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: Agencies administering child care assistance must make payment no later than 21 days after receipt of a complete bill from a child care provider. Local agencies receive and process submitted bills for payment using either paper vouchers or the online billing system and must determine their internal procedures to ensure bills are paid no later than 21 days after a complete bill is received. Lead Agency payment policy is shared with local agencies in Chapter 9.3 (Payments to Providers) of the CCAP Manual. Link: https://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&Revi sionSelectionMethod=LatestReleased&dDocName=ccap_0903 Yes, MN will submit a waiver. b. Does the Lead Agency pay based on authorized enrollment for all provider types? [ ] 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. [x] 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: Child care assistance pays for a child's scheduled and authorized hours of attendance, not actual hours attended. If a child attends for any part of their authorized schedule, care is fully paid for that day with no restrictions. When a child is absent an entire day they were scheduled and authorized to be in care, care can be paid up to 25 absent days per calendar year. More absent days can be paid due to medical conditions or illness of a parent or sibling living with the child care assistance (CCAP) family if documentation is submitted to the local agency. Minnesota does not currently pay legal nonlicensed providers for absent days but plans to propose legislation in the 2025 session that would pay legal nonlicensed providers for absent days. Date of preliminary notice issued by OCC: 4/2/2024 MN affirms that Lead Agency needs additional time to meet requirement. Description of current policy and the way it is out of compliance: Minnesota does not pay legal nonlicensed providers for days when the child is absent from care. Minnesota is not in compliance with requirements that delink provider payments from occasional child absences for legal nonlicensed providers. [ ] 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: Program pays up to two registration fees, per child, annually. [ ] 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: Providers are mailed a written service authorization for each family receiving child care assistance when child care assistance is initially authorized and anytime changes to the care authorized occur. Service authorizations include the following information for each child covered under the authorization: child name, child ID, start and end dates of care authorized, number of hours of care authorized, number of absence days used, age group, and rate type. Service authorizations include county-specific maximums rate that can be paid for each age group and rate type. Service authorizations include family copayment amount, family case number, and case name. They also include schedule information, billing information, and absent day information. Workers can include a comment on the service authorization to provide additional information to the provider. Providers can contact the family's worker if they want to dispute their payments. If the provider has further concerns, they can consult the CCAP Provider Guide or contact the department’s Child Care Assistance Program (CCAP) policy specialists for assistance resolving disputes with local agencies. Additionally, providers may request a fair hearing for adverse actions taken against them, including if an agency issues a payment amount the provider disagrees with. Providers receive notice and information on their registration and renewal forms about their right to appeal if CCAP issues them a payment, and they disagree with the amount. 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: Providers receive a notice that takes effect in 15 days of any changes to a family's eligibility that may negatively impact payment. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Providers may request a fair hearing for adverse actions taken against them, including if an agency issues a payment amount the provider disagrees with. Providers must submit a written appeal request to the department within 30 days after the agency mails notice of the action (e.g. payment). Typically, appeals are decided within 90 days of the date a provider requests a hearing. f. Other. Describe any other payment practices established by the Lead Agency: CCAP will pay a provider's charge for up to 10 federal or state holidays per year if the provider is closed and not providing care, charges all families for these days and the holiday falls on a day when the child is authorized and scheduled to attend. The 11 recognized state and federal holidays are New Year's Day, Martin Luther King Jr. Day, Presidents Day, Memorial Day, Juneteenth, Independence Day, Labor Day, Christopher Columbus Day (or the day after Thanksgiving at the provider option), Veterans Day, Thanksgiving, Christmas Day. Providers can substitute other cultural or religious holidays for the 11 recognized holidays when they notify the county or tribe of the substitution before the holiday or within ten business days after the holiday. 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? The payment practices identified in 4.4.1 are typical payment practices in the child care market. Providers are encouraged to provide care to subsidy families because: By paying within 21 days, timely payments are made to providers; By paying based on a child's scheduled and authorized hours rather than actual attendance, within the limits of the absent day policy, consistent payments are made to providers; By paying fully for days that a child attends for any percent of the day, more consistent payments are made to providers; By paying a provider's charge for up to 10 federal or state holidays (or other cultural or religious holidays identified by the provider) per year, more consistent payments are made to providers; By paying for up to two registration fees, per child, annually, families are better able to access a range of providers; By issuing timely notices and allowing for provider appeals and payment resolution processes, providers are kept informed of and involved; By limiting local payment practices, providers have more consistent payment experiences across the state. Children receiving subsidy are able to access a range of providers. The full range of providers are participating in the CCDF system. As of December 2024, 30% of family child care providers and 71% of center-based providers are registered with CCAP. Additional information about providers participating in the Child Care Assistance Program can be found in our (https://edocs.dhs.state.mn.us/lfserver/Public/DHS-7819H-ENG) Provider Profile.