If the market rate survey is used to set reimbursement rates, the following shall apply:

(a) Payments made by alternative payment programs shall not exceed the applicable market rate ceiling. Alternative payment programs may expend more than the standard reimbursement rate for a particular child. However, the aggregate payments for services purchased by the agency during the contract year shall not exceed the assigned reimbursable amount as established by the contract for the year. No agency may make payments in excess of the rate charged to full-cost families. This section does not preclude alternative payment programs from using the average daily enrollment adjustment factor for children with exceptional needs as provided in Section 10281.5.

(b) Alternative payment programs shall reimburse licensed childcare providers in accordance with a biennial market rate survey pursuant to Section 10436, at a rate not to exceed the ceilings established pursuant to Section 10374.5.

(c) An alternative payment program shall reimburse a licensed provider for childcare of a subsidized child based on the rate charged by the provider to nonsubsidized families, if any, for the same services, or the rates established by the provider for prospective nonsubsidized families. A licensed childcare provider shall submit to the alternative payment program a copy of the provider’s rate sheet listing the rates charged, and the provider’s discount or scholarship policies, if any, along with a statement signed by the provider confirming that the rates charged for a subsidized child are equal to or less than the rates charged for a nonsubsidized child. A license-exempt childcare provider is not required to submit rate sheets.

(d) An alternative payment program shall maintain a copy of the rate sheet and the confirmation statement.

(e) A licensed childcare provider shall submit to the local resource and referral agency a copy of the provider’s rate sheet listing rates charged, and the provider’s discount or scholarship policies, if any, and shall self-certify that the information is correct.

(f) Each licensed childcare provider may alter rate levels for subsidized children, as needed, and shall provide the alternative payment program and resource and referral agency with the updated information pursuant to subdivisions (c) and (e), to reflect any changes. Updated rates shall be effective within 60 days of submission of the updated information pursuant to subdivisions (c) and (e).

(g) A licensed childcare provider shall post in a prominent location adjacent to the provider’s license at the childcare facility the provider’s rates and discounts or scholarship policies, if any.

(h) An alternative payment program shall verify provider rates no less frequently than once a year by randomly selecting 10 percent of licensed childcare providers serving subsidized families. The purpose of this verification process is to confirm that rates reported to the alternative payment programs reasonably correspond to those reported to the resource and referral agency and the rates actually charged to nonsubsidized families for equivalent levels of services. It is the intent of the Legislature that the privacy of nonsubsidized families shall be protected in implementing this subdivision.

(i) The department shall develop regulations for addressing discrepancies in the provider rate levels identified through the rate verification process in subdivision (h).

(j) If a childcare provider’s reimbursement rate category could be construed as either full-time weekly or full-time monthly pursuant to Section 18075 of Title 5 of the California Code of Regulations, the alternative payment program, county, or contractor shall reimburse the provider in accordance with either of the following:

(1) The applicable rate category that most closely corresponds to the rate category listed on the licensed childcare provider’s rate sheet.

(2) If the alternative payment program, county, or contractor cannot determine a single applicable rate category from the licensed childcare provider’s rate sheet, or if the license-exempt childcare provider does not have a rate sheet on file, the applicable rate category that results in the higher reimbursement.

(Amended by Stats. 2023, Ch. 41, Sec. 12. (AB 116) Effective July 10, 2023.)