BILL ANALYSIS Ó
AB 2133
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
AB 2133
(Chu) - As Amended April 12, 2016
SUBJECT: Child care: alternative payment programs: appeals
process
SUMMARY: Requires the California Department of Education (CDE)
to establish parallel appeals processes for parents and
providers of child care and development programs. Specifically,
this bill:
Appeals process for parents:
1)Requires the CDE to establish a two-step appeals process for
parents who receive subsidies that includes a first step
within the alternative payment program (APP) agency with the
hearing officer being an administrative employee other than
the employee who made the decision that is being appealed, and
a second step within the Early Education and Support Division
(EESD) of the CDE. Specifies that the CDE's decision shall be
final.
2)Requires the contractor, through the notice of action (NOA),
to notify the parent of his or her appeal rights any time a
NOA is sent to the parent. Specifies that a "contractor"
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means the local contracting agency that has entered into an
agreement with the CDE for an APP.
3)Requires the contractor to complete a NOA if the application
for services is approved, or when changes are made to the
service agreement. These changes may include, but are not
necessarily limited to, an increase or decrease in parent
fees, an increase or decrease in the amount of services or
termination of services, or a violation of parental choice.
4)Requires the contractor to mail or deliver the NOA to the
parent at least 14 calendar days before the effective date of
the intended action.
5)Authorizes the parent to file a request for a hearing with the
contractor within 30 calendar days of the date the NOA was
received if the parent disagrees with an action.
6)Specifies that upon the filing of a request for hearing, the
intended action shall be suspended until the review process
has been completed. The review process is complete when the
appeal process has been exhausted, including the second step
at the CDE, or when the parent abandons the appeal process.
7)Specifies that within 10 calendar days following the receipt
of the request for a hearing, the contractor shall notify the
parent of the time and place of the hearing. The time and
place of the hearing shall, to the extent possible, be
convenient for the parent and shall be held no later than 14
calendar days after the date when the notice of hearing was
sent to the parent.
8)Requires the hearing to be conducted by an administrative
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staff person who shall be referred to as "the hearing
officer." The hearing officer shall be at a staff level higher
in authority than the staff person who made the contested
decision.
9)Requires the parent, or the parent's representative of his or
her choosing, to attend the hearing. If the parent or the
parent's representative fails to appear at the hearing, the
parent shall be deemed to have abandoned the appeal.
10)Requires the contractor to arrange for the presence of an
interpreter at the hearing if one is requested by the parent.
11)Requires the hearing officer to explain to the parent the
legal, regulatory, or policy basis for the intended action.
12)Specifies that during the hearing, the parent shall have an
opportunity to explain the reason or reasons he or she
believes that the contractor's decision was incorrect. The
contractor's staff shall present any material facts they
believe were omitted by the parent.
13)Requires the hearing officer to mail or deliver to the parent
a written decision within 10 calendar days after the hearing.
14)Specifies that if the parent is receiving Stage 1 CalWORKs
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child care funding, the appeals process applicable to the
CalWORKs program pursuant to Chapter 2 (commencing with
Section 11200) of Part 3 of Division 9 of the Welfare and
Institutions Code shall apply.
15)Gives the parent 30 calendar days in which to appeal to the
EESD if the parent disagrees with the written decision from
the contractor.
16)Specifies that if the parent does not submit an appeal
request to the EESD within 30 calendar days, the parent's
appeal process shall be deemed abandoned and the contractor
may implement the intended action.
17)Requires the parent to specify in the appeal request the
reason or reasons why he or she believes the contractor's
decision is incorrect.
18)Requires the EESD to request copies of the basic data file
including the intended NOA and the contractor's written
decision and other relevant materials from the contractor.
Authorizes the EESD to conduct any investigations, interviews,
or mediation necessary to resolve the appeal.
19)Specifies that the decision of the EESD shall be mailed or
delivered to the parent and the contractor within 30 calendar
days after receipt of the appeal request.
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20)Requires the contractor to comply with the decision of the
EESD immediately upon receipt of that decision.
21)Requires the contractor to be reimbursed for child care and
development services that are delivered to a family during the
appeal process.
22)Specifies that if a contractor's determination that a family
is ineligible is upheld by the EESD, services to the family
shall cease upon receipt of the Child Development Division's
decision by the contractor. If such a decision is made, the
contractor shall notify the affected provider and parent of
that decision.
Appeals Process for Providers:
23)Requires the CDE to establish a two-step appeals process for
licensed and license-exempt family child care providers who
receive subsidy payments through an APP. The first step shall
be within the APP agency with the hearing officer being an
administrative employee other than the employee who made the
decision that is being appealed, and a second step within the
EESD. Requires the CDE's decision to be final.
