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: Generally, providers will receive a payment within 5 days of billing for services. Providers typically bill on the 15th and last day of the month for services provided during that month. Some providers elect to bill monthly. The Lead Agency currently lacks data indicating that paying prospectively is not a generally accepted practice for payment. The Lead Agency will request a waiver to obtain technical assistance on how to implement this requirement. 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: The Lead Agency currently pays based on the child’s attendance for all child care providers. Child care providers are allowed to bill up to 5 absent days per month per child. The Lead Agency will request a waiver from the Administration of Children and Families as they work to delink provider payments from occasional absences. The Lead Agency will request a waiver to obtain technical assistance on how to implement this requirement. 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: The Lead Agency pays a set amount toward initial and annual enrollment fees and activity fees to licensed family child care providers and child care centers. Activity fees are payable only for the summer months (June, July, and August). The child care provider must show that they show that they also charge their private paying families these fees. [ ] 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: During the initial enrollment, child care providers sign an agreement with the Lead Agency that covers all provider policies, including the rate(s) they currently charge private paying families and rates they will receive from subsidy, billing allowance and methods, payments methods, and general standards required to enroll as a subsidy provider. Providers can contact their Resource Developer (RD) if they have any questions or concerns regarding the payment they received. The RD will work with their supervisor and policy team for further review, if needed. Providers can request a formal hearing to appeal any established over- or underpayments. 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: Notices of any changes to the child care authorization are mailed the same day to both the client and provider. Providers also receive electronic updated authorizations overnight, via the online portal system, any time there is a change in the authorization. Upon request, the notices can be faxed or emailed to the provider, as well. Providers also receive discontinuation of services if the case is closed and authorizations end. Online billing is required; however, exceptions are reviewed and granted for providers who do not have computer or internet access, which in that case, communication regarding authorizations is sent via mail. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Payments to providers are generated based on what the provider submitted for billing. Payments should never exceed the authorized amount. If the Lead Agency identifies an overpayment, a letter is sent to the provider informing them that there is an overpayment, allowing the provider to discuss the overpayment with a representative and informing them of their right to appeal the existence or amount of the overpayment. The provider has 30 days to appeal the overpayment. If, during the hearing, an appeal is not requested and the provider is found to have been overpaid, the provider is given options on how the overpayment can be recouped. If a provider believes they have been underpaid, they can contact their Resource Developer (RD). These situations are reviewed with the supervisor and policy team. 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? Providers can bill partial days, full days, and partial and full days. Generally, providers will receive a payment within 5 days of billing for services. Providers typically bill on the 15th and last day of the month for services provided during that month. Some providers elect to bill monthly. Billing is submitted through an electronic portal.