Management Bulletin 22-01

Early Education Division

Subject: Rate Reform Implementation Guidance - REVISED

Number: 22-01

Date: January 28, 2022

Expires: Until Rescinded

Authority: Assembly Bill (AB) 131 (Chapter 116, Statutes of 2021); Senate Bill (SB) 168 (Chapter 261, Statutes of 2021)

Attention: Executive Directors and Program Directors of all California State Preschool Programs

<begin add> Note: This MB revises and replaces MB 21-15. For ease in determining what has been revised from MB 21-15, all new text can be seen in bold italic font with difference marking around the additions that reads <begin add> and <end add>. Any deletions can be found as bold italic font that is struck through, also with difference marking around the deletions that read <begin delete> and <end delete>.

All changes/additions found in this MB supersede the guidance found in MB 21-15 <end add>

Purpose

This <begin add> REVISED <end add> Management Bulletin (MB) is to notify and provide guidance to California State Preschool Programs (CSPP) on the first stage of rate reform that will be implemented January 1, 2022.

Policy

Pursuant to Education Code (EC) Section 8242(c), beginning January 1, 2022, CSPP will be reimbursed at the greater of the following:

(1) The 75th percentile of the 2018 Regional Market Rate (RMR) survey; or

(2) The contract per-child reimbursement amount as of December 31, 2021.

Throughout this MB, the rate resulting from this comparison is referred to as the “contract rate”. This MB includes part-time and full-time contract rates that contractors must use beginning January 1, 2022.

The full-time contract rate is the basis of reimbursement for children certified for full-time services. The part-time contract rate is the basis of reimbursement for children certified for part-time services. The basis for utilizing the full-time and part-time daily equivalent rate is determined by the total weekly certified hours included on the child’s certified schedule for the entire 12-month eligibility period, and no longer based on the number of hours certified for each day.

For contractors where the 75th percentile of the 2018 RMR survey is higher than the contract per-child reimbursement amount as of December 31, 2021, the California Department of Education (CDE) has created a daily equivalent rate for contractors to use, which can be found in the document titled California State Preschool Program Contract Rates by Service County, Attachment B. The CDE has created this daily equivalent rate from the Preschool part time and full time monthly RMR for ease of implementation and reporting.

Contractors with rates that are changing will receive an allocation letter amendment from the CDE Contracts Office.

Contractors who have a contract per-child reimbursement amount on December 31, 2021, that is higher than the 75th percentile of the 2018 RMR survey, will continue to receive the higher contract rate.

Directives for Implementation

This MB includes the following:

• Rate Reform Implementation Guidance (Attachment A)
  • Accessible, Section 508 Compliant Version: http://www.cde.ca.gov/sp/cd/ci/documents/implementguide508.docx
  • Non-Section 508 Compliant Version: http://www.cde.ca.gov/sp/cd/ci/documents/implementguide.docx
• California State Preschool Program Contract Rates by Service County (Attachment B)
  • CSPP Contract Rates: https://www.cde.ca.gov/fg/aa/cd/documents/csppcontractrateattb.xlsx

Attachment A has the force and effect of law pursuant to AB 168, Chapter 261 of the Statutes of 2021, Section 4. For ease of reference, it has been denoted with Article and section numbers consistent with proposed Title 5 California State Preschool regulations.

Implementation for all CSPP Contractors

Reimbursement requirements, including implementation for adjustment factors, for all CSPP contractors (including Family Child Care Home Education Network [FCCHEN] contractors) are contained in Attachment A, sections 17835-17838.

Full-time reimbursement must be used for all children with certified schedules of 30 hours total or more per week. Part-time reimbursement must be used for all children with certified schedules of less than 30 hours total per week. Pursuant to changes in EC, contractors serving children that are, prior to January 1, using the three-quarter time adjustment factor must determine whether those children fall into part-time or full-time as of January 1.

CSPP contractors that operate in multiple service counties will be reimbursed for and will report enrollment based on the service county in which the child receives services.

Reimbursement for FCCHEN providers

Specific requirements for contractors’ reimbursement of Family Child Care Home (FCCH) providers operating through a FCCHEN are contained in Attachment A, sections 17840-17843.

Contractor Reimbursement and Reporting Requirements

CSPP contract rates effective January 1, 2022 are provided in Attachment B.

As described above, in order to implement EC Section 8242(c) and streamline reporting, contractors will utilize a calculated daily equivalent rate. The daily equivalent rate is based on the greater of the preschool monthly RMR at the 75th percentile of the 2018 survey or contractors’ contract per-child reimbursement amount as of December 31, 2021. The monthly (both part-time and full-time) rates and their daily equivalents can be found in Attachment B.