24)Requires the contractor, through the certificate that
authorizes the provider to care for a child in the subsidy
program, to notify the provider of his or her appeal rights.
Specifies that appealable issues may include, but are not
necessarily limited to, lack of notification of change in the
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status of parents' eligibility for care, accurate payments for
services rendered, and timeliness of payments for services
rendered if submitted timesheets are complete and have met the
timeframes in the contractor's schedule of timesheet
submissions. Defines "contractor" as the local contracting
agency that has entered into an agreement with the APP for an
APP.
25)Requires the contractor, through the certificate of
authorization for care, to initially notify the provider of
the terms and conditions of services to a parent and his or
her children and any changes thereafter. Requires the
contractor to mail or deliver the notice of changes to the
provider at least 14 calendar days before the effective date
of the intended change. If the provider disagrees with an
action, the provider may file a request for a hearing with the
contractor within 30 calendar days of the date the notice was
received by the provider.
26)Specifies that upon the filing of a request for hearing, the
intended action shall be suspended until the review process
has been completed. The review process is complete when the
appeal process has been exhausted, including the second step
at the CDE or when the provider abandons the appeal process.
27)Specifies that within 10 calendar days following the receipt
of the request for a hearing, the contractor shall notify the
provider of the time and place of the hearing. The time and
place of the hearing shall, to the extent possible, be
convenient for the provider and shall be held no later than 14
calendar days after the date when the notice of hearing was
sent to the provider.
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28)Requires the hearing to be conducted by an administrative
staff person who shall be referred to as "the hearing
officer." The hearing officer shall be at a staff level higher
in authority than the staff person who made the contested
decision.
29)Specifies that the provider, or the provider's representative
of his or her choosing, is required to attend the hearing. If
the provider or the provider's representative fails to appear
at the hearing, the provider shall be deemed to have abandoned
the appeal.
30)Requires the contractor to arrange for the presence of an
interpreter at the hearing if one is requested by the
provider.
31)Requires the hearing officer to explain to the provider the
legal, regulatory, or policy basis for the intended action.
32)Specifies that during the hearing, the provider shall have
the opportunity to explain the reason or reasons he or she
believes that the contractor's decision is incorrect. The
contractor's staff shall present any material facts that they
believe were omitted by the provider.
33)Requires the hearing officer to mail or deliver to the
provider a written decision within 10 calendar days after the
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hearing.
34)Specifies that if the provider disagrees with the written
decision from the contractor, the provider has 30 calendar
days in which to appeal to the EESD.
35) Specifies that if the provider does not submit an appeal
request to the EESD within 30 calendar days, the provider's
appeal process shall be deemed abandoned and the contractor
may implement the intended action.
36)Requires the provider to specify in the appeal request the
reason or reasons why he or she believes the contractor's
decision is incorrect.
37)Specifies that upon receipt of a request for appeal, the EESD
shall request copies of the basic data file, including the
intended NOA and the contractor's written decision and other
relevant materials from the contractor. Authorizes the EESD to
also conduct any investigations, interviews, or mediation
necessary to resolve the appeal.
38)Requires the decision of the EESD to be mailed or delivered
to the provider and the contractor within 30 calendar days
after receipt of the appeal request.
39)Requires the contractor to comply with the decision of the
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EESD immediately upon receipt of that decision.
40)Specifies that the contractor shall be reimbursed for any
child care and development services that are delivered by a
provider during the appeal process.
41)Specifies that if a contractor's determination is upheld by
the EESD, the intended action proposed by the contractor shall
be carried out or upheld. If the appeal is upheld, the
contractor shall notify the provider and the parent who was
initially affected by the original decision.
42)Specifies that "Early Education and Support Division" means
the CDE's Early Education and Support Division.
EXISTING LAW:
1)Establishes eligibility for child care services and child
development programs administered by the CDE and requires the
Superintendent of Public Instruction to adopt rules and
regulations on eligibility, enrollment and priority of
services needed for implementation (Education Code (EC)
Section 8263).
