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Management Bulletin 17-17


Early Education and Support Division

Subject: Revised Regional Market Rate Ceilings

Number: 17-17

Date: September 2017

Expires: Until Rescinded

Authority: California Education Code, sections 8222, 8357 and 8447; California Code of Regulations, Title 5, Chapter 19 (Subchapter 2.5, Article 1: Utilization of Regional Market Rate Ceiling, Subchapter 10: Alternative Payment Programs, Chapter 19.5: California Work Opportunity and Responsibility to Kids [CalWORKs] Stage 2 and 3 programs). Assembly Bill 97, Chapter 14, AB 99, Chapter 15.

Attention: Executive Officers and Program Directors of Alternative Payment, Migrant Alternative Payment, CalWORKs Stage 2, CalWORKs Stage 3, and Family Child Care Home Education Network Programs


Purpose

The purpose of this Management Bulletin (MB) is to inform contractors operating any of the contract types listed below of revisions to the Regional Market Rate (RMR) ceilings for licensed providers beginning on January 1, 2018. This change may impact ceilings for license-exempt providers.

  • California’s Alternative Payment Program (CAPP)
  • Migrant Alternative Payment Program (CMAP)
  • CalWORKs Stage 2 Program (C2AP)
  • CalWORKs Stage 3 Program (C3AP)
  • Family Child Care Home Education Network Program (CFCC)

This MB rescinds MB 16-09 effective January 1, 2017.

Background

Current RMR ceilings are listed on the California Department of Education (CDE) Reimbursement Ceilings for Subsidized Child Care Web page at http://www3.cde.ca.gov/rcscc/.

On June 27, 2017, the Governor signed the Budget Act of 2017 (Assembly Bill [AB] 97, Chapter 14, Statutes of 2017) and approved trailer bill legislation to implement the Budget Act (AB 99, Chapter 15, Statutes of 2017).These budget actions resulted in an increase to the RMR ceilings effective January 1, 2018, with an additional increase effective January 1, 2019. The new RMR ceilings for licensed and license-exempt providers are detailed below.

Note: These acts did not make changes to other state laws pertaining to the application of RMR ceilings or those relating to provider reimbursements. Reimbursements to providers are based on the lesser of the provider’s rate (as documented on the provider’s rate sheet on file with the contractor) or the applicable RMR ceiling as determined by the California Code of Regulations, Title 5 (5 CCR) sections 18074.2, 18075, 18075.1, 18075.2, 18076, 18076.2 and 18076.3.

Policy

RMR For Licensed Providers

Beginning January 1, 2018, and January 1, 2019, respectively, programs operating the above contract types must utilize the revised ceilings in order to identify the applicable maximum reimbursement rate for licensed providers for each family’s certified child care services.

The chart below provides the RMR ceilings to be used for licensed providers for the associated timeframes. The ceilings, effective January 1, 2018, will be posted on the Reimbursement Ceilings for Subsidized Child Care Web page and will represent the greater of the 75 percentile of the 2016 RMR survey or the RMR ceiling that existed on December 31, 2017. No additional calculation needs to be taken by providers.

January 1, 2018–December 31, 2018 Commencing January 1, 2019

Commencing on January 1, 2018, and ending on December 31, 2018, the posted RMR ceilings for licensed providers have been established at the greater of the following:

  • The 75 percentile of the 2016 RMR survey for that county; or

  • The RMR ceiling for that county as it existed as of December 31, 2017.
Commencing on January 1, 2019, the RMR ceiling for licensed providers shall be established at the 75 percentile of the 2016 RMR survey for that county.

 

RMR For License-Exempt Providers

Effective January 1, 2018, the RMR ceilings for license-exempt providers must continue to be calculated at 70 percent of the established ceiling for family child care homes.

Note: During the month of September 2017, the ceilings will be available to CDE contractors on the Child Development Fiscal Services Web page at https://www2.cde.ca.gov/cdfs/logon.aspx. After logging in, you will see a link to the new ceilings. For additional information, see the Directives section of this MB.

Directives

The following applies to both licensed and license-exempt providers.

Contractors must:
  1. Review the revised RMR ceilings for their service county(ies) to identify increases. During the month of September 2017, the ceilings will be available to CDE contractors who submit fiscal reports electronically on the Child Development Fiscal Services Web page at https://www2.cde.ca.gov/cdfs/logon.aspx. After logging in, you will see a link to the new ceilings.

