, or (ii) Granted by the administrative law judge due to the appellant's introduction of new evidence. (2) Summaries. The contractor shall (a) Prepare a summary of the facts pertinent to the case and of the basis for its action and (b) Send the summary and copies of all documents that it intends to present at the hearing to the appellant and to OAH at least 6 calendar days before the date of the hearing. The Administrative Law Judge's involvement is as follows: (1) The administrative law judge shall render a final decision. (2) The decision shall contain: (a) Separate statements of findings of fact and conclusions of law; (b) Citation to pertinent State and federal law; and (c) An order. The Final Decision will be as follows: (1) Within 90 calendar days of the filing of the appeal request: (a) The administrative law judge shall issue a final decision to all parties; and (b) The contractor shall complete all administrative or corrective action necessary to implement the decision. (2) If the decision is favorable to the contractor, the contractor may: (a) Take immediate steps to implement the decision; and (b) Reduce or terminate assistance that has been continued while the appeal was pending by: (i) Decreasing the subsidy amount or closing the customer’s case; and (ii) Notifying the child care provider of the reduction or termination pursuant to Regulation .10A. (3) If the decision is favorable to the appellant, the contractor shall, within 10 calendar days of the date of the decision: (a) Comply with the decision; (b) Take corrective action retroactive to the date the incorrect action was taken; (c) Restore the services, and (d) Notify OAH that it has completed all required actions. (4) The Record. After issuing a final administrative decision, OAH shall promptly forward to the CCS Branch the complete record, including all: (a) Papers filed; (b) Evidence submitted; and (c) Orders and decisions issued. f. Other. Describe any other payment practices established by the Lead Agency: 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? Paying child care providers in advance provides greater financial resources to child care centers, large family child care homes, family child care homes and informal child care providers at the beginning and in the middle of the month versus paying providers in arrears for services already rendered. Due to prospectively paying providers, the number of child care centers and registered child care programs participating in the Child Care CCS Program has increased. Thus, more parents have greater access to a full range of child care types and parental care options. Maryland believes that the Advance Payment model combined with child care scholarship reimbursement rates at the 70th percentile across Maryland has increased equal access to higher child care options for children eligible for Child Care Scholarship (CCS) services. Paying based upon Payment regions ensures that the reimbursement rate addresses the private pay rates charged within the counties that make up the payment regions.