What’s Causing the Inequity in Reimbursement for Centers Vs. Homes
July 11, 2024
CACFP reimbursement rates were recently released for the 2024-2025 program year. While rates increased for both centers and family child care homes, you may have noticed that centers received a larger reimbursement bump than homes. The reimbursement for homes only increased by 1.04% compared to the 4.03% increase for centers. This is a result of changes in the Consumer Price Index (CPI) which is a measure, estimated by the Bureau of Labor Statistics, of the average change over time in the prices of goods and services. The Consumer Price Index for Food is used to calculate reimbursement rates for CACFP each year – as price of food goes up, so do the reimbursement rates.
So, why did centers receive a 4% increase while homes only received a 1% increase?
This is because there are two different CPI’s for Food:
- At Home: the cost to purchase groceries to make food at home.
- Away From Home: the cost to buy food outside of your own home, at a restaurant or store.
USDA is required by law to calculate center reimbursement rates using the CPI Away From Home and to calculate home reimbursement rates using the CPI At Home.
As to be expected, the cost to eat food Away From Home is higher than the cost to make food At Home. Therefore, centers typically receive a larger increase in reimbursement each year compared to homes.
What is the long-term impact of the difference in CPI for centers and homes?
With centers and homes continuing to follow different CPI’s, CACFP homes and centers will see a disparity in reimbursement that grows larger each year. Reimbursement for centers will continuously rise at a higher percentage than homes year after year, causing the gap ($ amount) in reimbursement for meals served in homes versus centers to become wider. For example, in 2010 Tier I homes only received $0.50 less in reimbursement for lunch/supper compared to centers, they now receive $1.28 less than centers for lunch/supper.
How can we fix this problem?
Aligning the calculation of reimbursement for homes to also be based off of CPI Away From Home would stop the increasing difference between reimbursement of homes and centers. However, since the calculation of reimbursement is written into law, congressional action must be taken to make this change.
There is legislation in congress right now to fix this exact issues. The Early Childhood Nutrition Improvement Act would align the calculation of reimbursement rates for family child care homes with that of centers by shifting to CPI for Food Away From Home. Take action today and ask your congressional representatives to support this legislation.