2)Provides that CalWORKs recipients are eligible for three
stages of child care services. Stage one child care begins
when a recipient first receives CalWORKs aid and is limited to
six months. Stage two begins when a recipient's work or work
activity is stable and is available for up to two years after
a recipient is no longer eligible for CalWORKs aid. Families
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can maintain child care benefits if it meets income
eligibility under stage 3 if there are slots available. (EC
Sections 8350-8359.1)
3)Specifies that in order to be eligible for federal and state
subsidized child development services, families must meet at
least one requirement in each of the following areas:
a) A family is (A) a current aid recipient, (B) income
eligible, (C) homeless or (D) one whose children are
recipients of protective services, or whose children have
been identified as being abused, neglected, or exploited,
or at risk of being abused, neglected, or exploited; and,
b) A family needs the child care services (A) because the
child is identified by a legal, medical, social services
agency, or emergency shelter as (i) a recipient of
protective services or (ii) being neglected, abused, or
exploited, or at risk of neglect, abuse or exploitation, or
(B) because the parents are (i) engaged in vocational
training leading directly to a recognized trade,
paraprofession or profession, (ii) employed or seeking
employment, (iii) seeking permanent housing for family
stability, or (iv) incapacitated. (EC Section 8263(a))
4)Defines "income eligible" as a family whose adjusted monthly
income is at or below 70% of the state median income (SMI),
adjusted for family size, and adjusted annually. For the
2012-13, 2013-14, 2014-15, and 2015-16 fiscal years, the
income eligibility is 70% of the SMI that was in use for the
2007-08 fiscal year, adjusted for family size. (EC Section
8263.1)
5)Authorizes child care and development funds to be used for
APPs to allow for maximum parental choice. Requires the CDE
to contract with local contracting agencies for APPs.
Authorizes alternative payments to be made for services
provided in licensed centers and family day care homes, for
care provided in the child's home, and for other types of
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care. (EC Section 8220 et seq.)
6)Specifies that a contracting agency may have its contract or
contracts immediately terminated if there is documented
evidence of the acts or omissions, and upon review and
recommendation of the general counsel of the CDE, for
specified acts, including failure of an APP to fully reimburse
a significant number of approved child care providers, within
15 calendar days after the date set in the plan for timely
payments to child care providers adopted by the contracting
agency. (EC Section 8406.7)
FISCAL EFFECT: Unknown
COMMENTS:
Background on child care and development programs. The CDE
administers a child care and development system, maintaining
over 1,300 service contracts with approximately 750 public and
private agencies supporting and providing services to children
from birth through 12 years of age. Contractors include school
districts, county offices of education, cities, colleges, other
public entities, community-based organizations, and private
agencies. According to the Legislative Analyst's Office,
overall funding for the child care and development programs
decreased by almost $1 billion between 2008-09 and 2012-13, with
the elimination of 110,000 slots. The combined federal and
state funding for child care and development programs total $3.6
billion (state funds of $2.7 billion and federal funds of $938
million), offering 436,185 slots.
APPs. APPs, funded with state and federal funds, offer a
variety of child care arrangements for parents, including
licensed family child care homes and center-based care, and
arrange for payments to licensed-exempt providers, who are
relatives or friends of parents or guardians. The APP helps
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families access child care services and makes payment for those
services directly to the child care provider selected by the
family. The APP is intended to increase parental choice and
accommodate the individual needs of the family. APPs are
reimbursed based on the number of children served and funds are
appropriated based on the fiscal reporting process and budget
estimations. In 2015-16, there were 75 APPs throughout the
state and they range from private, nonprofit organizations to
county offices of education. APPs began as pilot programs in
1977 and became permanent in 1980.
This bill establishes two nearly identical appeals processes,
one for parents and one for child care providers, both licensed
and licensed-exempt, who receive or provide care through APPs.
Under Title 5, California Code of Regulations, the CDE has an
established appeals process for parents. According to the
sponsor, the Service Employees International Union (SEIU), it is
necessary to codify an appeals process because regulatory
changes sometimes take too long.
Parent appeals. This bill allows parents to file a request for
a hearing with an APP administrator and if unsatisfied with the
decision, may request an appeal with the EESD. The process
proposed by this bill is almost identical to Title 5
regulations, with several differences. First, the bill
specifies that a NOA is required if service is approved, when
there is a change in parent fees, an increase or decrease in the
amount of services, or termination of services. These are
consistent with Title 5 regulations. The NOA is the form used
to inform parents of approval, changes, or termination of child
care services. This bill adds "violation of parental choice" to
the requirement to complete a NOA. According to SEIU, parents
have been pushed into a particular setting that was not their
choice and were told that that was all that was available. The
author may wish to change this language to "change of providers"
or strike this language from a requirement to issue a NOA and
instead stipulate that it is an appealable issue.
