Child Development Division
| Subject: Changes in Law Affecting Alternative Payment Programs and Family Child Care Home Education Networks Utilizing the Regional Market Rate Ceilings | Number: 06-16 |
| Authority: Assembly Bill 1808, Chapter 75, Statutes of 2006, Education Code sections 8222 and 8222.5, and California Code of Regulations, Title 5, Education, sections 18074 through 18076.3, sections 18220 through 18224, sections 18413 and 18428. | Date: July 2006 Expires: Until Rescinded |
ATTENTION: Executive Directors and Programs Directors of Alternative Payment Programs and Family Child Care Home Education Networks
PURPOSE
The purpose of this Management Bulletin is to provide child care and development contractors operating alternative payment programs (APP) and family child care home education networks (FCCHENs with CFCC contracts) with new requirements for determining rates for both licensed and licensed exempt providers. These changes are the result of passage of Assembly Bill 1808 (Chapter 75, Statutes of 2006) signed by the Governor on July 12, 2006. This bill included an urgency clause and became effective immediately.
BACKGROUND
On June 8, 2004, the California Code of Regulations (CCR), Title 5, Education, Subchapter 2.5, sections 18074 through 18076.3, regarding utilization of the regional market rate ceilings were adopted as final regulations. On August 16, 2004, Senate Bill 1104 (Chapter 229, Statutes of 2004) suspended CCR, Title 5, Education, sections 18074.3, Establishment of Reimbursement Rate and 18074.4, Establishment of Provider Reimbursement Rate Utilizing the Comparable Local Rate. On July 19, 2005, Senate Bill 68 (Chapter 78, Statutes of 2005) once again suspended CCR, Title 5, Education, sections 18074.3 and 18074.4 until July 1, 2006.
Assembly Bill 1808 (Chapter 75, Statutes of 2006) became effective July 12, 2006. This bill amends Education Code (EC) Section 8222 to provide specific direction to APPs and FCCHENs on the process by which rates are established for subsidized care. In addition, EC Section 8222.5 is repealed.
STATUTORY REQUIREMENTS
Reimbursement Rates for Licensed Providers
As a result of the amendments and additions made to the EC, the CCR, Title 5, Education, Chapter 19, sections 18074.1(b), (c), (d), 18074.3, 18074.4, 18074.5, and 18074.6 are in conflict with the statute and must no longer be applied when establishing rates. Child development contractors operating APPs and FCCHENs must now follow the provisions in the EC listed below when making payments to licensed providers.
EC Section 8222. Amount of payments; limitations; adjustment factors
(a) Payments made by alternative payment programs shall be equal to the rate charged to full-cost families in each program, not to exceed the applicable market rate ceiling. Alternative payment programs may expend more than the standard reimbursement rate for a particular child. However, the aggregate payments for services purchased by the agency during the contract year may not exceed the assigned reimbursable amount as established by the contract for the year. No agency may make payments in excess of the rate charged to full-cost families. This section does not preclude alternative payment programs from using the average daily enrollment adjustment factors for children with exceptional needs as provided in Section 8265.5.(b) Alternative payment programs shall reimburse licensed child care providers in accordance with an annual market rate survey, at a rate not to exceed the ceilings established pursuant to statute.(c) An alternative payment program shall reimburse a licensed provider for child care of a subsidized child based on the rate charged by the provider to nonsubsidized families, if any, for the same services, or the rates established by the provider for prospective nonsubsidized families. A licensed child care provider shall submit to the alternative payment program a copy of the provider's rate sheet listing the rates charged, and the provider's discount or scholarship policies, if any, along with a statement signed by the provider confirming that the rates charged for any subsidized child are equal to or less than the rates charged for a nonsubsidized child.(d) An alternative payment program shall maintain a copy of the rate sheet and the confirmation statement.(e) A licensed child care provider shall submit to the local resource and referral agency a copy of the provider's rate sheet listing rates charged, and the provider's discount or scholarship policies, if any, and shall self-certify that the information is correct.(f) Each licensed child care provider may alter rate levels for subsidized children once per year and shall provide the alternative payment program and resource and referral agency with the updated information pursuant to subdivisions (c) and (e), to reflect any changes.Assembly Bill 1808 did not supersede other existing regulations in CCR, Title 5, Education, Subchapter 2.5. Alternative payment agencies and FCCHENs must continue to follow CCR, Title 5, Education, sections:
- 18074, Applicable Regulations
- 18074.1(a), (e), (f), (g), (h), Definition(s)
- 18074.2, Application of Regional Market Rate Ceilings
- 18075, Reimbursement Rate Categories
- 18075.1, Adjustment for Evenings and/or Weekends for Licensed Providers
- 18075.2, Adjustment for Children with Exceptional Needs
- 18076, Limitations on Reimbursement
- 18076.1, Other Reimbursable Fees
- 18076.2, Reimbursable Hours of Care
- 18076.3, Reimbursement to Multiple Providers
- The regulations contained in Subchapter 10 regarding APPs
- For CalWORKs contractors, the regulations contained 18413, Provider Payments and 18428, Provider Payments
Reimbursement Rates for Licensed-Exempt Providers
When making payments to a licensed exempt provider (trustlined/relative), APPs should pay the provider the requested rate up to the appropriate regional market rate ceiling. In addition, contractors must follow the applicable provisions in CCR, Title 5, Education, Subchapter 10 for alternative payment programs, and sections 18413 and 18428.
As a reminder, in home exempt providers are classified as domestic service workers under the Fair Labor Standards Act, United States Code Section 206(a) and are covered under minimum wage laws. Contractors must ensure that a payment made to an in-home exempt provider is equivalent to minimum wage. As a result, contractors shall require a minimum number of children in care to ensure that the provider will receive minimum wage based on the regional market rate ceilings before in-home child development services can be provided.
The California Department of Education, Child Development Division (CDE/CDD) is submitting a request to the Office of Administrative Law for the sole purpose of repealing the regulations sections that have been identified in this Management Bulletin that are in conflict with the statute.
The CDE/CDD anticipates that additional regulations will be necessary to clarify some aspects of the new statutory language. The regulations package will be developed in the near future to clarify the requirements in EC Section 8222(g), (h), and (i) that require licensed providers to post their rates, APPs to verify provider rates once a year, and the CDE to develop regulations to address discrepancies in provider rates levels identified through the rate verification process.
EC Section 8222.5. Payments to child care facilities; eligibility
This section was repealed. It contained the provision for APPs to make payments to child care facilities with at least 75 percent subsidized children with certain specified exceptions.
Questions regarding information contained in this Management Bulletin should be addressed to the assigned CDD Field Services Consultant.
This Management Bulletin is mandatory only to the extent that it cites a specific statutory and/or regulatory requirement. Any portion of this Management Bulletin that is not supported by a specific statutory and/or regulatory requirement is not prescriptive pursuant to Education Code 33308.5.
