Innovating Child Care Subsidy with Pie for Providers

As of August 28^th, 2021, more Nebraska families are eligible for child care subsidy thanks to newly expanded income guidelines. This expansion was introduced through LB 485 and is scheduled to apply through September 30, 2023. Under these new rules, families with incomes up to 185% of the federal poverty level – or about $4000 per month for a family of four – are now eligible for subsidy. 

Today, only 8% of eligible Nebraska children are enrolled in subsidy. We celebrate this expansion as a key first step in increasing subsidy participation.  Yet families are only half of the equation. To increase subsidy participation, it’s important to understand the challenges providers have in participating in the program. We must make subsidy easier for providers to ensure that newly eligible families can find a child care spot. 

Barriers and opportunities for providers

While eligible families experience financial relief through the child care subsidy, many providers find participating in the subsidy brings business challenges. 

Based on our conversations with providers and data from the 2021 Market Rate Survey we’ve identified a few key challenges providers experience: 

• Paperwork is time consuming and stressful.
• Providers do not get reimbursed for all absences. 
• Payment rates are often less than what providers charge private-paying families. 
• Providers are already full from private pay families.
• Providers are potentially losing revenue due to honest mistakes in their billing and recordkeeping.

While these burdens are significant, there are reasons for providers to participate in subsidy.

• Providers now get paid for up to 5 absences per month. This new policy reduces potential lost revenue due to low attendance. 
• Steady, reliable income
  • A private pay family may have their own challenges when it comes to paying on time or paying at all. With subsidy, you can guarantee that payment from the state will be coming every month. Offsetting income from private pay families alleviates financial risk, should one source become strained.
• Full enrollment
  • Programs that have trouble reaching full enrollment can fill their roster by accepting families on subsidy. 
• System improvements 
  • Becoming a subsidy approved program gives strength to the provider voice that is critical to championing for change. Participating in the program allows providers to advocate for a better system and is a win-win for the future of child care subsidy.
• Community care
  • Caring for children is the most important part of the job. By opening your doors to families in need, you’re not only providing a wonderful opportunity for that child, but you’re equipping that family with the ability to do what may otherwise be unavailable to them – going to work, continuing their education, providing for the rest of their family, etc. Communities that look out for one another are invaluable. 
• Support for current families
  • With new eligibility rules, now is the time to check in with families you already serve to see if you can help them get financial help. 

Through a strategic partnership, we aim to drastically increase the number of eligible children enrolled in subsidies to help more families find quality care, and to help providers maximize their subsidy income.

A new path for child care subsidy

In March of 2021, we launched a pilot partnership with Pie for Providers to serve our Elevated Network Family Child Care Providers who accept child care subsidy. Pie for Providers (P4P) is a nonprofit that uses technology to help child care providers earn more money and help low-income families access early care and education. Now, the pilot is open to all providers in the NECC family child care network!

“Our partnership with Pie for Providers is an opportunity to directly support providers today, while also reinforcing policy advocacy and systems change goals.” Shannon Cotsoradis, CEO of NECC.

Chelsea Sprayregen, Co-founder of Pie for Providers, describes the program’s goals: “Child care providers work incredibly hard, and our goal is to make sure they get every single dollar they have earned for their valuable work. Our software also gives them time back, by taking paperwork off their plates.” 

Pie for Providers’ open-source product addresses some of providers’ biggest pain points, reducing the time providers spend on subsidy paperwork, and helping them maximize their income. 

With Pie for Providers’ subsidy management dashboard:

• Providers avoid costly billing errors. P4P ensures providers don’t exceed allowed units per week or per year, and it automatically calculates billable units every day. 
• Providers save time. When they sit down to do their billing once or twice per month, providers have all the information they need at their fingertips. They don’t need to do time-consuming calculations themselves. 
• Providers maximize subsidy funding. They get automated alerts when childrens’ attendance is low, and there is a risk of losing subsidy funding. They don’t need to wait until the retroactive billing period ends to take action. 
• Providers know how much funding to expect and why.  P4P offers real time revenue projections, based on attendance and local rules. Providers don’t have to wait for the retroactive billing process to end to know how much they’ll make. They can do more than simply eyeball their check after the fact. 

Knowing their subsidy revenue is consistent and accurate ahead of time gives providers the confidence to open more spots to subsidy families. 

Promising results

After just a few months of our pilot program with P4P, we’re already seeing encouraging results from regular usage. Providers report:

• The information on their P4P dashboard is actionable, valuable, and novel.
• P4P is intuitive and fits into their daily routines.
• They believe P4P will motivate their peers to begin accepting subsidy – and that’s why 75% of current users have already recommended it to another provider. 

P4P is actively building and testing additional features to comprehensively address all of providers’ subsidy challenges. Over time, P4P aims to integrate directly with states’ subsidy systems to alleviate even more of providers’ administrative burdens.

Laying the groundwork for systems change 

This partnership is a great example of how policy and practice need to work together to make change. Over time, NECC and our advocacy partners aim to use anonymous data from this partnership to make the case for key advocacy priorities, including:

• Extending expanded eligibility for families beyond 2023
• Paying providers based on enrollment, not attendance

We know that our NECC Elevated Network Family Child Care Providers will play an essential role in advocating for better subsidy policy. No one knows the subsidy challenges better than they do, and yet they work within the system every day to manage their businesses and serve their communities. 

More providers wanted

Our pilot program started with the Elevated Network at NECC but is now open to all family child care providers in the network. If you’re interested in using technology that helps you claim more child care subsidy funding with less time and hassle, please contact us for more information. Let’s be part of a better child care subsidy program for all Nebraska families and providers!