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EEC FINANCIAL ASSISTANCE REGULATIONS AND POLICIES

January 2011

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EEC Financial Assistance Program Governance

EEC’s Financial Assistance Program is governed by federal and state laws and policies:

The Child Care and Development Block Grant Act (42 USC 9858), as amended, and section 418 of the Social Security Act (42 USC 618), as amended

Federal Regulations -- 45 CFR Parts 98 and 99

Federal Policies, Program Instructions and Other Guidance:(http://www.acf.hhs.gov/programs/ccb/law/index.htm#guidance)

EEC Subsidy Regulations -- 606 CMR 10.00 et al

EEC Policies -- EEC Financial Assistance Guide

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EEC Financial Assistance Regulations and Polices

• EEC Subsidy Regulations last updated in November 2006

• Policy Guide developed and released in July 2007

• “Question and Answer” document added to the Guide in 2008,

• Several updates issued through EEC Management Bulletins (EMBs) and email messages from the Commissioner reflecting new or edited policies and instruction for providers to “reprint” selected chapters.

• Access limitations to Income Eligible financial assistance (November 3, 2008), Access opening last fiscal year have resulted in a number of other EMBs and memos to clarify and revise policies.

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Financial Assistance – Table of Contents for both EEC Regulations and Policy Guide

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EEC Financial Assistance Regulations and Policies

Many factors contribute to the need to update the Guide and Amend the Regulations including: Improper Authorizations for Payment (IAP)

exercise results Response from ACF regarding our State Plan Unique challenges/ weaknesses identified due

to recent fiscal constraints/ system restructuring• (e.g., ongoing closure of, or limited access

to, EEC financial assistance and CPC transition)

Capability to monitor programs’ determination of financial assistance eligibility (fraud/waste/abuse)

Recent GAO Report Identified Fraud, Waste and Abuse findings in Head Start programs

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User Feedback

As EEC providers, CCR&Rs and internal staff have used the Guide, issues have been identified, including: Ability to update and communicate changed or new

policies Structure of and clarity of policy information Documentation of eligibility requirements Outdated, confusing policies Existing policies outside of the Guide (recently added as

“appendices”) Missing policies Ease of finding needed information

CCR&R and Provider Feedback Confirms need to improve Financial Assistance Polices,

including the Request for Review process, Recoupment procedure, and Documentation requirements

Raises other concerns regarding improving Communication (w/ EEC, DTA and DCF staff)

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Status of policy updates requested

Quick Fixes – Policies Updated Long Term Fixes – Regulation Changes or Data Exchanges Needed

Break in service need of parent

Eligibility self reporting “significant changes” in income (20% rule)

Travel time for calculation of service need

Waitlist management enhancements

Redraft Provider voucher manual and agreement (Jan roll out)

Identity/ legal immigration status documentation

Codified Variance Process

Special Need Forms (Child/Parent)

Self Employment Verification

Special Need Access Regulations

Streamline Review Process

Child Support Requirement

Second parent in Household

Clarify Recoupment Process

Redraft Financial Assistance agreement/ termination notices

Excessive Absences of Children

Schedule of Care

Interfaces with other agencies: RMV, DOR (wage matches) or other agency systems

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Key

= Policy issue reviewed and updated = Policy issue reviewed and requires regulation change to update

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Highlights of Proposed Regulation Changes

While many of the issues identified to date have been addressed by revising the Policy Manual, and improving the process for updating policies, some revisions are necessary to EEC’s Financial Assistance regulations, including:

Redefine Special needs of parent/ child

Reduce Allowable Absences

Streamline Review Process and recoupment process

Redefine Self Employment

Allow for eligibility verifications through inter-agency data matches

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Summary of Proposed Changes to Subsidy

Regulations

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10.02: Definitions: The addition of new or revised definitions are needed to aid in the interpretation of the regulations.

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• Family Size and Household Composition (codifies existing practice)

o Clarifies verification of household members is necessary for purposes of determining eligibility and establishing parent fees.

• Identity, Residency & Citizenship Status (codifies existing practice)

o Requires verification of applicant’s identity and residency, as well as the citizenship or immigration status of each child seeking child care financial assistance.

• Child Support Enforcement Requirement (new)

o Requires single parent applicants to submit evidence of child support and/or cooperation with the Commonwealth’s Child Support Enforcement agency, as a condition of eligibility.

