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). 7/1/2023 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)? Rates are reported monthly. To convert to a weekly rate, DCYF divided 365 days in a year by 12 months, then divided the result by 7 days to determine number of weeks per month (4.3452381), and then divided the monthly rate by that number. 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) 2500.0 8 Per Month 0.00 575.39 50.00 2540.0 0 2625.0 0 2805.0 0 Family Child Care for Infants (6 months) 2124.1 0 Per Month 0.00 488.83 85.00 1800.0 0 1800.0 0 1900.0 0 Center Care for Toddlers (18 months) 2234.0 0 Per Month 0.00 513.56 50.00 2270.0 0 2375.0 0 2555.0 0 Family Child Care for Toddlers (18 months) 2166.7 8 Per Month 0.00 498.66 85.00 1848.0 0 1900.0 0 2058.3 3 Center Care for Preschool ers (4 years) 1884.9 6 Per Month 0.00 433.32 45.00 1980.0 0 2020.0 0 2200.0 0 Family Child Care for Preschool ers (4 years) 1980.0 0 Per Month 0.00 455.67 85.00 1650.0 0 1733.3 3 1895.0 0 Center Care for School- Age (6 years) 1994.0 8 Per Month 0.00 458.41 90.00 1305.0 0 1408.3 3 1580.0 0 Family Child Care for School- Age (6 years) 1733.3 8 Per Month 0.00 398.91 85.00 1733.0 0 1733.0 0 1733.0 0 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) 1299.9 8 Per Month 0.00 299.19 15.00 1500.0 0 1550.0 0 1674.0 0 Family Child Care for Infants (6 months) 1299.9 8 Per Month 0.00 299.19 0.00 1700.0 0 1800.0 0 1800.0 0 Center Care for Toddlers (18 months) 1244.9 8 Per Month 0.00 286.53 15.00 1350.0 0 1350.0 0 1390.0 0 Family Child Care for Toddlers (18 months) 1299.9 8 Per Month 0.00 299.19 20.00 1350.0 0 1452.0 0 1540.0 0 Center Care for Preschool ers (4 years) 1226.9 4 Per Month 0.00 282.38 20.00 1430.0 0 1440.0 0 1565.0 0 Family Child Care for Preschool ers (4 years) 1191.9 6 Per Month 0.00 274.33 15.00 1334.9 6 1400.0 0 1494.9 0 Center Care for School- Age (6 years) 720.06 Per Month 0.00 165.72 0.00 866.67 1100.0 0 1200.0 0 Family Child Care for School- Age (6 years) 1320.0 0 Per Month 0.00 303.80 15.00 1733.3 3 1733.3 3 1733.3 3 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? [x] 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: DCYF pays for additional supports for child with special needs for level 1 the provider receives up to $11.35 per day in addition to the normal rate, for level 2 the rate is up to an additional $15.89 per hour. Licensed and certified providers may receive an infant enhancement of $90 per month for each infant. Providers that provide 30 hours of non-standard care (6pm-6am, Weekends, Holidays) in a month receive a bonus of $135 for licensed family homes and centers per child. Licensed family homes and in-home/relative providers may receive up to $30 per month, per child, for a field trip or quality enhancement fee. [ ] 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. [x] Differential rate for non-traditional hours. Describe: Providers that provide 30 hours of non-standard care (6pm-6am, Weekends, Holidays) in a month receive a bonus of $150 for licensed family homes and centers per child. ii. [x] Differential rate for children with special needs, as defined by the Lead Agency. Describe: DCYF pays for additional supports for child with special needs for level 1 the Center or Licensed Family Home provider receives up to $11.35 per day in addition to the normal rate, while an in-home/relative provider can receive up to $0.62 per hour. For level 2 the rate is up to an additional $15.89 per hour for Centers and Licensed Family Homes, or $9.41 per hour for an in-home/relative provider. iii. [x] 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: Licensed and certified providers may receive an infant enhancement of $90 per month for each infant. 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. [x] Differential rate for higher quality, as defined by the Lead Agency. Describe: Licensed providers who receive subsidy payments participate in the state's QRIS, Early Achievers. A provider's additional rate depends on their level rating (on a scale of 1 through 5) and is a percentage bonus calculated on the base rate. For licensed centers, that additional rate is as follows: Level 2=2%, Level 3=8%, Level 4=15%, and Level 5=20%. For licensed family homes, the addition rate is as follows: Level 2=2%, level 3=12%, Level 3+=15%, level 4=17%, and level 5=20%. 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. Licensed family homes and in-home/relative providers may receive up to $30 per month, per child, for a field trip or quality enhancement fee. 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? Center subsidy base rates are determined by the Legislature through the budget process. Family home base rates are determined through collective bargaining, but bargained contracts must be ratified by the Legislature. State law currently states that rates must be set according to the Market Rate Survey, at the 85th percentile of the market rate for each child age category and subsidy region, by provider type, and current rates are set at this level using the 2021 survey. The Legislature will take up the issue of whether to set rates based on 2024 market rate data, or whether to set them according to the Cost of Quality Care model, in the 2025 legislative session. In DCYF's Cost of Quality Care and Market Rate Study Report DCYF compared current subsidy rates to the Cost of Quality Care from the alternative methodology, both based on current provider and staff wages at various levels of quality in the state's QRIS, and based on recommendations from providers on baseline assumptions around cost drivers, including living wages for staff. Results indicate that current subsidy rates are below the Cost of Quality Care at levels 3 and above in Early Achievers, and are even farther behind Cost of Quality Care based on provider recommendations. b. How did the Lead Agency determine that the rates are adequate to meet health, safety, quality, and staffing requirements under CCDF? DCYF compared the cost of care at variously levels of quality to current Subsidy base rates. Based on the Cost of Quality Care and Market Rate Study report, current subsidy rates are in some regions and child age groups adequate to meet the cost of care assuming baseline CCDF health and safety requirements, but are often inadequate to meet the cost of quality care defined as level 3 and above in Early Achievers. Current rates were set by the Legislature according to the Market Rate Survey from 2021. Legislative action is required to change rates based on the current survey. 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? DCYF contracted for a cost- of-quality study in 2013 which provided the foundation of the tiered reimbursement rates by Early Achievers level. Since then, two additional cost of quality care studies, one in 2020 and another in 2021 have supported the need to pay tiered reimbursement in addition to base rates in order to provide total reimbursement better aligned to cost of care. Tiered reimbursement rates for licensed family homes are determined by collective bargaining agreement, ratified by the legislative process. Use of the cost of quality care alternative methodology promotes stabilization of child care providers by providing a basis upon which the Legislature can determine subsidy base rates that support a living wage for providers and their staff, and that pays for the cost of quality care, not just care that meets baseline health and safety requirements. d. How did the Lead Agency account for the cost of higher quality while setting payment rates? DCYF allows providers to receive subsidy payments in excess of their private pay rate, with the 2020 cost of quality care report, and now the 2021 report and cost model, providing the analytical justification ￿ to support cost of quality care. 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