Relating to child care reimbursement rates under the state child care assistance program

Sponsored by the House Human Resources Committee

Topics:Health care Child care

Same legislation: HSB 2

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Official bill page Lobbyist declarations One-pager to print

Where it is now

Done: IntroducedJanuary 12, 2021
Done: SubcommitteeJanuary 12, 2021
Done: House committeeJanuary 27, 2021
Done: Passes the HouseFebruary 10, 202190–4
Stopped: Senate committeeDied when the General Assembly ended
Next: Passes the Senate
Next: To the Governor
Next: Signed into law

Died when the session ended The 2022 session adjourned on May 24, 2022, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?

What’s in it

AI summary The state will increase payments to child care providers who receive too little money through the child care assistance program. These providers will now be paid at the middle level of what recent market surveys show is a standard rate. The department will also adjust bonus payments for quality ratings to match these higher rates.¹

Read the official explanation

This bill provides that effective July 1, 2021, for child care providers reimbursed under the state child care assistance program, the department of human services shall set the reimbursement rates of those providers for whom the reimbursement rate is below such percentile at the 50th percentile of the most recent market rate survey completed prior to July 1, 2021. The department shall also adjust quality rating system bonuses to reflect the increased child care provider reimbursement rates as appropriate.

Full bill text²

Senate subcommittee

Named February 17, 2021. It hasn’t reported yet.

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Fiscal note

Cost: up to $954,000 Compare with other bills

AI summary This bill directs the Department of Human Services to increase reimbursement rates for certain child care providers to reach the 50th percentile of market rates and adjust rates for those in the Quality Rating System. It is estimated to increase expenditures for the Child Care Assistance Program by $13.4 million in fiscal year 2022. This increase will be distributed among Licensed Child Care Centers, registered Child Development Home C providers, and nonregistered Child Care Homes with provider agreements.³

Read the fiscal note

Description

House File 292 directs the Department of Human Services (DHS) to increase provider reimbursement rates for the Child Care Assistance (CCA) Program for any provider below the 50th percentile of the most recently completed market rate survey (2017 Market Rate Survey) to that level. The DHS is also directed to adjust reimbursement rates for providers participating in the voluntary Quality Rating System (QRS) to maintain the participation incentive.

Background

Child Care Assistance provider reimbursement rates vary by the following characteristics:

Provider type: Licensed Child Care Center, registered Child Development Home (A or B, and C), and nonregistered Child Care Home with a CCA provider agreement.
Age of the child served: Infant/toddler, preschool, and school-aged.
Participation in the QRS: Basic rate (nonparticipation), QRS Level 1 or 2, QRS Level 3 or 4, and QRS Level 5.
There are also different reimbursement rates for children with special needs. This brings the total number of rate cells to 39, excluding special needs care, as nonregistered Child Care Homes do not participate in the QRS. Rates were last increased effective January 1, 2019, moving some providers from as low as the 10th or 15th percentile up to the 35th and 40th percentiles for the basic (non-QRS participating) provider rates.1 Rates for providers at QRS Level 5 (the highest) are set at the 75th percentile. The current forecast for available funding and total expenditures is available in this Fiscal Update Article.

Assumptions

Basic rates would increase for eight rate cells that reimburse Licensed Child Care Centers, registered Child Development Home C providers, and nonregistered Child Care Homes that have a provider agreement with the DHS to participate in the CCA Program. The average increase of the units of service is $2.41 over the eight cells increased. The DHS estimates an approximate increase of $6.4 million in annual costs for the basic rate reimbursements.
Six QRS rates for Levels 1 and 2 would increase for Child Care Centers and Child Development Home C providers. The average increase of the units of service is $1.33 over the six cells increased. The DHS estimates an approximate increase of $2.7 million in annual costs for the QRS Levels 1 and 2 rate reimbursements.
Six QRS rates for Levels 3 and 4 would increase for Child Care Centers and Child Development Home C providers. The average increase of the units of service is $1.22 over 1 2018 Iowa Acts, ch. 1165, §42 (Health and Human Services Appropriations Act). the six cells increased. The DHS estimates an approximate increase of $3.7 million in annual costs for the QRS 3-4 rate reimbursements.
Five QRS rates for Level 5 would increase for Child Care Centers and Child Development Home C providers. The average increase of the units of service is $0.87 over the five cells increased. The DHS estimates an approximate increase of $500,000 in annual costs for the QRS Level 5 rate reimbursements.
As of January 2021, 24,000 children were served by the CCA Program on a monthly basis.
The average child eligible for the Program receives eight units of service per week. A unit of service is up to 5 hours in a 24-hour period.
Of the children receiving services, 17,000 were served at rates that would be increased by the Bill.

Fiscal Impact

House File 292 would increase expenditures for the Child Care Assistance Program by an estimated $13.4 million in FY 2022. Of this amount, the estimate is anticipated to be distributed by provider type as follows:

Licensed Child Care Centers: $11.8 million
Registered Child Development Home C providers: $592,000
Nonregistered Child Care Homes that have a provider agreement with the DHS to participate in the CCA Program: $954,000

This amount will fluctuate annually thereafter based on trends in enrollment and costs per case utilization.

There is a sufficient balance of federal funds projected to be carried forward at the end of FY 2021 and FY 2022 to not require an increase from the General Fund appropriation in FY 2022 or FY 2023 for the rate increase proposed under the Bill.

Source

Department of Human Services

Child Care Provider Rates · February 1, 2021 · $954,000

Reading a fiscal note⁴

Lobbying

20 for · 0 against · 13 undecided · Who →

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Tried before

HF 2270Passed a chamber88th GA HF 2067Didn’t advance88th GA

Study bill

HSB 2Renumbered

89th General Assembly

HF 292Passed a chamberfrom HSB 2

Earlier and later bills are matched by wording or an identical title.

Tried before

This idea has been filed in an earlier General Assembly. None became law, though one got through a chamber.

HF 2270 Relating to child care reimbursement rates under the state child care assistance program
88th General Assembly · Passed House · same title
Passed a chamber
HF 2067 Relating to child care reimbursement rates under the state child care assistance program
88th General Assembly · Withdrawn · very similar
Didn’t advance

Matched by wording or an identical title.