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FCCH Provider Perception of Increased Pandemic Reimbursement

December 5, 2024

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A survey was administered in the spring of 2023 of licensed California family child care homes (FCCH) to assess the perceived impacts of the increased reimbursement during the Covid-19 pandemic on CACFP participation and anticipated challenges with reinstated tiered rates. The survey found that over half of FCCH providers lowered out-of-pocket spending for food (59%) and served greater variety (55%) and quality (54%) of foods with increased reimbursement. Tier 2 providers reported experiencing more benefits and tended to be more likely to implement optional CACFP best practices. Most FCCH providers found reimbursement rates were inadequate before (83%) the pandemic; this amount decreased to 54% post-pandemic for tier 1 and tier 2 providers combined.

 

Why It Matters

During the pandemic, all FCCH providers receive the same, higher, reimbursement rate while tiering was temporarily waived. Increased reimbursement was vital during the pandemic, however tiering was re-implemented in June of 2023, cutting reimbursement for Tier 2 providers in half. Understanding how increased reimbursement rates impacted FCCHs during the pandemic, can help the CACFP community and policymakers understand how the current reimbursement system and rates can better address the needs of CACFP providers.

Effect of Increased Reimbursement

  • 59% of FCCH providers reported lowering the amount they had to spend out-of-pocket for food costs
  • 55% served a greater variety of foods
  • 54% served better quality foods
  • 42% were better able to serve meals and snacks that children like
  • 28% were able to not increase child care costs to families
  • 18% increased the number of meals and snacks served
  • 8% reported no advantages from the higher reimbursements
  • Significantly more tier 2 providers reported experiencing benefits from the higher reimbursement compared to tier 1 providers
  • The majority of FCCH providers reported that higher reimbursement rates made it easier to implement the optional CACFP best practices

Expectations After Return to Tiering

When asked about the likelihood of having to make changes once the tiered CACFP reimbursement rates returned, both tier 1 and 2 FCCH providers (25% or more) said it was extremely likely that they would do the following: increase the amount families are charged for childcare and decrease the variety of foods provided at no charge to families.

  • 14% of tier 1 and 12% of tier 2 providers said it was extremely likely they would leave the CACFP and require families to provide food for children
  • 10% tier 1 and 13% tier 2 providers said they would leave the CACFP but continue to offer food for children
  • 4% tier 1 and 3% tier 2 providers said they would likely close their business

Adequacy of CACFP Reimbursement

When asked about the adequacy of CACFP reimbursement rates in terms of covering actual meal and snack costs, 83% estimated that amounts were not enough pre-COVID while 54% reported they were inadequate after the COVID-related increases.

  • For 27% of providers the CACFP reimbursement needed to provide two meals and one snack each day per child aged three to five years that met  CACFP nutrition standards and appealed to children ranged between $6 and $8.
  • When the midpoint of each reimbursement rate range was used to calculate a mean amount, the amount estimated was $7.34 for tier1 and $7.54 for tier 2.

Conclusion

The CACFP promotes the enhanced nutrition of meals and snacks served to young children, especially to those in families living on low income, by providing nutrition requirements and financial support to childcare providers. Despite the many benefits of receiving financial support, CACFP FCCH providers perceive the reimbursement rates to be inadequate, especially tier 2 providers. While the increased reimbursement rates due to the temporary COVID-19 waiver positively impacted perceptions of the quality of meals and snacks served, providers in both tiers desired a higher reimbursement rate to provide meals and snacks that meet CACFP standards and appeal to the children in their care. Increasing reimbursements for all FCCHs may support increased FCCH participation in the CACFP, ensuring more U.S. children benefit from the healthy meals and snacks provided by the CACFP.

 

For more information, read the full article “Child and Adult Care Food Program: Family Childcare Home Providers’ Perceptions of Impacts of Increased Meal and Snack Reimbursement Rates during the COVID-19 Pandemic.” The report was written by Lorrene D. Ritchie, Kassandra A. Bacon, Celeste Felix, and Danielle L. Lee of the Nutrition Policy Institute/; Samantha Kay-Daleiden Marshall and Elyse Homel Vitale of the CACFP Roundtable; and Susana L. Matias of the Department of Nutritional Sciences and Toxicology at the University of California, Berkeley.