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| Child
Care Bureau — National Leadership Forum Tiered Reimbursement and Regulation: What Works? State Technical Assistance Teleconference October 6, 1999 |
Facilitator: Louise Stoney, National Child Care Information Center
Notetaker: Sheri Azer, The Center for Career Development in Early Care and Education
This conference call focused on a specific set of questions regarding the implementation of tiered reimbursement/tiered licensing. The presenters were asked not to describe their programs, but to assume that participants had read the descriptions compiled by The Center for Career Development in Early Care and Education (Overview of States with Differential Reimbursement, June 1999) and to focus instead on a more in-depth discussion of implementation issues. Since so much information was shared by the states in their presentations, the notes they prepared to answer the discussion questions were collected. The responses to the questions are compiled below (with some additional editing), as well as information that was imparted during follow-up questions on the teleconference. A summary of the themes that emerged from the discussion is also included.
Florida's goals in establishing tiered reimbursement were to
Wisconsin's goals in establishing tiered reimbursement were to
Oklahoma's goals in establishing tiered reimbursement were to
North Carolina's goals in establishing tiered licensing were to
Florida: Initially there was no higher reimbursement for those providers that achieved higher quality. It was strictly voluntary. The Legislature supported the tiered reimbursement as a response to brain research. The following year, funding was assigned because the Legislature recognized the additional benefits higher quality care could provide. Some providers and others who represent the provider community were involved in setting the standards for tiered reimbursement. Some of those were the Early Childhood Association of Florida (made up of providers), the Department of Education, Head Start, the Florida Association of Child Care Management, the Florida Children's Forum, the Florida Family Day Care Association, and the National Association for Child Development Education.
Wisconsin: Tiered reimbursement was set up in response to welfare reform, the legislature, and the recommendations of an advisory committee.
Oklahoma: Several legislators and DHS Commissioners were familiar with the brain research and the Cost, Quality, and Outcomes in Child Care Centers report and were calling for improvements in quality. The agency director was very impressed with the Abecedarian Project research. Plus there was concern about the availability of care for people moving off welfare. Representatives from the Oklahoma Child Care Association had input on the criteria.
North Carolina: The state involved many others in the process including:
Florida: The tiered reimbursement system is monitored through contracts. Each of the 16 districts in the state oversees contracts with 25 Community Child Care Coordinating (4C) agencies, who in turn have contracts or vouchers with child care providers. The 4C agencies verify eligibility for the Gold Seal and make payments to providers. The State Department of Children and Families issues the Gold Seal certificates. A little over $4.5 million was appropriated for the tiered reimbursement, but of that amount the state does not have the ability to show the total cost for monitoring. The providers who are Gold Seal are paid the same way other providers are paid, but out of a different pot of money. Certain accrediting bodies have been approved for Gold Seal eligibility; they also monitor programs for compliance with accreditation standards.
Wisconsin: The system was designed to be simple. When providers or programs demonstrate that they have achieved accreditation, it is documented in their file and they receive a higher reimbursement rate.
Oklahoma: State child care licensing staff monitor compliance with Stars criteria as they make their three unannounced licensing monitoring visits each year. The Star status also has to be renewed with updated documentation annually. Monitoring the Stars program has not added to costs, but the program was used to help justify adding 38 new licensing staff. Higher reimbursement is funded with TANF transfer funds.
North Carolina: The rated license, like the A/AA licensing system that is being phased out, is monitored by Child Care Consultants from the Regulatory Services Section. (NC has both the regulatory and subsidy functions in one agency, the Division of Child Development.)
Costs associated with the rated license are being paid with a combination of state and federal (CCDF) money, and include:
Other costs to consider when implementing tiered licensing or tiered reimbursement include: costs for a public outreach campaign; increased enrollment in state-sponsored training; increased participation in programs like T.E.A.C.H. (scholarships for training); and funds for quality enhancement grant programs associated with achieving higher standards.
Florida: Florida has 231 Gold Seal centers (approximately 5% of licensed care) and 89 Gold Seal homes that participating in the subsidized child care program. There are more than 900 centers and homes that are accredited in the state, but not all care for subsidized children and would not receive a higher reimbursement rated. Certain segments of the population do not participate because they are not participants of the subsidized child care program. Other reasons are because of the cost and time period involved; it is expensive and time-consuming to become accredited. Providers may also not realize the benefits of accreditation. Florida is not comfortable with the low participation rate and is working to increase the numbers.
Wisconsin: 189 programs are accredited and using the subsidy system, which represent 4% of licensed care. 3,588 children are subsidized and use accredited centers and family child care homes. Over 10% of subsidized children are in accredited programs. Wisconsin only pays a higher rate if the providers charge that rate to parents, and most accredited programs do.
Oklahoma: There are 102 Two-Star centers and 10 Three-Star centers, which represents 6% of all licensed child care centers. In addition, there are 70 Two-Star homes and 2 Three-Star homes, which represent 2% of all licensed family child care providers. The state budgeted for 20% of subsidy children to be in Two-Star facilities and 5% of subsidy children to be in Three-Star facilities (currently 9% of all subsidized children are in programs that receive a higher rate).
The primary reasons that providers are not participating include: the program does not accept subsidized children, or they are family child care home providers and are unwilling to get additional training.
North Carolina: Child care centers were notified in July 1999 that they could begin to apply for the new rated license. Eight hundred centers requested application packets and about 60 have actually applied as of October 1999. Homes will be able to apply rated licenses beginning in January 2000.
Under the old A/AA tiered license system, there has been good participation. As of May 1999, 1,198 centers (or 31% of centers) had AA licenses, and 30% of children in regulated care were in AA centers. There is a lot of variance by county; those counties that have had Smart Start for five years have facility participation rates averaging 44%, while those counties that just got Smart Start have participation rates around 20%. In smaller counties, AA license achievement ranges from 0-100%.
