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). 7/6/2024 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)? The Lead Agency does publish weekly rates. 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) 330.00 Per Week 75.00 330.00 50.00 330.00 346.00 384.00 Family Child Care for Infants (6 months) 245.00 Per Week 75.00 245.00 65.00 225.00 227.50 250.00 Center Care for Toddlers (18 months) 320.00 Per Week 75.00 320.00 50.00 320.00 335.00 350.00 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 Toddlers (18 months) 230.77 Per Week 75.00 230.77 65.00 220.00 225.00 250.00 Center Care for Preschool ers (4 years) 300.00 Per Week 75.00 300.00 50.00 300.00 301.00 321.92 Family Child Care for Preschool ers (4 years) 225.00 Per Week 75.00 225.00 65.00 205.00 220.00 230.77 Center Care for School- Age (6 years) 214.00 Per Week 75.00 214.00 50.00 214.00 250.00 301.00 Family Child Care for School- Age (6 years) 175.00 Per Week 75.00 175.00 65.00 150.00 170.00 195.00 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) 330.00 Per Week 75.00 330.00 50.00 330.00 346.00 384.00 Family Child Care for Infants (6 months) 245.00 Per Week 75.00 245.00 65.00 225.00 227.50 270.00 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 Toddlers (18 months) 320.00 Per Week 75.00 320.00 50.00 320.00 335.00 350.00 Family Child Care for Toddlers (18 months) 230.77 Per Week 75.00 230.77 65.00 220.00 225.00 250.00 Center Care for Preschool ers (4 years) 300.00 Per Week 75.00 300.00 50.00 300.00 301.00 321.92 Family Child Care for Preschool ers (4 years) 225.00 Per Week 75.00 225.00 65.00 205.00 220.00 230.77 Center Care for School- Age (6 years) 214.00 Per Week 75.00 214.00 50.00 214.00 250.00 301.00 Family Child Care for School- Age (6 years) 175.00 Per Week 75.00 175.00 65.00 150.00 170.00 195.00 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: The Lead Agency adds a $100 stipend for any licensed CCAP provider caring for an infant for 20 hours or more per week. [ ] 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. [x] Differential rate for non-traditional hours. Describe: The Lead Agency reimburses for Non-traditional hours receive 35% additional reimbursement for 6PM-6AM and weekends. ii. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: Providers caring for a child receiving CCAP with a documented special need receive 35% increase in reimbursement. iii. [x] 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: The Lead Agency reimburses for infant/toddler care receive 10% increase in reimbursement. 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: Maine provides a percentage increase in payments on behalf of families utilizing the Child Care Subsidy Program for providers who are at various stars on the Quality Rating and Improvement System. The higher quality the program is, the more incentive or quality bump funds they receive. Providers at a star 3 receive 2% quality bump in payment. Providers at a star 4 receive a 5% quality bump and providers at the highest level, star 5, receive 10% quality bump. 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? [x] Yes. If yes, describe: The Department currently pays the state rate or the provider’s private pay payment rate, whichever is lower. The Department is working to complete the child care management system that will support the implementation of the new Federal Rule, including payments at the established state rate. [ ] 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 set the rates based on the 2024 MRS and the cost analysis combined to provide an overall increase to rates, with differential percentiles, at a minimum of the 50th percentile and a maximum of the 75th percentile, working towards reimbursement closer to the true cost of care. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? The Lead Agency utilized the cost analysis data completed by CELFE in conjunction with the 2024 MRS that considered factors to meet CCDF and licensing requirements. If Maine had set the reimbursement rate at the 75th percentile of the market rate in Cumberland County, the typical center in Cumberland County￿if serving all subsidized children and operating at 85% of full enrollment￿would have total revenue at 32% higher than what the cost study estimates is the total cost of operating the center. At the same time, setting the reimbursement rate at the 75th percentile of Aroostook County would result in revenue 23% lower than the cost of care. Maine is working toward a more equitable financing strategy, and that led to our 2024 rates giving more significant rate increases to more rural and/or lower-income counties and substantially smaller rate increases to Cumberland and nearby counties. 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 utilized the cost analysis data completed by CELFE in conjunction with the 2024 MRS that considered costs of care for both family child care and facilities. To move toward a more equitable rate setting strategy that would decrease the gap between price and cost of care, Maine set differentiated reimbursement rates. The cost study showed the biggest gaps between price and cost of care in the more rural counties and/or those with lower median household incomes. Maine set rates to provide higher increases in those areas and moved from 10 rate regions to 2 rate regions. The state set the 2024 reimbursement rates for child care centers at the 50th percentile in Cumberland, York, and Sagadahoc counties and the 70th percentile for centers in all other counties. The state set the 2024 reimbursement rates for family child care at the 65th percentile in Cumberland, York, and Sagadahoc counties and the 75th percentile for all other counties. This rate structure provided a significant increase for the vast majority of age groups, types of providers, and regions of the state. There were a handful of rates, mainly some rates for preschool and school age children, and mostly in the Cumberland region, where the 2024 rate stayed the same as the 2021 rate. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? The Lead Agency utilized the cost analysis data completed by CELFE in conjunction with the 2024 MRS that considered costs at higher rates of care for both FCC and Facilities Providers at a star 3 receive 2% quality bump in payment. Providers at a star 4 receive a 5% quality bump and providers at the highest level, star 5, receive 10% quality bump, providing a tiered rate system for higher levels of quality. 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’s cost analysis efforts with CELFE recommended the grouping of counties utilized for the market rates as the results indicated there was significant similarities in cost statewide versus several regions.