4.3 Adequate Payment Rates

The Lead Agency must set CCDF subsidy payment rates in accordance with the results of the current MRS or ACF pre-approved alternative methodology and at a level to ensure equal access for eligible families to child care services comparable with those provided to families not receiving CCDF assistance. Lead Agencies are also required to provide a summary of data and facts to demonstrate how payment rates ensure equal access, which means the Lead Agency must also consider the costs of base level care and higher quality care as part of its rate setting. Finally, the Lead Agency must re-evaluate its payment rates at least every 3 years. The ages and types of care listed in the base payment rate tables are meant to provide a snapshot of the categories of rates and are not intended to be comprehensive of all categories that might exist or to reflect the terms used by the Lead Agency for particular ages. If rates are not statewide, please provide all variations of payment rates when reporting base payment rates below. Base rates are the lowest, foundational rates before any differentials are added (e.g., for higher quality or other purposes) and must be sufficient to ensure that minimum health, safety, quality, and staffing requirements are covered. These are the rates that will be used to determine compliance with equal access requirements. 4.3.1 Payment rates a. Are the payment rates that the Lead Agency is reporting in 4.3.2 set statewide by the Lead Agency? [x] Yes. i. If yes, check if the Lead Agency: [ ] Sets the same payment rates for the entire State or Territory. [x] Sets different payment rates for different regions in the State or Territory. [ ] No. ii. If no, identify how many jurisdictions set their own payment rates: b. Provide the date the current payment rates became effective (i.e., date of last payment rate update based on most recent MRS or ACF pre-approved alternative methodology as reported in 4.2.1). 8/3/2023 c. If the Lead Agency does not publish weekly rates, then how were the rates reported in 4.3.2 or 4.3.3 calculated (e.g., were daily rates multiplied by 5 or monthly rates divided by 4.3)? Daily rates are published. Daily rates are multiplied by five to obtain the weekly rate. 4.3.2 Base payment rates a. Provide the base payment rates in the tables below. If the Lead Agency completed a market rate survey (MRS), provide the percentiles based on the most recent MRS for the identified categories. If the Lead Agency sets different payment rates for different regions in the State or Territory (and checked 4.3.1aii), provide the rates for the most populous region as well as the region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. The preamble to the 2016 final rule states that a benchmark for adequate payment rates is the 75th percentile of the most recent MRS. The 75th percentile benchmark applies to the base rates. The 75th percentile is the number separating the lowest 75 percent of rates from the highest 25 percent. Setting rates at the 75th percentile, while not a requirement, would ensure that eligible families can afford three out of four child care providers. In addition to reporting the 75th percentile in the tables below, the Lead Agency must also report the 50th percentile and 60th percentile for each identified category. If the Lead Agency conducted an ACF pre-approved alternative methodology, provide the estimated cost of care for the identified categories, as well as the percentage of the cost of care covered by the established payment rate. If the Lead Agency indicated it sets different payment rates for different regions in the State or Territory in 4.3.1.a, provide the estimated cost of care and the percentage of the cost of care covered by the established payment rate for the most populous region as well as the region with rates established at the lowest percent of the cost of care. For each identified category below, provide the percentage of providers who are receiving the base rate without any add-ons or differential payments. Provide the full-time weekly base payment rates in the table below. If weekly payment rates are not published, then the Lead Agency will need to calculate its equivalent. i. Table 1: Complete if rates are set statewide. If rates are not set statewide, provide rates for most populous region. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) 94.00 Per Day 100.00 470.00 125.00 Per Day 75.00 Family Child Care for Infants (6 months) 81.00 Per Day 100.00 405.00 81.00 Per Day 100.00 Center Care for Toddlers (18 months) 81.00 Per Day 100.00 405.00 108.00 Per Day 75.00 Family Child Care for Toddlers (18 months) 81.00 Per Day 100.00 405.00 81.00 Per Day 100.00 Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Preschool ers (4 years) 70.00 Per Day 100.00 350.00 73.00 Per Day 75.00 Family Child Care for Preschool ers (4 years) 81.00 Per Day 100.00 405.00 81.00 Per Day 100.00 Center Care for School- Age (6 years) 61.00 Per Day 100.00 305.00 52.00 Per Day 75.00 Family Child Care for School- Age (6 years) 81.00 Per Day 100.00 405.00 81.00 Per Day 100.00 ii. Table 2: Do not complete if rates are set statewide. If rates are not set statewide, provide rates for region with payment rates set at the lowest percentile. Percentiles are not required if the Lead Agency also conducted an ACF pre-approved alternative methodology but must be reported if the Lead Agency conducted an MRS only. Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Center Care for Infants (6 months) Family Child Care for Infants (6 months) Center Care for Toddlers (18 months) Care Type Base payment rate (specify unit, e.g., per day, per week, per month) % of providers receiving Base rate Full-Time Weekly Base Payment Rate What is the percentile of the rate? (MRS) What is the 50th percentile of the rate? (MRS) What is the 60th percentile of the rate? (MRS) What is the 75th percentile of the rate? (MRS) What is the estimated cost of care? (Alternative Methodology) What percent of the estimated cost of care is the rate? Family Child Care for Toddlers (18 months) Center Care for Preschool ers (4 years) Family Child Care for Preschool ers (4 years) Center Care for School- Age (6 years) Family Child Care for School- Age (6 years) b. Does the Lead Agency certify that the percentiles reported in the table above are calculated based on their most recent MRS or ACF pre-approved Alternative Methodology? [x] Yes. [ ] No. If no, what is the year of the MRS or ACF pre-approved alternative methodology that the Lead Agency used? What was the reason for not using the most recent MRS or ACF pre-approved