• Child Attendance/ Reimbursment Requirements (amends current requirements)

o Requires children to regularly attend early education and care programs subsidized by the Commonwealth or risk termination

10.03(1): General Provisions, Eligibility

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Identity, Residency & Citizenship Status

• EEC seeks to formally codify the Citizenship and Immigration Status policy issued in April 2010, in order to:

o Address the deficiency in EEC’s regulations and policies identified by ACF the 2008-2009 Federal Improper Authorization for Payment review

Massachusetts, along with all other Year 2 States, were given a one time exemption to implement this requirement

o Achieve consistency between regulations and policies and to ensure efficient and uniform outcomes for families

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Child Support Enforcement Requirement

• EEC proposes a requirement to mandate “cooperation” with the MA Child Support Enforcement (CSE) agency OR other proof of child support as a condition for child care assistance for single parent families

• At least 20 States currently impose a CSE requirement

• Benefits of instituting a Child Support Enforcement policy:

o Keep families out of povertyo Provide adequate food, shelter and clothingo Increased access to medical services & sense of securityo Add to the overall stability, security and well-being of

families and childreno Intended to lessen the existing burdens of second parent

in the household documentation

• Key issues to consider during implementation of policy:

o How many families seeking assistance are currently enrolled – avoid duplication

o Identify exceptions (i.e., domestic violence or child protection)

o Required documentationo Monitoring and evaluation of effectiveness

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Strengthen Child Attendance Requirement

• Current Regulatory Definitions, 606 CMR 10.02:

o Excessive absence = more than 3 consecutive unexplained absences or 11 or more explained absences w/in a 30 day period.

o Explained absences = any absence due to illness, emergency, or max. of 10 days vacation/ year.

• EEC’s regulations related to absences give rise to potential abuse/waste. EEC’s annual billing for FY08-10 shows:

o Average annual billing by the CCR&Rs - $18.5Mo Average annual billing by contract providers - $18.5Mo Over each of past 3 years, providers have billed EEC for

over $37M related to absent dayso Absence rates for some children approach 50%o Providers acknowledge billing for “regularly scheduled”

absences, such as families that only need 4 days/week

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Strengthening Child Attendance Requirement

• In preparing its recommendations, EEC reviewed research which shows that chronic absenteeism in the early years, such as kindergarten, predicted continuing absences in later grades.

• In addition, we looked at other states to identify best practice:

o Ohio – limits absences to 10 in 6 monthso Maryland – limits absences to 60 in 12 monthso Delaware – limits absences to 5 per month

• MA public schools limit absences to 7 in 6 months

• These examples have ramifications on both families (termination) and providers (billing) giving incentive for proper use of funds and encouraging attendance/ good outcomes for children

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Strengthening Child Attendance Requirement

• Options for implementation – excused absences:

Limit absences to 5 per month Limit absences to 15 per 3 months Limit absences to 30 per 6 months* Limit absences to 60 per 12 months Limit absences to 7 in 6 months, in

accordance with ESE policies

*The Recommendation above reflects an average of 5 absences per month enforced over a 6 month period.

• EEC does not propose any changes related to the definition of “excessive” absence.

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• Special Needs (Protective Services) (amends current requirements)

o New definition of protective services to include parents and children with documented disability and/or special need.

o Eliminates child with special need as a single service need.

• Limitations on Self-Employment (amends current requirements)

o Imposes restrictions on certain work-related service need activities, in particular “at home” self-employment

o Changes methodology for calculating service need – total earnings divided by minimum wage to establish amount of care needed.

• Travel Time (codifies existing practice)

o Requires applicants to present a minimum of 20 hours of service need before allowing travel time to be factored in.

Amendments to Financial & Service Need Eligibility Criteria, 606 CMR 10.04(1)

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In order to be eligible for CCDF-funded child care services, children must:

Reside with a family whose income does not exceed 85% of SMI; and

Reside with parent(s) who are working, or participating in job training or an education program, or are receiving or need to receive protective services.

Special Needs – Protective Services

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In reviewing the MA CCDF State Plan, ACF identified two instances where EEC regulations and policy may not align with these mandatory requirements:

Children with Special Needs – 1) allowing children to remain in care up to 100% SMI and 2) allowing a categorical waiver of the work, education and training requirement for families w/ children with special needs.

See 606 CMR 10.04(1)(a)1 and (b)

Parents with Special Needs – 1) allowing children to remain in care up to 100% of SMI, and 2) not clearly defining such families “in need of protective services.”

See 606 CMR 10.04(1)(a)1

Special Needs – Protective Services

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CCDF regulations do allow states some flexibility for families receiving or at risk of receiving protective services:

Children residing in a family that is receiving or needs to receive protective intervention services may be eligible for CCDF-funded child care, if they remain in the home, even if the parent(s) is not working or in an education or training program. See 45 CFR 98.20(a)(3)(ii).

