Incentives for “Shouting ‘Program Fraud’ in a Crowded Theater”?

Incentives for “Shouting ‘Program Fraud’ in a Crowded Theater”?

Like all private schools and private academies, the child care industry standard throughout the nation is to charge full-time fees for full-time slots- regardless of attendance – in order to cover fixed cost per-child including staffing, meals, instruction, accreditation standards, licensing standards, administration and maintenance of facilities, buildings and grounds.

Xerox. the tech systems giant, has created e-Childcare™ which defines child care assistance paid for actual attendance by the hour and possible six-minute increments as accurate payment. (This implies the current Mississippi policy of full-time reimbursement for full-time slots is “attendance related payment error” by the provider.)

I am convinced such a careful play of words is used by some to build public support of this adverse policy by inflaming racial bias, assigning disparaging stereotypes and insinuating widespread fraud all the while absolving huge “savings” to states and large contracts to Xerox by affectively compensating compliant providers for less. (Click here to see XEROX “Proven Ideas for Tough Times  September 2012.)

In its Economic Impact Statement proposing e-Childcare™, the state said it could save up to $18 million annually by reducing false attendance claims by childcare providers.

“It has been tough economic times for the state. This will make more federal dollars available to increase the number of children served through the certificate program,” said Jill Dent, DECCD Director at DHS.

Providers maintain Jill Dent has spent like a “drunken sailor” during said tough economic times for the state by awarding $8,000,000 more than federally required on quality initiatives to a university and non-profits in 2012, more than doubling the spending in 2013 to administer a failed QRIS and spending more on “quality” than any other DHS administration in this state’s history (with little success to show for it) all the while placing children of the working poor on a waiting list to be served – children who could have been served with that funding!  Holding quality spending to the federally required amount of 4% should have been listed as a less stringent manner in which to serve more children in the Economic Impact Statement Dent provided. (Click here to review the 2012 quality spending listed in the current CCDF State Plan, page 7.)

It was not.

Professor Michele Estrin Gilman of the University of Baltimore School of Law writes: “These for-profit entities have different incentives, and more political power, than the nonprofit entities typically engaged in social service delivery in the past.  In many contracting schemes, where a set fee is paid to the contractor (Xerox), the more money the provider (DHS) saves, the more money the provider (DHS) gets to keep. This raises incentives for profit-seeking organizations to cut staffs and to implement other cost-savings measures that can impact the quality of service provided.” (Click here to view “Legal Accountability in an Era of Privatized Welfare“.)

The American Civil Liberties Union in Mississippi is researching the legality of the finger scans and the ACLU in Louisiana is also beginning to express concern for Louisiana providers.

And around the country, child care rights advocates watching Mississippi say the finger-scanning policy is troubling.

Under the DECCD leadership of Jill Dent, low-income working families qualifying for child care assistance – the very poorest of the working poor – have not been provided an increase in child care assistance fees since before three Minimum Wage increases.

The federal CCDF statute at 658E(c)(4) and the regulations at §98.43(b)(1) require the Lead Agency to establish adequate payment rates for child care services that ensure eligible children equal access to comparable care. (Click here to see current CCDF State Plan at section 2.7. Payment Rates for Child Care Services. pp. 67 -70.)

In Mississippi, less than full-time 2007 market rate “hourly reimbursement fees” for actual attendance electronically submitted to e-Childcare™ for payment will not cover costs per-child or buy access to comparable programs for low-income children.  It will likely create disparate impact on a protected group of small child care businesses that do accept and enroll large numbers of low-income children receiving Mississippi child care assistance.

Deloris Suel (child care providers) sued Richard Berry and MDHS for a failure to provide a proper Economic Impact Statement as specifically outlined in the Mississippi Administrative Procedures Act outlining the adverse affect of e-Childcare™ to a specific type of provider – licensed centers.

A Final Hearing will be held Wednesday, August 14, 2013, beginning at 9:00 AM, in Hinds County Chancery Court, 407 East Pascagoula Street, Jackson, MS, Judge Denise Owens presiding.

The plaintiff is represented by Attorney Lisa Ross of Jackson, MS.

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