Emergency Rule Reduces Payment Rate to Legally Exempt Child Care Providers with Training

Is this Legal? Good Policy?

November 2, 2009

Author(s): Susan C. Antos, Stephanie Scalzo

After years of making strides to improve the quality of all types of child care, the Office of Children and Family Services (OCFS) has taken the puzzling step of reducing the payment rate to legally exempt providers who enhance their skills by engaging in ten hours of professional development per year.  This payment reduction was made by emergency rulemaking filed in the New York State Register on June 3, 2009 which was readopted by an emergency filing again on September 30, 2009. Empire Justice Center is concerned with the adverse effect this reduction will have on families if this emergency rule is adopted as a permanent rule. Not only does this seem like bad policy, the action is of questionable legality.

Legally exempt child care providers are not subject to the intense oversight afforded licensed child care such as child care centers and family child care providers.  Legally-exempt family providers care for either one to two children or more than two children for less than three hours per day in a residence outside the child’s own home.  Legally-exempt in-home providers care for the child within the child’s own home. 18 NYCRR § 415.1.

Before 2007 there was only one standard market rate for legally-exempt family child care and in-home child care providers.  The established market rates for legally-exempt child care providers were set at 70% of the rate for registered family day care providers. 05-OCFS-LCM-17, p. 2.  An enhanced reimbursement rate was created in 2007 for legally exempt family and in-home child care providers who participated in a minimum of ten hours of approved training annually.  30 N.Y. Reg. 2 (Oct. 24, 2007).  The newly established enhanced rate was set at 75% of the applicable registered family day care market rate, and at the same time, the standard rate was reduced to 65% of the registered family day care rate.

OCFS stated these enhanced rates were intended to keep subsidized families from losing their child care arrangements or being unable to find appropriate child care. 30 N.Y. Reg. 5 (Oct. 24, 2007).  “Avoiding such results is important because it can be detrimental to a child’s development to experience disruption in care or to receive substandard or no care at all.” Id.

The enhanced rates had been in effect for no more than two years when OCFS enacted an emergency rule effective May 15, 2009 reducing the enhanced market rate from 75% of the rate for registered family day care providers to 70%.  31 N.Y. Reg 3 (June 3, 2009).  This is the percentage used to  determine market rate for all legally exempt providers back in 2005.  The multiplier now used to determine the enhanced rate for legally exempt providers is now the same rate used to determine 2005 rates.  The result of this is that legally exempt providers in a number of counties, who engaged in training to improve their skills, are seeing a reduction in their reimbursement rate.

The chart below compares the 2007 and 2009 rates for registered family day care, legally exempt providers without training and legally exempt providers with training who were caring for children below 18 months of age.  All legally exempt providers without training received an increase; family child care providers received increases or remained the same.  Legally exempt providers with training in New York City suffered an $8 per week reduction.  Legally exempt providers with training caring for an infant in Albany, Dutchess, Orange and Ulster counties lost three dollars per week while their untrained counterparts got a $6 per week raise. In 45 rural counties, trained legally exempt providers lost $3 per week while their untrained counterparts got a $3 per week raise.

Emergency Rulemaking
Most regulations are adopted by notice and  comment rulemaking which means that they are proposed, and after a comment period, the state agency must analyze the comments before deciding whether to adopt the rule.  The law allows agencies to adopt rules on an emergency basis when “immediate adoption is necessary to preserve public health, safety or welfare.”  SAPA § 202 (6)(a).

In order to proceed with emergency rulemaking,  an agency must include a statement fully describing the specific reasons for finding that such an emergency rule is necessary and the facts and circumstances on which such findings are based.  “Such statement shall include, at a minimum, a description of the nature and, if applicable, location of the public health, safety or general welfare need requiring adoption of the rule on an emergency basis; a description of the cause, consequences, and expected duration of such need; an explanation of why compliance with the requirements of subdivision one of this section would be contrary to the public interest; and an explanation of why the current circumstances necessitates that the public and interested parties be given less than minimum period for notice and comment provided for in subdivision one of this section.” SAPA § 202 (6)(d)(iv).

