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CCCAP: Alternate Methodology Rate Setting

The Need 

Public funding programs like the Colorado Child Care Assistance Program (CCCAP) currently rely on market rates (a family‚Äôs ability to pay) to determine reimbursement rates for providers, with programs often paying only 75% of market rates. This method often results in providers being reimbursed far less than the cost of care. This increases the difficulty for providers to offer care to CCCAP-eligible families. This is especially true for infant and toddler care, for which the market rate is lower than the actual cost of care. 

Research and formula development is necessary to establish new rates.

The Strategy

CDEC has utilized stimulus funds to support research and formula development for CCCAP, with the goal of aligning rates with the true cost of care. Shifting the way CDEC establishes CCCAP provider reimbursement rates will help sustain the industry by covering actual program costs and increase access to quality child care for CCCAP-eligible families.

Key Outcomes and Learnings

CDEC has successfully completed phase one of this project and has received approval of the proposed alternative methodology from the Federal Office of Child Care.

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Funding

Amount: $300,000

Source: American Rescue Plan Discretionary 

Expiration: September 30, 2024

Next Steps

CDEC has successfully completed phase one of this project and has received approval of the proposed alternative methodology from the Federal Office of Child Care.

In partnership with Brodsky Research and Consulting, CDEC will move forward with phase two. This entails implementing the approved methodology to establish new reimbursement rates that will be effective October, 1, 2024. 

Additionally, CDEC will complete a narrow cost analysis and a report containing the results of the alternative methodology completed by June 30, 2024.