Additionally, states have the discretion to waive the 85% SMI limitation if a child is residing in a family that is receiving or needs to receive protective intervention services if determined necessary on a case by case basis. See 45 CFR 98.20(a)(3)(ii)(A)

Special Needs – Protective Services

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Special Needs of Children– Protective Services

Current practice:• Parents are not required to engage in work, education

and/or training activities• Families may enter care at 85% SMI and exit at 100%• Children are eligible for full-time care regardless of need

Issues:

• Exemption was originally based on assumption special needs children are “educationally at risk”• Misaligned with federal exemption definition of “in need

of protective services”• Research based risk factors show that ALL low-income

children are “educationally at risk”

• Streamlining and coordinating resources:• Other agencies are charged with providing services to

special needs children -- ESE (IEP) or DPH (IFSP)• EEC should support ESE and/or DPH with wrap-around

services, for otherwise eligible children

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Special Needs of Children – Protective Services

Proposed change:• Align EEC regulations with Federal regulations and

require parents of children with special needs must participate in work, education or training

No Change:• Families will continue remain eligible at the 85%/100%

income levels• Eligible children may continue to qualify for full-time

care, regardless of their parents service need• EEC will continue to work with other state agencies to

provide the necessary wrap around support for eligible children

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The Department has identified the following concerns when reviewing its child care subsidy regulations and policies and makes the following findings/observations – for Parents:

• In practice, “special need of parent” definition misaligned with federal “in need of protective services” intention.• Examples identified through central office review:

headaches, backaches, carpal tunnel syndrome.

• Data shows inordinate number of special need of parent service needs approvals in contract slots

• Special need of parent service need currently approved for indefinite time period irrespective of the stated need

• Federal laws prohibit use of CCDF funding for respite care

Special Needs of Parents – Protective Services

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Special Needs of Parents– Protective Services

• EEC will seek to amend current policies related to Child Care Financial Assistance eligibility requirements for families with special needs Parents to:

Only allow for new access through vouchers

Heighten the bar on what is deemed “at risk of needing protective service”

Only allow these to be short term vouchers 12 months, renewable once– with the intended purpose of helping to serve as a bridge while parents seek other resources to address the “protective service” issue and/or become employable.

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States are required to define “protective services” in the CCDF State Plan, if they choose to fund services to this population. See 45 CFR 98.16(e)(7)

Currently, Massachusetts defines “protective services” as:

“Families are eligible for supportive child care services when they have active protective needs documented in a supported report of abuse or neglect within the previous 12 months or when there is a determination of need to begin or continue supportive child care at a Department of Children and Families Progress Supervisory Review.”

Proposed definition:

“Families, who have active protective needs documented in a supported report of abuse or neglect within the previous 12 months or when there is a determination of need to begin or continue supportive child care at a Department of Children and Families Progress Supervisory Review, will be deemed to be in need of protective services. Additionally, children may be deemed at risk of needing protective services in special circumstances, wherein families are unable to provide child care for any portion of a 24 hour day due to a crisis situation of domestic violence or homelessness, a physical, mental, emotional or medical condition, or participation in a drug treatment or drug rehabilitation program, or court-ordered community service.”

Special Needs – Protective Services

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Limitations on Self-Employment

• EEC proposes to limit the types of work-related activities that satisfy the service need requirement:

1. No home-based self-employment, unless the work performed:

• creates a clear and present danger to children• requires regular face-to-face meetings or

appointments with clients, which prevents direct supervision of children

2. Propose a launch/grace period for new self-employment business – 3 month start up

3. Implement new mechanism for confirming minimum wage

• Current practice – divide gross income by estimated hours to determine hourly rate

• Proposed practice – divide gross income by MA minimum wage rate to determine hours

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Eligibility Determinations – Documentation Requirements

The following new or revised provisions are required to respond to comments and/or feedback from internal and external stakeholders.

• Additional documentation (clarifies existing practice)

o Authorizes providers and/or CCR&Rs to request additional documentation related to the residency of unreported parents, if file indicates application inaccuracies/ contradictions.

• Data Sharing and/or Interfaces (new requirement)

o Authorizes EEC to request and/or provide information to/from other government agencies, contracted providers, other states and banks or other financial institutions for purposes of verifying eligibility.

