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: The Lead Agency acknowledges the 2024 CCDF rules requires prospective payment for direct services for children participating in CCDF. The Lead Agency has requested a waiver request to meet this requirement and will be seeking technical assistance on maximize the efficient use to meet the needs of the early childhood system. Currently, the Lead Agency pays within 21 calendar days of the receipt of a complete invoice for services. Once a child care provider submits an invoice, the invoice is processed within three business days. Payments are made twice per week. After a payment, providers receive a Statement of Payment (SOP) and families receive an Explanation of Benefits (EOB) explaining what was paid for a child’s care. The Lead Agency will implement a new database in 2025 and plans to incorporate prospective payment functionality. Additionally, the Lead Agency must adopt new policies to change payment methodology, and this will require public comment through the Montana Administrative Procedures Act (MAPA). 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: The Lead Agency does not pay prospectively. The Lead Agency will implement a new database in 2025 with plans to incorporate prospective payment functionality. The Lead Agency will enact new policies to change payment methodology. Currently, the Lead Agency reimburses for the full payment amount if the child attends at least one day in a month. A parent or referring agency determines a child’s need for care up to 50 hours per week. Authorized child care can meet the child’s need and does not directly follow the parent’s schedule. [ ] 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: A registration fee is paid for registering a child in a registered family, registered group, or licensed child care center, if the fee is charged to all who enroll in the facility. The payment will not exceed $30. [ ] 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: When an authorization of services is created, an Authorization Plan is generated by the database. The authorization plan is a notification sent to the parent and child care provider. It includes the following information: (1) number of children authorized to receive child care assistance; (2) number of hours authorized per week; (3) number of months authorized; (4) name of the child care provider; (5) and amount of monthly copayment the parent must pay the provider. Additionally, the Authorization Plan contains provider payment policies and provider rates. The Lead Agency does not charge any fees charged to the providers, so this is not included in the Authorization Plan. Contact information for the scholarship services contractor staff is listed on the Authorization Plan to aid in the dispute resolution process. 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: If a parent reports a change to a Lead Agency scholarship contractor agency or the agency becomes aware of a change, the scholarship contractor determines if the change will impact the family’s eligibility status. Upon the parent reporting the change, the scholarship contractor will update the case file in the database generating an automatic notification from the database. The notification is issued the same day the change is recorded. If the reported change will be an adverse action, a 15-calendar day notice is given to both the parent and the child care provider. An adverse action may include a change in the family’s eligibility status. Finally, a case closure notice is sent to the parent and child care provider the day a case is closed. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: A weekly error log is created by the Lead Agency database for payments that should have been made but were unable to go to the intended party for the Best Beginnings Child Care Scholarship. The weekly error log includes a payment amount, a unique identifier, and the type of payment issue such as missing W-9 form. Error logs are emailed to the Lead Agency twice per week. The Lead Agency reviews payments rejected by the database upon receipt of the error log. A child care provider can contact a scholarship services contractor staff to inquire about a payment inaccuracy or dispute. The scholarship services contractor staff will contact the Lead Agency if the inquiry requires assistance to resolve. 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? Payment practices support equal access to a range of Lead Agency regulated and monitored providers. A family or referring agency determines a child’s need for authorized child care, up to 50 hours/week. Authorized child care can meet the child’s need and does not have to directly follow the parent’s schedule. The monthly authorized amount is paid if a child is authorized for the entire month and attends at least one day establishing continuity of care for providers and families and financial stability for provider. Providers are reimbursed on a half-time day (part- time) or full-time day (full-time) basis. Registration fees are paid to providers who collect this fee. This fee must be charged to all families regardless of how they pay for childcare.