alternative methodology? Describe: 4.3.3 Tiered rates, differential rates, and add-ons Lead Agencies may establish tiered rates, differential rates, or add-ons on top of their base rates as a way to increase payment rates for targeted needs (e.g., a higher rate for serving children with special needs). a. Does the Lead Agency provide any rate add-ons above the base rate? [ ] Yes. If yes, describe the add-ons, including what they are, who is eligible to receive the add-ons, and how often are they paid: [x] No. b. Has the Lead Agency chosen to implement tiered reimbursement or differential rates? [x] Yes. [ ] No. Tiered or differential rates are not implemented. If yes, identify below any tiered or differential rates, and, at a minimum, indicate the process and basis used for determining the tiered rates, including if the rates were based on the MRS or an ACF pre-approved alternative methodology. Check and describe all that apply: i. [ ] Differential rate for non-traditional hours. Describe: ii. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: Providers may be paid up to twice the Maximum Reimbursable Rate for children with special needs. The special needs rate should be used when it is appropriate, as determined by the local department of social services in consultation with the parent, provider, and appropriate professional. Details of this consultation, and supporting documentation of the child's special needs, must be recorded in the case record. The evaluation by an appropriate professional must be provided in writing. The rate is paid as part of the regular payment (twice monthly). iii. [ ] Differential rate for infants and toddlers. Note: Do not check if the Lead Agency has a different base rate for infants/toddlers with no separate bonus or add-on. Describe: iv. [ ] Differential rate for school-age programs. Note: Do not check if the Lead Agency has a different base rate for school-age children with no separate bonus or add-on. Describe: v. [ ] Differential rate for higher quality, as defined by the Lead Agency. Describe: vi. [ ] Other differential rates or tiered rates. For example, differential rates for geographic area or for type of provider. Describe: vii. If applicable, describe any additional add-on rates that you have besides those identified above. Does the Lead Agency reduce provider payments if the price the provider charges to private-pay families not participating in CCDF is below the Lead Agency’s established payment rate? [ ] Yes. If yes, describe: [x] No. 4.3.4 Establishing payment rates Describe how the Lead Agency established payment rates: a. What was the Lead Agency’s methodology or process for setting the rates or how did the Lead Agency use their data to set rates? Payment rates are set at a proportion of estimated cost using VDOE’s alternative methodology, depending on provider type and level of regulatory oversight. The cost estimation model accounts for key cost drivers associated with meeting health, safety, quality, and staffing requirements under CCDF, including group sizes, teacher-child ratios, and professional development requirements. Payment rates for centers are set regionally at 75% of estimated cost for a medium size center, reflecting the average capacity of licensed and regulated centers in Virginia. Setting rates at 75% of estimated cost allows programs to meet basic health and safety requirements while supporting progress towards competitive compensation for child care educators, recognizing the wide variation in actual costs of operation at the individual center level. Payment rates for family day homes are set regionally for licensed and unlicensed programs. On August 3, 2023, the rates for family day homes increased to 100% of estimated costs. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? Payment rates reflect estimated cost using VDOE’s alternative methodology. The cost estimation model accounts for key cost drivers associated with meeting health, safety, quality, and staffing requirements under CCDF, depending on provider type and level of regulatory oversight, including group sizes, teacher-child ratios, and professional development requirements. c. How did the Lead Agency use the cost of care, either from the narrow cost analysis or the ACF pre-approved alternative methodology to inform rate setting, including how using the cost of care promotes the stabilization of child care providers? Payment rates are set at a proportion of estimated cost using VDOE’s alternative methodology. Payment rates for centers are set regionally at 75 percent of estimated cost for a medium-size center, reflecting the average capacity of licensed and regulated centers in Virginia. Setting rates at 75 percent of estimated cost allows programs to meet basic health and safety requirements while supporting progress towards competitive compensation for child care educators, recognizing the wide variation in actual costs of operation at the individual center level. Payment rates for family day homes are set regionally for licensed and unlicensed programs. On August 3, 2023, the rates for family day homes increased to 100 percent of estimated costs. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? Rates reflect higher quality expectations for which publicly-funded programs are now accountable under Virginia’s new uniform quality measurement and improvement system, VQB5. Beginning in the fall of 2023, all publicly funded programs are now required to participate in VQB5. Virginia's alternative methodology examines the cost of meeting quality expectations in VQB5. Virginia selected two nationally recognized quality standard measurements for VQB5: interactions and curriculum. All publicly-funded programs have the same quality expectations under VQB5. There are no mandatory costs associated with participating in VQB5 or achieving higher levels of quality. For instance, use of curriculum is optional, and programs may choose from an expansive list of vetted and approved curricula. This list includes free/low-cost approved early childhood curriculum options. The cost estimation model’s core assumption is that being able to attract and retain competent and competitive educators is the primary driver of quality and quality improvement. As such, the model accounts for competitive compensation, benefits, and planning time to facilitate a stable and supported workforce for providers meeting or exceeding quality expectations. e. Identify and describe any additional facts (not covered in responses to 4.3.1 – 4.3.3) that the Lead Agency considered in determining its payment rates to ensure equal access. NA