  2. Review records for all enrolled families. Using existing documentation, including current provider rates on file, determine if there is an increase to the benefit level due to the increase in the applicable RMR ceiling. No additional information is required, and should not be requested. If upon review it is determined that there is an increase in the maximum child care benefit, the contractor shall issue a Notice of Action (NOA) to the parent(s) to reflect the increased maximum child care benefit level for which the family is eligible. Any reimbursement for services provided on or after January 1, 2018, must be no more than those allowed under the revised RMR ceilings.

    • January 1, 2018, is the date the provider is eligible for an increase in reimbursement based on revised ceilings or provider rate, whichever is lower.

    • The NOA must be issued at least 14 calendar days (19 days if mailed) prior to the effective date of the action.

When completing the NOA, contractors are strongly encouraged to include the following statement:

    • You are receiving this NOA to inform you that the amount of maximum child care benefit level for your child’s care is being increased from <insert prior amount of reimbursement> to <insert new reimbursement amount>, effective January 1, 2018, in accordance with new state laws governing regional market rate ceilings. Your provider will be reimbursed up to that ceiling or at their published rate, whichever is less.

  1. Issue a new rate and schedule of services document to the provider consistent with the 5 CCR 18231(c).
Contractors are strongly encouraged to:
  1. Include the Attachment A: Attachment to Notice of Action form letter, located at https://www.cde.ca.gov/sp/cd/ci/documents/attachmenttonoa.doc, to the NOA. This document was written in order to help parents understand that their services are not being reduced in any way, and provide the family with information to appeal the NOA only in the event they believe their reimbursement amount was incorrectly determined.

  2. Notify all other families that will not receive a NOA because the amount of their provider reimbursement has not changed as a result of the revised RMR ceilings. The purpose of this notification is to inform parents about the change in the RMR ceilings consistent with the parental choice provisions in the Code of Federal Regulations, Title 45 sections 98.30 and 98.33. The CDE strongly encourages that the notification include:

    • The URL for the Reimbursement Ceilings for Subsidized Child Care Web page at http://www3.cde.ca.gov/rcscc/;

    • A statement letting parents know they may request a copy of the revised ceilings if they do not have access to the internet;

    • A statement indicating revised ceilings may increase possible choices for providers, possibly decreasing or altogether eliminating a need for copayment; and

    • Contact information for the contracting agency for parents interested in seeking a different type of setting.

This notification may be issued either at the same time as the NOAs are issued, as described above, or shortly thereafter. For contractors’ convenience, the CDE has developed a sample notification to parents not receiving a NOA, located at https://www.cde.ca.gov/sp/cd/ci/documents/nonoa.doc, or contractors may develop their own.

Contractors are reminded of the following:

The California EC Section 8222 provides, in part, that licensed providers may alter their rate sheet once per year by providing both the alternative payment contractor and the resource and referral agency with their updated rate sheets. Contractors should have policies in place as to how and when providers may adjust published rates. Contractors must verify provider rates no less frequently than once a year by randomly selecting 10 percent of licensed child care providers serving subsidized families. The purpose of this verification process is to confirm that rates reported to the alternative payment programs reasonably correspond to those reported to the resource and referral agency and the rates actually charged to nonsubsidized families for equivalent levels of services. Please refer to the EC Section 8222(h).

The 5 CCR, Section 18231(a) and (c) requires contractors to maintain documentation of the service provider’s current fees with information regarding the provider’s usual and customary services provided for those fees, rate sheets submitted by providers, and document(s) the contractor used as a “schedule of payment for approved services that is signed by both the service provider and the contractor” in their files. Further information is available at the CDE MB 12-18 Web page at https://www.cde.ca.gov/sp/cd/ci/mb1218.asp.

A copy of All County Letter Number 17-99, regarding Subject: California Work Opportunities and Responsibility to Kids (CalWORKs) Child Care Programs – Regional Market Rate Ceilings, issued on September 21, 2017 by the California Department of Social Services, contains information on this topic. This letter is available at http://www.cdss.ca.gov/Portals/9/ACL/2017/17-99.pdf.

If you have any questions regarding the information in this MB, please contact your assigned Early Education and Support Field Services Consultant via the CDE Consultant Regional Assignments Web page at https://www.cde.ca.gov/sp/cd/ci/assignments.asp, or by phone at 916-322-6233.

This MB is mandatory only to the extent that it cites a specific statutory or regulatory requirement. Pursuant to the California EC Section 33308.5, any portion of this Management Bulletin that is not supported by a specific statutory or regulatory requirement is not prescriptive.

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Questions:   Early Education and Support Division | 916-322-6233
Last Reviewed: Wednesday, October 18, 2017
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