4.3 Adequate Payment Rates

The Lead Agency must set CCDF subsidy payment rates in accordance with the results of the current MRS or ACF pre-approved alternative methodology and at a level to ensure equal access for eligible families to child care services comparable with those provided to families not receiving CCDF assistance. Lead Agencies are also required to provide a summary of data and facts to demonstrate how payment rates ensure equal access, which means the Lead Agency must also consider the costs of base level care and higher quality care as part of its rate setting. Finally, the Lead Agency must re-evaluate its payment rates at least every 3 years. The ages and types of care listed in the base payment rate tables are meant to provide a snapshot of the categories of rates and are not intended to be comprehensive of all categories that might exist or to reflect the terms used by the Lead Agency for particular ages. If rates are not statewide, please provide all variations of payment rates when reporting base payment rates below. Base rates are the lowest, foundational rates before any differentials are added (e.g., for higher quality or other purposes) and must be sufficient to ensure that minimum health, safety, quality, and staffing requirements are covered. These are the rates that will be used to determine compliance with equal access requirements. 4.3.1 Payment rates a. Are the payment rates that the Lead Agency is reporting in 4.3.2 set statewide by the Lead Agency? [x] Yes. i. If yes, check if the Lead Agency: [x] Sets the same payment rates for the entire State or Territory. [ ] Sets different payment rates for different regions in the State or Territory. [ ] No. ii. If no, identify how many jurisdictions set their own payment rates: b. Provide the date the current payment rates became effective (i.e., date of last payment rate update based on most recent MRS or ACF pre-approved alternative methodology as reported in 4.2.1). 8/26/2024 c. If the Lead Agency does not publish weekly rates, then how were the rates reported in 4.3.2 or 4.3.3 calculated (e.g., were daily rates multiplied by 5 or monthly rates divided by 4.3)? NH publishes weekly rates. 4.3.2 Base payment rates a. Provide the base payment rates in the tables below. If the Lead Agency completed a market rate survey (MRS), provide the percentiles based on the most recent MRS for the identified categories. If the Lead Agency sets different payment rates for different regions in the State or Territory (and checked 4.3.1aii), provide the rates for the most populous region as well as the region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. The preamble to the 2016 final rule states that a benchmark for adequate payment rates is the 75th percentile of the most recent MRS. The 75th percentile benchmark applies to the base rates. The 75th percentile is the number separating the lowest 75 percent of rates from the highest 25 percent. Setting rates at the 75th percentile, while not a requirement, would ensure that eligible families can afford three out of four child care providers. In addition to reporting the 75th percentile in the tables below, the Lead Agency must also report the 50th percentile and 60th percentile for each identified category. If the Lead Agency conducted an ACF pre-approved alternative methodology, provide the estimated cost of care for the identified categories, as well as the percentage of the cost of care covered by the established payment rate. If the Lead Agency indicated it sets different payment rates for different regions in the State or Territory in 4.3.1.a, provide the estimated cost of care and the percentage of the cost of care covered by the established payment rate for the most populous region as well as the region with rates established at the lowest percent of the cost of care. For each identified category below, provide the percentage of providers who are receiving the base rate without any add-ons or differential payments. Provide the full-time weekly base payment rates in the table below. If weekly payment rates are not published, then the Lead Agency will need to calculate its equivalent. i. Table 1: Complete if rates are set statewide. If rates are not set statewide, provide rates for most populous region. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 344.42 Per Week 100.00 344.42 75.00 300.00 317.77 344.42 Family Child Care for Infants (6 months) 250.00 Per Week 100.00 250.00 75.00 220.00 232.00 250.00 Center Care for Toddlers (18 months) 317.36 Per Week 100.00 317.36 75.00 280.50 295.24 317.26 Family Child Care for Toddlers (18 months) 250.00 Per Week 100.00 250.00 75.00 202.50 221.50 250.00 Center Care for Preschool ers (4 years) 280.00 Per Week 100.00 280.00 75.00 250.00 262.00 280.00 Family Child Care for Preschool ers (4 years) 250.00 Per Week 100.00 250.00 75.00 200.00 220.00 250.00 Center Care for School- Age (6 years) 236.25 Per Week 100.00 236.25 75.00 190.00 208.50 236.25 Family Child Care for School- Age (6 years) 200.00 Per Week 100.00 200.00 75.00 185.00 191.00 200.00 ii. Table 2: Do not complete if rates are set statewide. If rates are not set statewide, provide rates for region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) Family Child Care for Infants (6 months) Center Care for Toddlers (18 months) Family Child Care for Toddlers (18 months) Center Care for Preschool ers (4 years) Family Child Care for Preschool ers (4 years) Center Care for School- Age (6 years) Family Child Care for School- Age (6 years) b. Does the Lead Agency certify that the percentiles reported in the table above are calculated based on their most recent MRS or ACF pre-approved Alternative Methodology? [x] Yes. [ ] No. If no, what is the year of the MRS or ACF pre-approved alternative methodology that the Lead Agency used? What was the reason for not using the most recent MRS or ACF pre-approved alternative methodology? Describe: 4.3.3 Tiered rates, differential rates, and add-ons Lead Agencies may establish tiered rates, differential rates, or add-ons on top of their base rates as a way to increase payment rates for targeted needs (e.g., a higher rate for serving children with special needs). a. Does the Lead Agency provide any rate add-ons above the base rate? [x] Yes. If yes, describe the add-ons, including what they are, who is eligible to receive the add-ons, and how often are they paid: Children who have experienced a significant disability receive additional weekly payments on top of their weekly enrolled payment based on the child’s service level. Full time: $100.00, Half time: $75.00, Part time: $50.00 [ ] No. b. Has the Lead Agency chosen to implement tiered reimbursement or differential rates? [x] Yes. [ ] No. Tiered or differential rates are not implemented. If yes, identify below any tiered or differential rates, and, at a minimum, indicate the process and basis used for determining the tiered rates, including if the rates were based on the MRS or an ACF pre-approved alternative methodology. Check and describe all that apply: i. [ ] Differential rate for non-traditional hours. Describe: ii. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: Children who have experienced a significant disability receive additional weekly payments on top of their weekly enrolled payment based on the child’s service level. Full time: $100.00, Half time: $75.00, Part time: $50.00 iii. [ ] Differential rate for infants and toddlers. Note: Do not check if the Lead Agency has a different base rate for infants/toddlers with no separate bonus or add-on. Describe: iv. [ ] Differential rate for school-age programs. Note: Do not check if the Lead Agency has a different base rate for school-age children with no separate bonus or add-on. Describe: v. [x] Differential rate for higher quality, as defined by the Lead Agency. Describe: NH Child Care Scholarship programs receive a monthly differential rate for children who are qualified under the Licensed Plus program or under Granite Steps for Quality (GSQ) New Hampshire’s Quality Rating and Improvement System. According to their quality rating star or step, programs can receive 5% or 10% for each child eligible under the scholarship program. They receive this on the 1st of the month for the previous month. In addition, programs awarded a step in GSQ are also eligible to receive quarterly quality incentive funds, the amounts of which are determined based on licensed capacity and step awarded with higher rated programs earning more quality incentive funds. vi. [x] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: Head Start, Early Head Start, and programs accredited by the National Association for the Education of Young Children receive our highest level of quarterly quality incentive rates. vii. If applicable, describe any additional add-on rates that you have besides those identified above. Does the Lead Agency reduce provider payments if the price the provider charges to private-pay families not participating in CCDF is below the Lead Agency’s established payment rate? [x] Yes. If yes, describe: The payment is reduced by whichever is less: the maximum weekly rate or the provider's regular rate. [ ] No. 4.3.4 Establishing payment rates Describe how the Lead Agency established payment rates: a. What was the Lead Agency’s methodology or process for setting the rates or how did the Lead Agency use their data to set rates? In 2024, the State of NH contracted a third-party research & consulting firm to compile and analyze the current MRS data. The rates provided were calculated by the contractor from the data provided in the MRS. Rates are referenced in law in RSA 161:2 XVII. This law requires rates to be reviewed annually. In June 2023, NH House bill HB2 passed which increased weekly standard rates to the 75th percentile of the MRS from the previous rates of the 60th percentile for infants/toddlers and 55th percentile for all other age groups. In rules, He-C 6910.17 (b) states that the standard weekly rates shall be established by the most recent MRS for licensed child care centers and licensed family child care homes at the 75th percentile. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? The State of NH made sure that child care programs were in good standing with the NH Child Care Licensing Unit. This would include compliance with meeting licensing and regulatory requirements, health and safety standards, training and professional development standards, and appropriate child to staff ratio, group size limits, and caregiver qualification requirements. c. How did the Lead Agency use the cost of care, either from the narrow cost analysis or the ACF pre-approved alternative methodology to inform rate setting, including how using the cost of care promotes the stabilization of child care providers? The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware. NH will categorize data by program type and geographic location as well as by age groups. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? The development of the Narrow Cost Analysis data, which informs rate setting, the cost of quality in Accredited and (at the time) Licensed Plus programs was used a benchmark for the cost of quality and was factored into the rate setting decision as a baseline for quality. This resulted along with data around operational costs, rising costs and staff wage increases became the basis for the Narrow Cost Analysis and thus the percentile for rates and the overall rate changes. Granite Steps for Quality (GSQ) distributes quarterly incentive payments as programs are approved. The GSQ incentives are based on quality performance markers as determined through compliance documentation and an onsite observance and assessment. GSQ and Licensed Plus programs offers, in addition to scholarship based payments, additional incentives to providers who do not currently care for children receiving CCSP support. Child care programs that are enrolled in the NH Child Care Scholarship Program and have been Licensed Plus (under the old QRIS) or nationally Accredited receive a percentage each month of their prior month’s scholarship billing amount. Licensed Plus providers receive 5% of the previous month’s billing while Accredited programs receive 10%. These Quality Stipends are computed automatically and are added to the first manifest of each month. For the months during which there are no children whose families qualify for the NH Child Care Scholarship in attendance, these programs do not receive a Quality Stipend. The new GSQ pays monthly based on both scholarship children and quarterly and annually based on the quality step that has been achieved and the program size. e. Identify and describe any additional facts (not covered in responses to 4.3.1 – 4.3.3) that the Lead Agency considered in determining its payment rates to ensure equal access. Non applicable