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OVERVIEW OF REVIEW PROCESS

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Review Process: Issues

Caseload volume (by calendar year)• 2008 = 756 Requests for Review• 2009 = 1,438 Requests for Review • 2010 = to date, 829 Requests for Review

Incomplete documentation Significant lag times within caseload processing Appellants have several “bites of the same apple” Child care may continue for several additional

weeks or months pending the outcome of the review and/or the informal hearing

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Review Process: Proposal

Proposed updates to EEC Review Process regulations include:

Dismissals for failure to prosecuteClarify appropriate grounds for appealClarify documentation timelinesGrant opportunity for appeal related

to recoupment amounts

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GOALS FOR THE REVIEW PROCESS

EEC seeks to revise the Termination and Reduction of Services and the Review Process sections to:

Streamline and Manage Efficiencies Address Federal and State Mandates to Recoup

Fees Parent recoupments (by calendar year)• 2008: 4 repayment agreements; 7 referrals to BSI/

AGO referrals. • 2009: 196 repayment agreements; 5 BSI/ AGO

referrals. • 2010: to date, 336 repayment agreements; 1 BSI/AGO

referral Provide clarification for Parents, CCR&Rs and

Contracted Providers

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10.12 Termination and Reduction of Services

(1) Reasons for Denial or Termination: Currently, there are 6 reasons for issuing a denial or termination of subsidized child care:

• Lack of continuing service need

• Lack of financial eligibility

• Non-payment or late payment of fees

• Unexplained or excessive absence

• Failure to submit the required documentation at reassessment

• Failure to comply with EEC’s, CCR&R’s or contracted provider’s policies

EEC seeks to add two additional reasons:

• Submission of False or Misleading Information and/or Documentation to the contracted provider, CCR&R or EEC

• Outstanding child care debt owed to the Commonwealth

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10.12 Termination and Reduction of Services (cont’d)

(2) Reasons for Reduction: EEC seeks to modify the existing reason for reduction:

• Parent(s)’ service need changes from full time to part time

and add a new reason for reduction:

• If a change in the total household income results in an increase to the parent(s)’co-payment fee, in accordance with EEC’s fee schedule

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10.13 Review Process

(1) Reasons for Review: EEC seeks to add an additional reason for review:

assesses a fee or an outstanding child care debt that the parent believes is not in accordance with EEC policy

(2) Scope of Review: EEC seeks to clarify scope of review by adding a new scope to reflect recoupment:

Requests for Review that are solely related to the existence and/or the amount of a debt owed are outside the scope of the review process, if:

  (a) the parent(s) has already entered into an agreement to repay the outstanding debt; or

(b) the parent(s)’ claim is limited to financial hardship imposed by the agreement to repay

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10.13 Review Process (cont’d)

(6) Termination of Continued Subsidized Child Care: Currently there are 3 bases as to when subsidized child care can be terminated during the review process or subsequent appeal:

• a determination is made that the sole issue is a challenge to the validity of a particular law or regulation

• a change affecting the parent’s subsidy occurs subsequent to the filing of the request for review that makes the previously filed request moot

• the parent fails to comply with the requirements for continuing subsidized child care.

EEC seeks to add the following as an additional basis:

• a determination is made that there is no genuine issue of material fact as presented by the parent in his/her request for review

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10.13 Review Process (cont’d)

(7) Preliminary Review:

(d) Decisions:

1. How Made. Currently the EEC Review Officer reviews all information submitted by the parent and the provider or CCR&R and seeks clarification from the parties, if necessary. The Review Officer may take administrative notice of general, technical or scientific facts within his/her specialized knowledge and may use his or her experience and specialized knowledge in the evaluation of the evidence presented.

EEC seeks to add the following provisions:

The Review Officer may take administrative notice of public records or any information provided by other state agencies, the State Auditor’s Office and/or its Bureau of Special Investigations. If during the evaluation of the evidence presented, the EEC Review Officer determines that additional reasons for termination/reduction as enumerated in 606 CMR 10.12 (1) and (2) are supported by the evidence, the Review Officer will identify these in the written decision.

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10.13 Review Process (cont’d)

(8) Informal Hearing:

(e) Reasons for Dismissal: Currently there are 2 reasons as to when a request for informal hearing may be dismissed. EEC seeks to modify this provision and add two more reasons for dismissal as follows:

1. fails to appear at the informal hearing;2. fails to prosecute his/her claim;3. has already agreed in writing to repay the debt at

issue; or

4. withdraws the request for Informal Hearing in writing or on the record at the hearing.

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Proposed Regulation Promulgation Timeline

Tasks Date

Vet Regulation Changes with Providers/ CCR&Rs; continue to make policy changes/ clarifications that do not require regulation changes

Fall 2010

Board reviews first draft of proposed regulation changes; Committee discussions

Jan/Feb 2011

Board vote to put regulations out for public comment

Public comment period; meetings with providers/ advocates

Board vote to promulgate regulations;Roll out implementation/ trainings

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