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: Child care providers can bill for the services provided every two weeks, with the payment happening within one week of billing. CDD will be seeking a waiver of the rule while working to come into compliance through updates and changes to the systems utilized to support payment practices in the state. 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: Providers are paid on the weekly amount approved by either attendance of the child or a code to represent the reason for the absence. Coded days include provider closed days, thirty (30) per child per state fiscal year, and child absence days, which are also set at thirty (30) per child per state fiscal year. This process ensures that CDD is able to monitor for fraud. It also provides flexibility to families to use vacation or have sick time without more out of pocket costs, and to allow child care providers to have holiday or vacations without loss of funds. [ ] 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? [ ] Yes. If yes, identify the fees the Lead Agency pays for: [x] No. If no, identify the data and how data were collected to show that paying for fees is not a generally-accepted payment practice: CDD received non-compliance notice on March 11, 2024, because Vermont does not pay reasonable mandatory registration fees, or have data that supports that paying for fees is not a generally-accepted payment practice. Data will be collected to determine if collecting fees is a generally-accepted payment practice and to identify what, if any, fees CDD pays. However, CDD does not expect to be able to pay mandatory registration fees until 2025. 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 must complete a payment agreement at minimum once every three years to receive CCFAP funds, with temporary extensions given on a case-by-case basis. The written payment agreement contains information on CDD’s weekly payment schedule, and provides guidance on converting the providers’ rates to weekly rates. In addition, the provider agreement defines the invoice process, the maximum allowable days for submitting a claim for payment, and the implications for providing a false claim. The provider agreement is entered into CDDIS. The nondiscrimination and grievance policy that applies to providers is publicly available on CDD's Laws, Rules, & Procedures website and can be found here: https://outside.vermont.gov/dept/DCF/Shared%20Documents/About/Nondiscrimination- Policy.pdf?_gl=1*birg37*_ga*ODQ3MTU5MTg4LjE3MDQ4MzI2NTY.*_ga_V9WQH77KLW* MTcyNTU0Mjc1My4yMS4wLjE3MjU1NDI4ODkuMC4wLjA. 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: A start and end date are clearly noted on the payment certificate that is sent to the child care provider. When a change occurs to a certificate that could impact payment, a CDDIS Certificate Early End notice is generated by CDDIS. Providers without internet access receive a same day phone call as an alternate means of notification. e. Describe the Lead Agency’s timely appeal and resolution process for payment inaccuracies and disputes: Child Care providers may contact the CDD payments technician if they feel that a payment received was inaccurate. The CDD payments technician reviews the CDDIS invoice and responds to the provider within one business day, often sooner. If the amount is incorrect, an adjustment is made. If additional funds are due to a provider, the payment will be made on the following pay date. f. Other. Describe any other payment practices established by the Lead Agency: N/A 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 CDD payment practices incentivize providers to participate in CCFAP, which provides more access to quality child care programs for families. CDD has multiple channels for support, including a CDDIS Help Desk, CDD payments technician, and staff at the CCCSAs, to ensure providers in all categories of care have the resources and assistance needed to access CCFAP. All provider types submit bi-weekly attendance claims to be paid with 10 days of the two week service period ending. All provider types may receive direct deposit if they choose to receive payment faster than waiting to receive a paper check by mail. All provider types are able to see the payment amount they will be receiving, and the amount of payment per child soon after submitting their claim.