Contract rates will continue to be a term of the CSPP contract; however, contractors may have multiple contract rates if they operate in multiple service counties. Rates will be specific to the county in which services are provided to certified children. Both full and part-time rates by county, as well as the applicable part-time adjustment factor, can be found in Attachment B, California State Preschool Program Contract Rates by Service County https://www.cde.ca.gov/fg/aa/cd/documents/csppcontractrateattb.xlsx.

Reporting Updates for Contractors That Provide Services in Multiple Counties

Effective January 1, 2022, reimbursement will be based on the county in which preschool services are provided. As such, contractors must report enrollment for each service county in which services are provided. This will ensure that the Early Education and Nutrition Fiscal Services (EENFS) office can reimburse contractors accurately.

<begin delete> The Child Development Provider Accounting Reporting Information System (CPARIS) will be updated in January 2022 to allow contractors to report enrollment by service county. Income and expenditure reporting will not be impacted by this change and will continue to be reported at the contract, not service county, level. <end delete>

<begin add> The Child Development Provider Accounting Reporting Information System (CPARIS) will be updated in February 2022 to allow contractors to report enrollment by service county. Income and expenditure reporting will not be impacted by this change and will continue to be reported at the contract, not service county, level. <end add>

Changes to Time-Base Categories

The following time-base categories will exist as of January 1, 2022: part-time and full-time. Effective January 1, 2022, the three-quarter-time category has been stricken from EC and is no longer applicable. In addition to these time-base categories, contractors who have children certified for full-time services who receive more than 10.5 hours on any individual day will receive an adjustment factor for those days (see Section 17837 of Attachment A).

Contractors must now report all children with a certified schedule of less than 30 hours total per week as part-time and all children with a certified schedule of 30 hours or more per week as full-time. The child’s certified enrollment is based on the number of hours per week the child is enrolled; however, enrollment will continue to be reported for each day the child is enrolled.

If a child is certified for full-time service and for any individual day the child is enrolled more than 10.5 hours, the child must be reported as full-time plus on that day.

Reporting Example of Child’s Weekly Full-Time Enrollment

If a child is certified to receive services Monday through Thursday for 8 hours per day, and on Friday for 3 hours, totaling 35 hours per week, the child should be reported within the full-time rate category. The contractor must report the child’s enrollment for all 5 days of the week as full-time child days of enrollment, because the child’s total enrollment for the week is 30 hours or more.

Number of Hours Child is Certified:

How to Report Enrollment on Enrollment, Attendance and Fiscal Report:

Reporting Example of Child’s Weekly Part-Time Enrollment

If a child is certified to receive services Monday, Tuesday, Wednesday and Friday for 5 hours per day, and on Thursday for 8 hours, totaling 28 hours per week, the child should be reported within the part-time rate category. The contractor must report the child’s enrollment for all 5 days of the week as part-time child days of enrollment, because the child’s total enrollment for the week is less than 30 hours.

Number of Hours Child is Certified:

How to Report Enrollment on Enrollment, Attendance and Fiscal Report:

<begin add>REVISED:<end add> Reporting Example of Child Enrolled Mid-Month

<begin delete> If a child is certified to receive services mid-month, resulting in less than 30 hours of services in the first week of enrollment, the child will be reported as part-time for the first week of enrollment. For example, if a child is enrolled for two eight-hour days in week one, the child’s total certified hours of care is 16 hours. For week one, the child will be reported as part-time. If in subsequent weeks the child is enrolled Monday through Friday for eight hours per day, the child will be reported as full-time for those weeks. <end delete>

<begin add>REVISED: In instances where a child is enrolled mid-month, contractors should use the child’s certified schedule based on a full week of services to determine whether the child is deemed as a part-time (less than 30 hours per week) or full-time (30 hours per week or more) enrollment. Children enrolled mid-month shall be reported based on their certified schedule (encompassing one full week of services) beginning with their first day of enrollment. For example, if a child is certified 8 hours per day and five days per week, which results in a full-time schedule, and enrolled beginning on a Thursday, the child will be reported as full-time beginning on Thursday. <end add>

Number of Hours Child is Certified:

<begin add>REVISED:<end add> How to Report Enrollment on Enrollment, Attendance and Fiscal Report:

Reporting Example of Child’s Full-Time-Plus Enrollment

Children receiving full-time reimbursement and certified for ten and a half (10.5) hours per day or more will continue to be reported as full-time plus on the specific days in which they receive services for 10.5 hours or more. For example, if a child is certified to receive services for 10.5 hours two days per week, and eight hours three days per week, a monthly report incorporating four weeks and 20 days would indicate eight (8) full-time-plus child days of enrollment and twelve (12) full-time child days of enrollment.

