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)? [x] Yes. If yes, describe: Boards prospectively pay all regulated providers (not including relative care providers) in their workforce area on a standard biweekly schedule set by TWC. Payment to child care providers is based on enrollment. While paying child care businesses prospectively is considered a generally accepted practice, this is not the case for relative care. [ ] 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: 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: TWC rules require that Boards ensure that a provider’s published rate, used to calculate the maximum provider payment rate, includes the provider enrollment, supply, and activity fees. TWC’s CCS Guide Section B-700 describes the procedures that Boards must use to calculate providers’ published rates: The published daily rate is the sum of calculated daily rates and calculated daily fees. Boards must ensure that child care contractors use the methodology outlined in B-700 to calculate providers’ published rates and applicable fees upon renewal of provider agreements. Daily fees include the following: Enrollment and registration fees; Supply fees; and Activity 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: Boards establish contractual agreements with each provider receiving CCDF subsidies. TWC issued guidance to Boards (WD Letter 14-22, Change 1 and subsequent issuances) that includes a sample Provider Agreement detailing the following required elements: payment policies, including rates, schedules, fees, and the dispute resolution process. 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: Details of each child's authorization, including the days of the week authorized and the beginning and end dates, are sent to the provider based on local Board procedures. Updates to the authorization, including any changes in the days authorized and end dates, are immediately conveyed to the provider as outlined in local Board procedures (for example, by phone or email). CCS rule §809.13(c)(10) requires that Board policies regarding the transfer of a child from one provider to another include a waiting period of two weeks before the effective date of the transfer. This rule, which allows for limited exceptions such as when a provider has been placed on corrective action with CCR, ensures that providers have notice prior to a subsidy child being unenrolled. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Boards or Board child care contractors prospectively pay providers on a biweekly schedule. Upon receipt of the payment, providers may contact Boards or Board contractors regarding any payment inaccuracy at any time, and Boards are able to resolve any discrepancy through direct payment adjustments to the provider. 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? TWC Child Care Services rule §809.91 outlines the requirements to be a child care provider and §809.93 outlines provider payment rates. Additionally, parents have parental choice and the ability to choose any provider that has entered into an agreement to provide subsidized child care. TWC’s prospective payment practice is new and will be managed based on feedback from providers and other stakeholders on challenges with the provider payment practices. TWC will monitor data and feedback to identify any trends in prospective payment practices supporting parent choice to a full range of providers for eligible families to child care services comparable with those provided to families not receiving CCDF assistance.