When OCFS reduced the legally-exempt enhanced rate by emergency rulemaking, the only statement the agency provided regarding the necessity behind its immediate adoption was to “protect the public health, safety and general welfare by allowing social services districts to address the expanded need for child care services by families affected by the extensive loss of jobs and employment opportunities as a result in the economic downturn of the State and national economy.”  31 N.Y. Reg. 1 (June 3, 2009).  This statement does not describe any emergency or threat to health, safety or welfare which would justify the circumvention of the usual rule making process which would give the public notice of the amendment and an opportunity to comment.  Finally, the OCFS emergency rule promulgation is devoid of any explanation of the process used to attain the reduced enhanced rate.
The adoption of an emergency rule should be limited to those occasions when there is an actual emergency.  Empire State Ass’n of Adult Homes v. Novello, 193 Misc. 2d 543, 751 N.Y.S.2d 694 (Sup. Ct. Albany Co. 2002).  SAPA § 202(6)(d)(iv) requires an agency seeking the promulgation of an emergency rule to fully articulate the circumstances which give rise to the adoption on an emergency basis in order to limit this method of rulemaking to genuine emergencies (see Law Enforcement Officers Union Dist. Council 82 v. State of New York, 168 Misc.2d 781, 784 [Sup.Ct. Albany Co.1995]).

Further, an agency must provide specific reasons for the emergency promulgation. Restating the language of the statute alone is inadequate, “The mere parroting of the statutory phrase ‘the public health, safety, or general welfare’…with no specific facts, demonstrates the total absence of justification for such action.” Brodsky v. Zagata, 165 Misc.2d 510, 629 N.Y.S.2d 373 (Sup.Ct. Albany Co. 1995).

The notice of emergency rule making must give an explanation as to why normal rule making procedure would be contrary to the public interest and why a situation must be dealt with prior to the period of public notice and comment.  Gill v. N.Y.S. Racing and Wagering Bd., 11 Misc.3d 1068(A), 2006 WL 756073 (Sup. Ct. New York Co. 2006).

Where a state agency fails to demonstrate any specific facts or circumstances tending to show that immediate adoption of the rule is necessary or that compliance with regular rule making procedure would be contrary to public interest, emergency rulemaking is not appropriate. Law Enforcement Officers Union, 168 Misc.2d at 784.

The State Administrative Procedure Act also provides that an agency MUST file a notice of proposed rulemaking in accordance with SAPA §202(1) if it wants to file a second emergency rulemaking. SAPA 202(6)(e).  By filing a second emergency adoption on September 30, 2009 without filing a notice of proposed rulemaking, OCFS has again violated  the State Administrative Procedure Act.

It has been than two years since OCFS declared it important to provide enhanced rates so families could obtain quality childcare and not be forced into placing their children in an unsafe environment or leaving their children unsupervised, OCFS now claims that a rate reduction is important to protect the public health, safety and general welfare. These two notions are directly contradictory. Moreover, OCFS does not provide any data that supports the suggestion that reducing payments to trained providers will help meet an expanded need for child care services. 

There Is No Justification for the Reduction of the Enhanced Rate
There is no evidence that the utilization of the enhanced rate imposes any significant adverse fiscal impact on parents or local social services districts that provide subsidies.  As of June 15, 2009, the number of legally exempt providers that had completed ten hours of training totaled 325, with 243 of those providers currently eligible,  having completed their training in the last year.  This constitutes only 1.2% of the legally exempt providers. OCFS Report, on file at www.empirejusticecenter.org (June 15, 2009).

OCFS’s adoption of this emergency rule is a step backward from New York’s efforts to increase the quality of all levels of care and was promulgated by an improper use of emergency rulemaking.  This rule is a huge setback to children of New York in legally exempt care and to those legally exempt child care providers who are trying to improve their skills as providers.

Footnote

1  Stephanie Scalzo was a legal intern in the Albany office of the Empire Justice Center during the summer of 2009.  She is currently a second year law student at the University at Buffalo Law School, SUNY.