RECAP of the January EEC Board Meeting: Consolidated Reimbursement Rates and Contract Procurement
At Neighborhood Villages, we prioritize keeping up with the policy landscape in the early education and care field, both across the country and in Massachusetts. That includes tuning-in to the monthly meetings of the Massachusetts Board of Early Education and Care (“EEC Board”), to stay apprised of updates and to identify opportunities for how we can work with government and other stakeholders to improve our early education and care system.
The primary topics of this month’s Department of Early Education and Care (EEC) Board meeting were: (1) vote of child care facility investment regulation revisions; (2) vote on proposed reforms to Child Care Financial Assistance (CCFA) reimbursement; and (3) updates on the Commonwealth Cares for Children (C3) program. Here’s what you need to know…
If You Are a Provider:
The EEC Board voted in favor of proposed regulatory adjustments to the early education and out of school time (EEOST) capital grants program. The main change approved is to continue to offer smaller grants ($200,000-$500,000), as well as the flexibility to administer both large and small grants on a permanent basis. (For additional information, see the recap of the November 2023 Board meeting.) In addition to the regulatory changes, EEC plans to offer capital improvement grants to FCCs and is currently in the process of identifying a partner organization with whom it can partner to support such an effort.
The EEC Board voted in favor of EEC’s recommendation to consolidate reimbursement rates for CCFA into three rates. The new rates will reflect the addition of $65 million into the program in fiscal year 2024 and will impact providers as follows:
Newly consolidated rates will (a) “align rates among regions that are substantially similar across key economic indicators”: the Metro and Metro Boston regions will share one rate; the Northeast region will have another rate; and the Western, Central and Southeast regions will share another rate. (For information on alternative proposals, see the recap of last month’s meeting.)
All Center-Based providers will receive a 5.5% “across the board” increase for rates by region and age groups, as well as an increase to ensure all rates reach at least 81% of the cost of care; and
All Family Child Care (FCC) providers will receive a 5.5% “across the board” increase for rates by region and age groups (with implementation subject to union negotiation); and
The daily add-on rate for supportive, young parent and homeless contracts will increase by $1 from $23 to $24.
EEC is targeting February 2024 to make rate increases – all of which will be retroactive to July 1, 2023 – available to eligible providers.
If You are a Child Care Advocate:
C3 grants continue to make an essential contribution to provider operating funds, including by preventing more than 1,000 programs from closing. Based on information supplied – from 10/31/2023-12/31/2023 – by providers who receive C3 grants, the impact of the grants includes the following:
1,161 providers (14%) of providers report they would close without C3 funds;
30% of center-based providers report not being able to serve at their full capacity. Of those who report being unable to serve their full licensed capacity, 21% report this is due to unfilled staff openings;
Center based providers continue to spend more than half of recent grant funds on existing payroll and benefits;
FCC providers spend almost 40% of funds on facilities and rent;
Providers spent two-thirds of recent grant funds on workforce-related expenses;
Educator wages continue to grow since the start of the C3 grant, with the average hourly wage for a center-based teacher in November 2023 being $22.09 (approximately $46,000 per year for a teacher who works full day/full year);
50% of center-based providers and 47% of FCC providers reported that C3 allowed them to delay tuition increases; while 66% of center-based providers and 57% of FCC providers reported that they would increase tuition in the absence of C3 grants
It is likely that C3 grants have ensured Massachusetts continues to grow its licensed capacity to serve children with early education and child care, which now (as of January 1, 2024) exceeds pre-pandemic levels. The number of licensed child care programs (8,171) continues to rebound as well, experiencing a 7% increase from fall 2022 (7,648) and 22% increase since the fall 2020 pandemic (6,716).
Recently, Governor Healey’s administration engaged in a rebalancing of the state budget at mid-year. The impact to EEC was an approximate $15M reduction across three areas: reduction of $7M in carryover from FY23 that would have been available for a rate increase (instead, EEC has maintained $65M for rates); reduction of $3M in carryover from FY23 intended for IT investments for the CCFA program (a recently introduced bond bill proposes $12M to invest in a modern IT system for for families in the CCFA program, so EEC doesn’t expect impact from that reduction); and a $5M reduction via removal of an earmark in that amount for the early education staff financial assistance pilot program. (Important to note, however, is that educators benefiting from this program will now be served through EEC’s regular income-eligible caseload accounts, incorporated permanently as priority population.)
EEC formally received approval for use of an alternative cost methodology and flexibility to start using that methodology on July 1, 2025, to avoid having to do another market rate survey. While EEC will continue to look at market rate to understand cost, reimbursement will be benchmarked against provider costs of delivering care.
On 1/16/2024, EEC will be posting two Requests for Proposals (RFPs) for the Commonwealth Preschool Partnership Initiative (CPPI) – one for existing grantees to expand their programs and one for communities who want to participate to plan their programs (priority is given to gateway communities but will be open to other communities). EEC plans to share more about CPPI at the Board meeting on February 14th.
