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: The Lead Agency currently allows providers to bill via their child care billing form/voucher at the beginning of the month for the total number of hours a child is scheduled to be in care for the month with no limitation on absent days. Payment in advance of care is a generally accepted payment practice in Oregon, but due to limitations with the current provider pay system, the Lead Agency is unable to make payments to providers in advance of or at the beginning of the delivery of child care services. The general timeframe for processing billing forms is approximately 3-4 business days upon receipt of a completed child care billing form. Oregon submitted a waiver for implementation of prospective payments on May 6, 2024. 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: Oregon moved toward enrollment-based payment in January 2023, when a policy change was made to approve families for either a part-time or full-time child care authorization for their eligibility period. This also expanded allowable uses of child care during the certification period, delinking initially qualifying activities from families’ use of child care throughout the 12-month certification period. Despite these advancements, however, limitations to Oregon’s current provider payment system do not allow for full enrollment-based payment as providers still have to bill on a monthly basis for scheduled hours of care/enrollment status. This is an area that the state is working to resolve through the development of a new provider management platform. The current provider pay system will pay providers based on the hours they report providing care, not on a full-time or part-time slot. Providers may still be paid the full-time amount if they bill over 136 hours per month for their scheduled hours of care to be provided, which is considered full-time. Oregon submitted a waiver for implementation of full enrollment-based payment on May 6, 2024. 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)? [ ] Yes. [x] 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: Beginning January 1, 2023, families are approved for child care hours on a part-time or full-time basis. If their eligible activities - either from employment, education, or job training as defined in former sections - are less than 20 hours per week, the family is eligible for 20 hours per week of child care assistance (plus an additional 25% travel time). This will pay out at a part-time monthly rate. If their eligible activities are greater than 20 hours but less than 40 hours per week, they are approved for a full-time allocation of hours at 40 hours per week (plus an additional 25% travel time). Families may use their child care hours for qualifying activities as well as any other activities that support family well-being, and these are not defined by the Lead Agency. Families receiving TANF are eligible for ERDC. All families receiving TANF and ERDC together receive a minimum of the part-time authorization of hours. Families who require more than part-time hours to complete their employment, job search, education, or family well-being activities need to request full-time hours from their ODHS worker. Hourly payments are made if the provider bills as such. Providing hourly payments enables families' better access to needed child care especially during non-traditional work hours and weekends. For these providers, the hourly rate applies when children are in care less than 63 hours per month. The full-time monthly rate applies when children are in care 136 hours or more per month and when the provider is designated as the primary provider for the family case. Head Start contracted slots are paid at the full-time monthly rate. Oregon received a preliminary notice of non-compliance related to this item from the Office of Child Care on July 24, 2023. Ongoing discussions with Region X have occurred around this topic, as the ability of providers to be able to bill hourly supports family, friend, and neighbor care and aligns to these generally accepted payment practices, as well as for drop-in and back-up care. Without the option for providers to bill hourly, there would be severe limitations on Oregon's budgetary ability to offer back-up or drop-in care options for families, restricting access and limiting their ability to maintain employment or other activities to support family well-being. Guidance is provided about how to bill within the provider guide in accordance with the provider's preferred billing method. 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: Oregon covers registration fees for all provider types. Registration fees cover fees required for the child to enroll or continue enrollment in a facility. These must be fees that are also charged to private pay families. Any fees over $150 per child must be approved by Lead Agency’s Child Care Assistance Program Office. There is no limit to the number of registration fees that can be covered per child per year. Fees intended to hold a slot for future use, penalty fees (like late pick-up fees) and deposits for payment of future care cannot be covered. [ ] 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: Providers receive an approval notice when they are approved to receive subsidy payments. All providers receive a copy of DELC 7492 Child Care Provider Guide within 45 days of approval, which includes information on payment rates and processes, information on how to correct or dispute a payment amount, overpayment collections, payment timeframes and the union dues deductions for union members. Child Care Providers sign an agreement on page 8 of the listing form DELC 7494. 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: The provider is mailed a notice at the time information is verified for changes to a family or provider eligibility. The notice is sent within one to two business days of the action being taken to close or discontinue an ERDC case. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Providers are given 90 days before a voucher is considered expired and no longer valid for payment for ERDC. When a provider has a good cause for not submitting a billing form within this time frame, the Lead Agency’s Direct Pay Unit will issue the voucher for payment. The Direct Pay Unit works with providers, parents, and the Oregon Department of Human Services staff to resolve payment inaccuracies or disputes as quickly as possible. Providers will need to request an adjustment within 6 months of payment, unless it was an administrative error, for it to be processed. Most adjustments are processed and issued within 48 hours to 4 business days of the request. If a determination to process an adjustment cannot be reached, the Direct Pay Unit can contact the Lead Agency’s CCAP team as another avenue to review the situation. When a family child care provider disagrees with the outcome of a payment dispute a grievance can be filed with the union representing the provider. Non-unionized and unionized providers can contact Governor’s Advocacy to receive a secondary review of their dispute. 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? The Lead Agency does not have separate payment practices for different provider types, with the exception of the allowance of a part-time monthly rate for license-exempt providers. This may be reviewed for changes in the future to better align to enrollment-based payment for all provider types but has traditionally followed generally accepted payment practices for license- exempt provider types billing by hour for care provided/scheduled. The Lead agency allows all provider types to receive payments at the beginning of the month for scheduled care which supports providers and equal access.