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: Currently, the Lead Agency pays providers the month after child care services are delivered. The Lead Agency ensures providers have a current written agreement (i.e., contract) and a valid authorization for child care assistance, prior to receiving funds. Once a provider submits a complete request for payment (e.g., attendance record), the request is processed within three business days and payment is generated to the provider’s banking institution on file within 7-10 business days. The Lead Agency has not conducted prospective payments to date; therefore, the Lead Agency will need to establish policies and procedures for implementing prospective payments in the future. To establish a definition of prospective payments, the Lead Agency will form a stakeholder group, including child care providers, advocacy organizations, and financial/budget staff, to discuss and provide a recommendation for prospective payments. The Lead Agency will also need to determine whether additional funds are needed to pay prospectively, and plan accordingly. The Lead Agency will submit a waiver request for additional time to implement paying providers prospectively. 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: Currently, the Lead Agency pays providers based on a child's attendance in their child care program. The Lead Agency ensures providers have a current written agreement (i.e., contract) and a valid authorization for child care assistance, prior to receiving funds. The provider submits attendance for the child at the beginning of each month, for the prior service month. Once a provider submits the attendance record, the request is processed within three business days and payment is generated to the provider’s banking institution on file within 7-10 business days. The Lead Agency previously conducted pay on authorized enrollment procedures as part of the child care Coronavirus Response and Relief Supplemental Act (CRRSA) grant funds and is able to estimate the cost associated with paying on authorized enrollment instead of attendance. However, considering the current state appropriation, there are insufficient funds in state fiscal year 2025 to implement pay on authorized enrollment. The Lead Agency will submit a waiver request for additional time to implement paying providers by authorized enrollment. [ ] 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: The Lead Agency does not currently pay for registration fees. The Lead Agency has not completed the analysis of the 2024 MRS data at this time; however, preliminary data from the survey shows less than half of the respondents indicated they charge registration/enrollment fees; therefore, it is not considered a generally accepted payment practice. The Lead Agency received a Preliminary Notice of Possible Non-Compliance for this item on February 14, 2024. As the Lead Agency has never paid registration fees, it will need additional time to determine the additional funds needed and to establish policies and procedures for paying registration fees in the future. 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 in Missouri must enter into a contract with the Lead Agency in order to receive payment for subsidy-eligible children who receive child care in their facility. The terms and conditions of the contract include a section on payment and invoicing, which specifies all requirements of contracted providers in order to receive payment. The authorization for child care assistance is based on the family’s need for care and the age of the eligible child. Payments are made in accordance with the provider type and the rates for the county in which the program is located. When the parent selects the child care program the child will attend, the provider is notified that the child is eligible to receive child care subsidy, the number of days the child is authorized for, and the sliding fee amount the family is responsible to pay. 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: The Lead Agency immediately notifies the child care provider of changes to the family’s eligibility that could impact payments to the provider. This notification occurs in two ways: via an email to the provider and a notification to the provider’s portal in the child care data system (CCDS). In addition, the provider can view the child’s eligibility at any time in the CCDS portal. The eligibility and authorization information allows the provider to view whether the child is eligible for daytime and/or evening and weekend units, and family’s sliding fee. In addition, the provider’s CCDS portal indicates the child’s eligibility start and end dates that align with the authorization start and end dates. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Child care providers must report payment discrepancies within 60 days of the service month and submit a Child Care Provider Payment Resolution Request (PRR) Form to the Lead Agency to request payment. Payment resolution requests are generally reviewed by the Lead Agency within 30 calendar days of receipt, and payment is made within 7 to 10 business days from the receipt and review of a complete request. If a provider disagrees with a payment, or denial of payment, the provider can appeal the decision through an administrative review of the information by the Lead Agency. The Program Integrity Unit conducts the administrative review and determines an outcome based on information from the provider and Lead Agency. The provider will be notified of the decision within 15 days of the review. f. Other. Describe any other payment practices established by the Lead Agency: N/A 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 Lead Agency uses the results from the MRS to establish a base rate that ranges based on five facility types: Six or Fewer, Registered, Licensed Family Home, Licensed Group Home, and Licensed Center. Regardless of the base rate and facility type, the Lead Agency offers multiple rate differentials, including providers who serve more than half of the children in their enrollment that are subsidy-eligible, providers who are accredited or working towards accreditation, providers serving children with special needs, providers serving children meeting the definition of protective services, and/or providers caring for children during non-traditional hours. These rates incentivize providers to increase the quality of care in their program and enroll subsidy-eligible children.