Child Care and Development Fund, Report to Congress for Fiscal Years 2002 and 2003
PAYMENT RATES
All States reported that they rely on data from a market rate survey to establish rates and to ensure that families who receive child care assistance have equal access to comparable child care services. Twenty-seven States indicated that they cap reimbursement at levels equal to or higher than the 75th percentile of the local market rate. (This means that the State's maximum rates are equal to or more than the price of 75 percent of child care slots in the market.) This compares with 29 States in FY 2000 and FY 2001. While some States have been unable to update their rates in recent years, 81 percent of States reported that rates were updated to reflect the results of the market rate survey within a year of the survey. While there were significant variations among States and rate categories, overall, States increased their maximum reimbursement rates an average of 11 percent between FY 2000-FY 2001 and the FY 2002-FY 2003 Biennial State Plans. The increases frequently were not consistent across types of care and ages of children. The largest overall growth in rates was for the care of preschool children.
Almost all States implemented or plan to implement a tiered reimbursement system whereby providers are paid more if they can demonstrate that they offer higher quality care. In the FY 2002-FY 2003 Biennial State Plans, 29 States indicated they have rate differentials for various levels of quality. An additional 10 States were in various stages of studying or planning for a tiered system of rates.
Limitations on the Use of In-Home Care
States must allow the use of in-home care but may set limits on its use. While 22 States indicated that they do not limit the use of in-home care, 28 States said they do impose limits for financial or quality reasons. Many of the States that impose limits require that a sufficient number of children be in care to ensure that the provider receives a minimum wage. For example, Indiana, Nebraska, Rhode Island, and Wisconsin limit in-home care to families in which three or more children require child care. Other States impose special quality provisions for in-home care, including criminal background checks, training, or both.
Processes With Parents
Eleven States reported that they contract with a community-based voucher management agency to determine eligibility for child care assistance; this compares with 14 in FY 2000 and 9 in FY 1998. Additionally, four States are using the internet to disseminate information about child care subsidies or help families request applications for assistance. Thirty-eight States indicate they allow families to request applications for child care services by mail or telephone. Fourteen of those States allow families to complete the subsidy application by mail or telephone.
Sixteen States allow child care programs that collaborate with Head Start to determine eligibility once a year, at the beginning of the program year, rather than using the more typical 3-6 month eligibility period.
States also have increased their capacity to track and report on complaints against child care programs. Eight States have developed automated systems to track complaints and ensure that staff-and in some cases parents-have access to up-to-date information. States are also establishing toll-free numbers to make it easier for parents to file complaints or request information about complaints against programs or providers.