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 are not paid prospectively. DHS/DFD utilizes an automated time and attendance system which calculates attendance utilization and issues ACH payments to providers bi-weekly. DHS/DFD is seeking a waiver to meet 2024 CCDF Final Rule. b. Does the Lead Agency pay based on authorized enrollment for all provider types? [x] 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: [ ] 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: New Jersey also pays a transportation fee to providers on behalf of WFNJ/TANF participants. Additionally, an annual registration fee is provided to Family Child Care providers. New Jersey also significantly increased provider reimbursement rates for its child care assistance program by implementing differential payments of $300 per child/per month during the COVID-19 pandemic. These differential payments have continued using state budget funds helping to offset the cost and expense of any parental tuition and 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: All providers are required to sign a Parent/Applicant Provider Agreement (PAPA) which reflects the maximum daily rate, daily co-payment (if any), and the daily rate. The Agreement clearly authorizes payments only for the period of service indicated. It contains the parent/child information, child care start date and stop date for each child, summary of payment information for each child, and provider information. It also includes the Parent/Provider/Agency Certification page that fully explains the agency, parent, and provider responsibilities affecting the child care services. In accordance with State regulations at N.J.A.C. 10:15-10.3, providers must submit evidence of services being provided and request payment within 60 days of the service provided. DFDI 12-01-05 and DFDI 12-07-03 outlines payment processing and discrepancy reporting. Providers are required to submit attendance log within 60 days of payment, when there is a payment discrepancy. 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: When a termination notice is issued to the family, the contracted agency must concurrently issue a written notice of termination to all providers rendering services to the family. The termination notice issued to the provider(s) must indicate that the termination is effective a minimum of 5 days after receiving the notice. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: If the provider has a payment issue, the provider can request a case review by the contracted agency and/or DHS/DFD. The contracted agency must inform providers of their right to request case reviews. A timely request must be made within 10 days of the date of the disqualification notice. If the provider is not satisfied with a contracted agency’s review, the provider can request a review by DHS/DFD. Additionally, providers are granted 60 days to identify payment discrepancies. CCR&R agencies advise providers to review their E-Child Care payment portal for children’s start and end dates to avoid discrepancies. Providers are reminded of their responsibility to contact the CCR&R agency to report children no longer in attendance so they can be removed from the E-Child Care payment portal in order to avoid discrepancies and recoupments. As part of the CCR&Rs responsibilities, outlined in their contract, they are required to have written procedures and standards to resolve payment discrepancies from providers and track payment to monitor payment authorization/approvals, discrepancies, and reconciliation. They are required to resolve payment discrepancies within two (2) pay cycles. 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? DHS/DFD’s electronic payment system is designed to issue timely payments to providers. Payments are issued bi-weekly through an ACH process to avoid overburdening providers with paper invoices. DHS/DFD pays providers for twenty-two (22) closure days; and allows for full payment when children are out sick. Collectively, these payment practices and policies provide stable funding and encourage more child care providers to participate in the CCAP. To help support the fixed operational costs, DHS/DFD offers either full-time or part-time rates, instead of hourly rates. Since 2018, DHS/DFD has annually increased rates and has a quality tiered structure for centers and family child care providers. In addition to rate increases and payment policies, providers receive support for ongoing professional development trainings, health and business consultants (at no cost) as well as scholarships for staff. Ongoing grants launched by DHS/DFD and partners have been made available for providers, as a criterion for participating in the Child Care Assistance Program. These policies, services and initiatives promote financial stability to providers and ensure equal access to consistent and adequate resources that incentivize providers to accept families receiving child care assistance.