Number of Hours Child is Certified:

How to Report Enrollment on Enrollment, Attendance and Fiscal Report:

Reporting Provider Payments

CSPP contractors with children enrolled in a FCCHEN must report the sum of provider payments within CPARIS. This information should be reported in the Reimbursable Expenses section, on the Direct Payments to Providers (FCCH only) line.

Background and Authority

The AB 131 amended EC section 8242, which requires that as of January 1, 2022, CSPP contractors will be reimbursed at the greater of the following:

(1) The 75th percentile of the 2018 regional market rate survey; or

(2) The contract per-child reimbursement amount as of December 31, 2021.

AB 131 also requires that multiple working groups are established to better understand rate reform and the impacts on quality. The state and Child Care Providers United (CCPU) - California are required to establish a Joint Labor Management Committee (JLMC) to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children. The California Department of Social Services (CDSS) is required to secure a contractor, in consultation with the JLMC, to assist with the work to be completed. The JLMC is required to develop the recommendations for a single reimbursement rate system no later than November 15, 2022, to inform the Governor’s proposed budget for the 2023–24 fiscal year, which will be presented to the Legislature by January 10, 2023.

Further, the CDSS, in consultation with the CDE, is required to convene a working group separate from the JLMC to assess the methodology for establishing reimbursement rates and the existing quality standards for child care and development and preschool programs, including, but not limited to, licensing standards and program quality standards in Title 5 of the California Code of Regulations, for equity and accessibility to all provider types and settings. No later than August 15, 2022, the working group is tasked with providing recommendations, including, but not limited to, recommendations on how to define child care workforce competencies and how these competencies would align with rate reform.

Section 4 of SB 168 (Chapter 261 of the Statutes of 2021) authorizes the CDE to provide guidance and instruction to implement rate reform through an MB, notwithstanding the Administrative Procedures Act, on or before December 31, 2021.

SB 168 also directs the CDE and the California Department of Social Services to examine the impact of time-based and special criteria adjustment factors on center-based contractors. The bill authorizes the state to make changes to time-base and special criteria adjustment factors that supersede statute, pursuant to approval from the Joint Legislative Budget Committee.

Upon analysis of data and in keeping with the directive of law, the state has determined that changes are needed to the time-base and special criteria adjustment factors and has notified the Joint Legislative Budget Committee of these changes in writing. The Joint Legislative Budget Committee approved this plan on December 1, 2021, and the attached guidance reflects this approved plan. As such, CDE has included guidance for the approved time-base and special criteria adjustment factors in this MB. The guidance in this MB has the full force and effect of law.

Pursuant to SB 168, the CDE is required to initiate a rulemaking action no later than December 31, 2023, which will supersede this guidance.

Resources

If you have programmatic questions regarding the information in this MB, please contact your assigned EED Program Quality Implementation (PQI) office Regional Consultant. The CDE, EED Consultant Regional Assignments directory web page can be located at https://www.cde.ca.gov/sp/cd/ci/assignments.asp.

If you have fiscal questions regarding the information in this MB, please contact your assigned EENFS fiscal apportionment analyst. The EENFS fiscal analyst directory web page can be located at https://www.cde.ca.gov/fg/aa/cd/faad.asp.

The CDE, EED has developed a COVID-19 pandemic guidance and resource web page that includes answers to frequently asked questions, all MBs issued to implement pertinent legislation, and other relevant resources at https://www.cde.ca.gov/sp/cd/re/elcdcovid19.asp.

To be informed of updated information, please sign up for ELCD’s email distribution list by visiting the web page at https://www.cde.ca.gov/sp/cd/ci/progspeclist.asp.

For more information about California Department of Social Services (CDSS) Community Care Licensing Division (CCLD), which provides guidance on social and physical distancing, ratio and group sizes, and healthy practices during the COVID-19 pandemic, please visit their website at https://www.cdss.ca.gov/inforesources/community-care-licensing.

For the California Department of Public Health's (CDPH) COVID-19 guidance for childcare providers and programs, visit the CDPH web page at https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Child-Care-Guidance.aspx [Link no longer available]

For information about federal and state guidance and response to the COVID-19 pandemic, please refer to the Centers for Disease Control and Prevention (CDC) web page at https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/index.html, the California Department of Public Health’s web page at https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx [Link no longer available], and the California COVID-19 Response website at https://covid19.ca.gov/.

For information about COVID-19 guidance from the Office of Head Start, please visit their web page at https://eclkc.ohs.acf.hhs.gov/about-us/coronavirus/ohs-covid-19-updates [Link no longer available].

________________________________
Stephen Propheter, Director
Early Education Division