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: ECECD pays child care providers on a monthly basis. Payments reflect a month of service provision and are paid no later than the fifth day of the following month in which the services was rendered. ECECD also performs a weekly pay run to capture any payments that were not paid in the monthly payment run. New Mexico is planning to submit a waiver for prospective payments. 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: ECECD pays for reasonable mandatory registration fees as part of the rate structure. Child care providers may not charge mandatory registration 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: ECECD’s payment agreement and authorization for services is outlined in the child care placement agreement. Signed child care placement agreements (including electronically signed child care placement agreements) must be returned by hand delivery, mail, email, fax, or electronic submission to the local ECECD child care office within 30 calendar days of issuance. ECECD requires child care providers to collect required copayments from clients, unless ECECD is paying those copayments directly to the child care providers or a valid waiver is in place, and provide child care according to the terms outlined in the child care placement agreement issued by ECECD. ECECD sets child care provider rates in regulation and clearly identifies the set rate in each child care placement agreement. ECECD also gives child care providers who participate in child care assistance a copy of the applicable regulations. ECECD pays for child care benefits as set forth in each placement agreement based the number of hours of care needed and the qualifying activity of the parent or legal guardian. ECECD requires that child care providers accept the rates that it pays for child care and may not charge families receiving child care assistance above the rate for the hours listed on the child care placement agreement. ECECD does not charge child care providers fees, but may sanction child care providers for failing to follow regulations, depending on the severity of the infraction, or make timely recoupment payments after reasonable notice is provided. Providers who have been sanctioned, disqualified from the child care assistance program, had assistance payments suspended or terminated, or from whom a payment recoupment is being sought may request a fair hearing. Clients or providers who are dissatisfied with the services provided by ECECD may express their complaints orally or in writing to the local field office, the central office, the director’s office or the office of the department secretary. ECECD also posts its toll free number in each field office and make its available to clients and providers upon request. The local ECECD supervisor, bureau chief, director or the secretary will respond to complaints by clients or providers orally or in writing as is deemed appropriate in each case. 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: ECECD provides prompt notice to providers regarding any changes to the family’s eligibility status through the work of the ECECD eligibility interviewers. The eligibility interviewers perform all casework functions, including the processing of payments and notifications of case actions on an ongoing basis. Ensuring that once all documents are received, notification of action is provided within 14 days. Eligibility interviewers notify clients and providers in writing of all actions that affect services, benefits, or provider payments, citing the applicable policy. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: ECECD may issue a one-time payment to a provider within 15 days of ECECD’s knowledge or receipt of notification of the provider being underpaid for child care services. Notification to ECECD by the client or provider must occur within three months of the occurrence of alleged underpayment. ECECD will seek recoupments from providers for payment of services for which they are not entitled, resulting in an overpayment. The ECECD child care worker will initiate the recoupment process and the provider must repay the amount of the overpayment to ECECD within 30 days of the notice or over an agreed upon payment period negotiated with ECECD. Failure to pay the overpayment may result in sanctions. The provider can request an administrative appeal hearing in writing within 30 calendar days from the date of ECECD’S adverse action and the hearing is conducted within 60 calendar days of receipt of the appeal request. ECECD will not seek a recoupment of payment from a client unless substantiated fraud by the client has been determined. 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? ECECD payment practices facilitate provider participation in all categories of care by providing payment based on the cost of providing care and on the child’s enrollment, rather than daily attendance.