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: Pennsylvania does not pay any provider prospectively. Child care providers submit invoices to the ELRC for the service month by the fifth of the following month. The ELRC ensures payment to child care providers by the 20th of the month. Pennsylvania is applying for a waiver to meet to meet the requirement of paying providers prospectively. The waiver is needed to provide time to make system changes and create new protocols. 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. [x] 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: Pennsylvania does not pay any provider based on authorized enrollments. Currently, Pennsylvania makes payments to providers based on attendance. Pennsylvania is applying for a waiver to meet to meet the requirement of paying providers based on enrollment. The waiver is needed to provide time to make system changes and create new protocols. [ ] 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: All DHS certified providers receive a registration fee for each newly enrolled CCW child, enrolled on or after January 1, 2023, regardless of whether the provider charges private pay families a registration fee. The amount of the registration fees are: Child Care Centers - $75, Group Child Care Homes - $50 and Family Child Care Homes - $50. These amounts represent the 75th percentile of registration fees as reported in the 2022 Market Rate Survey. [ ] 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: The Provider Agreements states providers must submit the invoice to the ELRC by the fifth calendar day of the month following the month child care is provided. If the invoice is received timely, the ELRC will make payment to the provider by the 20th of the month following the month child care is provided. The ELRC will not make a payment for an individual child until the signed invoice is received. OCDEL program representatives monitor the timely processing of invoices by reviewing the 704 -Pending Invoice Extract report in PELICAN monthly. Program Representatives also can check the status of invoices in real time by utilizing the invoice search function in PELICAN. The ELRC may terminate the Provider Agreement if more than two invoices are received by the ELRC following the 20th calendar day of the month following the month in which child care is provided and the ELRC has taken steps to work with the parent/caretaker’s provider but was unable to resolve the problem. The ELRC will not make payment on any invoice received more than 60 calendar days following the last day of the calendar month that child care is provided. Invoices for the months of May and June of the current fiscal year must be received by July 30. 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: ELRCs ensure prompt notice is sent through automatic letters within PELICAN of any changes to the family’s eligibility status that could impact payments. Such notice is sent no later than the day the ELRC becomes aware such a change will occur. The ELRCs have checks and balances in place to ensure this action takes place in accordance with their contract with OCDEL. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: OCDEL works with the ELRC and uses the DHS Bureau of Hearings and Appeals (BHA) statute timelines to ensure a timely appeal and resolution process for any payment inaccuracies and disputes. Procedures relating to the method of appeal will be as follows: (i) A hearing request must be made to the agency which notified the [p/c] of its decision or action. When an appeal is taken, the appeal letter and proposed action must be forwarded to the BHA. (ii) A request for a hearing will usually be made in writing. Appeals must specify the action appealed from and must be signed by the parent/caretaker. (iii) If an oral request for a hearing is made, the ELRC will either give the parent/caretaker the appropriate form to complete or record the request for a hearing with a statement of the action appealed from and the reasons given by the parent/caretaker on the proper form and obtain the signature of the parent/caretaker. (iv) An oral appeal shall be reduced to a written appeal by the parent/caretaker within 7 calendar days following the date the parent/caretaker orally requested an appeal). (v) Appeals to be scheduled for a hearing must be forwarded to the BHA within 3 working days from the date the appeal was received, and date stamped. OCDEL also works with the Office of State Inspector General if there is a suspicion of fraud with a child care provider. If there is an error on part of the ELRC, the ELRC will address with the provider to come to a resolution. There is a 60-day window for providers to inform the ELRC of a payment issue. 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? Paying providers, a full-time or part-time daily rate, instead of paying for only the number of hours the child attends; paying a full payment if a child attends at least 85 percent of the authorized time; and paying certified child care providers a registration fee, affords providers comparable compensation received from private pay families, therefore granting equal access to providers for families enrolled in Child Care Works.