For the development of fiscal projections for the rated license, it was assumed that all the centers that are now AA (or about 1/3) would strive for ratings of three-star or higher. It is expected that a breakdown would resemble a bell curve.
Under the old A/AA system, family child care homes did not have a higher set of standards and higher reimbursement rates to strive for, but the rated license will extend that opportunity in just a few months.
Other segments of the provider community have participated. For example, quite a few Head Start centers have applied for AA licenses, and it is expected many of them will apply for 3-5 star licenses. A number of religious-sponsored facilities have also participated. It is expected that the rated license will provide a large incentive for centers and homes exempt from licensing (like religious-sponsored and part-day school-age programs) to voluntarily become licensed due to the financial incentives and the prestige associated with having a license with multiple stars.
North Carolina does not have a specific benchmark in mind for the rated license, but the Division of Child Development has had an agency objective to improve the quality of care by increasing by a certain percentage the number of centers that reach higher standards.
Florida: Florida continues to see a rise in child care facilities that are actively pursuing accreditation. The state does not have the ability to show by what percentage Florida has increased the number of low-income children in higher quality centers, but they do have an indication that program quality has improved because the number of providers that have achieved accreditation continues to grow.
Wisconsin: In 1992, there were 30 accredited programs; in 1999, there are 195 accredited programs. They believe that accreditation growth has been due to three factors:
Oklahoma: Oklahoma has not seen an increase in the number of accredited programs because the program is so new, however there has been a significant increase in participation in training. Participation in the statewide training program tripled in the year Stars was implemented and 1500 tuition and 342 credential scholarships have been awarded. The state is about to launch an accreditation support project and the Three-Star program just went into effect in July of 1999. They also have some indicators of quality improvement: one study showed slightly higher scores on ECERS and other rating scales for Two-Star facilities and significantly higher scores for Three-Star facilities.
North Carolina: It is too early to say with the rated license, because it is so new. NC will eventually have this information through the assessment of facilities for the 3-5 star rated license. Child care centers and homes that do well on their ITERS, ECERS, FDCRS, or SACERS environmental rating scales will by definition have high quality.
Florida: Initially, the Gold Seal program was not linked to tiered reimbursement. It was effective because of the recognition factor and was a good marketing tool for providers. Florida would advise other states considering developing and implementing a tiered reimbursement system to include providers that would be affected in a work group/task force charged with the responsibility for developing and implementing the policy.
Wisconsin: It is important to think about whether or not the state should reimburse at rates higher than the price charged by the provider.
Oklahoma: States need to realize how important it is to build an infrastructure to support the program, i.e., provider resources (grants, scholarships, technical assistance) to meet criteria; policies that detail withdrawal of status, appeals, etc.; and a public awareness campaign to promote the program.
North Carolina: The state feels it is probably too early to say much about the implementation of the rated license, but in terms of getting support and building a strong framework for quality, they advise:
In North Carolina, what was the rationale for switching to more levels (from 2 to 5)?
Two levels of quality did not indicate subtleties in quality. It was politically hard to set one high level as high as it could go. We wanted to give parents more information about the range of quality in child care programs.
In using accreditation as the highest level, has anyone established criteria?
Oklahoma has developed a set of criteria and has an approval process. OK has approved five accrediting systems. Florida has criteria too-the accreditation must meet or exceed NAEYC standards. FL has approved six systems. Wisconsin uses NAEYC, the SAC accreditation, and allows family child care providers to be accredited by NAFCC or achieve the CDA credential. WI has not had any pressure to include more accreditation systems.
Are there any increases in cost?
Oklahoma spends about $200,000 per month in subsidy payments to Two- and Three-Star facilities-about $5 million per year. The Stars program only adds 10 minutes more to licensing visits.
Wisconsin implemented the system when there were almost no accredited programs in the state. They don=t have good data on increased cost of subsidies. There are no additional administrative costs.
Florida has had no additional administrative costs. The $4.5 million increase in subsidies included funds for all costs of the Gold Seal program.
Is phasing in the system important? Please reflectYwhy is participation low? Is it because this is new and needs time?
Oklahoma-it takes time . to be meaningful. In a poll, 51% of centers told us that they expected to be Two-Star. This is unrealistic. People are getting training at night and there is turnover. The Stars program is only one-and-a-half years old.
Is providing technical assistance to programs important?
North Carolina-Smart Start played a big role. It provided quality enhancement grants and technical assistance. The licensing consultants also provide TA and they did dry runs of the rating scale with programs. Yes, it is very important.
Oklahoma-We agree. We are starting an accreditation support project this month. It will provide consultation and financial assistance to programs pursuing accreditation.
Please address staff turnover?
North Carolina-We are very concerned about turnover. A new law was passed that requires all lead teachers to get the NC Early Childhood Credential. We already have TEACH scholarships and the WAGE$ supplement program in place. In spring 1999, WAGE$ was expanded to serve more areas of the state, and a partially state-supported health insurance program for child care staff was introduced. The new initiative with these two components, known collectively as NC Cares (committed to attracting and retaining educated staff), will further the progress NC has made to lower staff turnover.
In reviewing the notes from the teleconference, several themes emerge. They are summarized below.
Typical state goals in establishing tiered reimbursement
Participation levels of centers and homes in tiered reimbursement program
Reasons providers are not participating
Results that have been achieved
Overarching issues and advice from states
| The document is for informational purposes only. No official endorsement of any practice, publication, program, or individual by the U.S. Department of Health and Human Services, the Administration for Children and Families, the Child Care Bureau, or the National Child Care Information Center is intended or is to be inferred. For additional information on this or related topics, please contact the National Child Care Information Center at (800) 616-2242 or info@nccic.org. |