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Second, this bill authorizes parents to file a request for a
hearing within 30 calendar days upon receipt of a NOA, whereas
the regulations stipulate 14 calendar days. According to the
sponsor, parent advocates have requested additional time to file
an appeal. In Title 5 regulations and in the bill, NOAs are
required to be sent 14 calendar days prior to the effective date
of an action. This bill creates a gap between days 15 and 30 by
giving parents 30 days to file an appeal. In effect, no change
will likely take place until after the 30 day period if a parent
does not file an appeal, until an appeal is resolved, or if the
parent drops the appeal for every NOA issued.
Third, the bill requires a hearing to take place no later than
14 calendar days after the date a notice of the hearing was sent
to the parent. The regulations are silent on this issue.
Fourth, if a second appeal to the EESD is requested, the bill
requires the EESD to request documents necessary to hear the
appeal. Title 5 regulations require parents to submit a copy of
the NOA and the APP's written decision with the request for a
second appeal. This bill relieves parents from having to submit
documents.
Provider appeals. Title 5 regulations require APPs to establish
written policies for operation, including requirements for
provider participation. The regulations do not contain an
appeals process for providers. The bill establishes an appeals
process for child care providers that parallel the process
established for parents, which is problematic in some areas, as
the language for parent appeals are not fully applicable for
providers.
Provider appealable issues. The bill specifies that appealable
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issues may include, but are not necessarily limited to, lack of
notification of change in the status of parents' eligibility for
care, accurate payments for services rendered, and timeliness of
payments for services rendered. While accuracy of payments is
something that can be resolved and determined through an appeal,
it is unclear what decision an APP would make for "lack of
notification of change in parent eligibility" or "timeliness of
payments of services rendered," beyond an agreement by the APP
to notify or make payments in a timely manner in the future.
Grievance instead of appeal? The bill requires a contractor to
explain the legal, regulatory or policy basis for an action and
for a provider to explain why a contractor's decision is
incorrect. It is unclear what contractor decision there is if
the complaint is that payments were not made in a timely manner.
Additionally, if an appeal is made with the EESD, the bill
requires the EESD to make a decision that will be mailed or
delivered. What decision would EESD make regarding lack of
timely payment? EESD could reprimand the contractor or put the
contractor on conditional status, but that's not really a
"decision" regarding an appeal. An appeals process is usually
established in order to determine whether a decision should be
reversed or changed. It's different than a grievance process,
where a complaint may be made in order to improve a process.
The EESD already has authority provided under EC Section 8406.7
to terminate an APP contract for specified actions or inactions,
including failure to fully reimburse a significant number of
child care providers. Perhaps that section can be strengthened
to establish a process for EESD to receive and investigate
complaints by providers. Staff recommends the following options
for consideration:
1)Establish a grievance process rather than an appeals process
for providers.
2)Instead of an appeals process, strengthen the provisions in EC
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Section 8406.7 to require the CDE to investigate complaints
for any of the reasons specified in Section 8406.7.
3)If the author chooses to keep an appeals process, if the
appeal is not about payments (e.g., not being paid the correct
amount), change the requirement that the EESD must make a
"decision," and instead require EESD to investigate and take
actions to address any problems with the contractor if
necessary.
Other issues in the provider appeals section. The bill requires
the intended action to be suspended until a review process has
been completed. This language was adapted from the parent
appeals language, but it is not clear how it is applicable.
There is no intended action for an appeal about not being paid
on time. It's not even clear how it's applicable if the appeal
is about not being paid the correct amount.
If a provider seeks a second appeal, the bill requires the EESD
to request copies of the basic data file, including the intended
NOA and other relevant material. It is not clear why the EESD
would need the NOA if the provider appeal is about not being
paid or not being paid on time.
The bill requires a contractor to carry out an intended action
or notify the provider and the parent who was initially affected
by the original decision based on a decision made by the EESD.
There is no intended action if the appeal is about not being
notified about a change in parent eligibility for care or not
being paid on time.
The SEIU states, "Existing law lacks a uniform policy for
resolving disputes around child care payments. Errors in
payments can cause problems for both parents and providers and
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can eligible children without care. Currently there is an
ineffective complaints procedure at the Department of Education
for parents. This is no such procedure for providers?.AB 2133
does not propose to penalize an alternative payment program if
the appellant's position was upheld. It is more about changing
how the alternative payment program operates and relates to
providers."
Prior related legislation. AB 315 (De Leon), introduced in
2009, would have required CDE to establish guidelines for APPs
regarding payments to providers and other related administrative
procedures. The bill passed the Assembly on a 47-30 vote but
was gutted and amended to address a different issue in the
Senate.
REGISTERED SUPPORT / OPPOSITION:
Support
United Domestic Workers of America/AFSCME Local 3930
Opposition
None on file
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Analysis Prepared by:Sophia Kwong Kim / ED. / (916) 319-2087