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: Providers receive payment between the 15th and the 20th of the month following service provision via direct deposit. The Lead Agency recognizes that this is not compliant with current CCDF requirements and needs additional time to make functionality changes in NC FAST to fully implement prospective payments. 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. [ ] 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: [x] 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: Payment for subsidized child care services is typically based on enrollment but in some instances may be based on attendance. Payment based on attendance occurs when a child is absent for more than ten (10) days during a service month, when the provider charges only on the basis of attendance, and when the provider has an unpaid closure day. Providers record daily attendance in the NC FAST Provider Portal. This payment methodology encourages families to consistently use the authorized child care services and also reduces the risk of fraudulent behavior. The Lead Agency recognizes that this is not compliant with current CCDF requirements and needs additional time to change the policy and make functionality changes in NC FAST to fully implement provider payments based on enrollment. The Lead Agency recognizes that this is not compliant with current CCDF requirements and needs additional time to change the policy and make functionality changes in NC FAST to fully implement provider payments based on enrollment. 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 North Carolina Division of Child Development and Early Education is in the process of developing policy and making changes to the program’s online case management system (NC FAST) to allow for mandatory registration fees to be paid to child care facilities who participate in the program. 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: The Child Care Provider Agreement must be signed by all child care providers to be enrolled in the Subsidized Child Care Program. This Child Care Provider Agreement is required initially and annually, thereafter, when child care services are approved to be provided in a child care arrangement and the payment for care is made to the provider by the State. The Child Care Provider Agreement informs the provider of the requirements for participation in the Subsidized Child Care Assistance (SCCA) program and the policies for payment and dispute-resolution process. After a provider signs the Child Care Provider Agreement and is selected for services by a recipient, a child care voucher is created and is signed by the responsible adult and child care provider. The voucher authorizes child care services for the child and includes recipient contact information, provider contact information, payment policies, rates, level of care/schedule, monthly and daily parent fee. 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: Child Care Action Notices are generated electronically in NC FAST and available online in the NC FAST Provider Portal whenever there are changes to a family's eligibility status that could impact payments. The child care worker has 10 business days to process changes that impact a family's eligibility status and that potentially impact payments. The Child Care Action Notice is sent to providers and families immediately after the change is processed. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Providers have 30 days to appeal inaccurate payments. To begin the process, a provider would request a review of the inaccurate payment in writing to the local department of social services or local purchasing agency. The agency then has 10 business days to complete the review and make a determination. If the provider does not agree with the determination, the provider may request a local appeal hearing by the local department of social services or local purchasing agency. f. Other. Describe any other payment practices established by the Lead Agency: NA 4.4.3 Payment practices and parent choice How do the Lead Agency’s payment practices facilitate provider participation in all categories of care? Providers receive monthly payment via direct deposit between the 15th - 20th of the month following service provision. Payment is based on enrollment and a child can be absent for up to 10 days during a service month with full payment still being made to the provider. If a child Is absent for more than 10 days, payment is based on the number of days that services were provided. When there are changes to a family's case that impact a provider's payment, providers are notified in writing of the change. Providers have the right to appeal an incorrect payment and have 60 days from when the incorrect payment was made to file an appeal. All providers enrolled in the program must sign a provider agreement annually which outlines the payment practices listed above and outlines the expectations of both the Lead Agency and the provider. These consistent payment practices help to limit barriers to providers participating in the program.