Why did reimbursement rates go down?

Each year USDA must adjust meal reimbursement rates and the administrative reimbursement rates for sponsors of homes according to the Consumer Price Index (CPI) change during the prior 12 month period. Click here to view this year’s rates.

The CPI is broken down into many sub-categories, and Congress has determined in the law which parts are used to adjust rates in the CACFP.  Rates for Family Day Care Home meals are based on the “food at home” series of the CPI for All Urban Consumers.  Rates for centers are based on the “food away from home” series of the CPI for All Urban Consumers and the administrative reimbursement rates for sponsors of homes are based on all items of the CPI for All Urban Consumers added together.

This year, the CPI on all items increased 1%, which resulted in a $1 (rounded) increase to admin rates for sponsors of homes.   And the CPI for food away from home showed a 2.64% increase, which resulted in higher meal reimbursement rates for meals served by centers.

Unfortunately, the food at home series showed a drop of 0.69% over the same period.  This means that, by law, USDA had to adjust meal reimbursement rates downward for Family Day Care Homes.  Because any percentage-based decrease affects the higher reimbursement rates more than the lower rate, the Tier 1 rates serving the neediest children dropped more in real dollars than the smaller Tier 2 rates.  Some of the differences in the Tier 2 rates were entirely erased by rounding to the nearest cent, because they were already so small.

There’s no easy way to break the news to providers that they will receive less money for the same food, particularly when most of us aren’t actually seeing that food prices have dropped at all in the last year.  The only way to keep this from happening again is to urge Congress to change the law, prohibiting any future downward adjustment in reimbursement rates and admin rates.  This is not something that a sponsor, a state agency, or even USDA can change.

Child Nutrition Reauthorization hasn’t moved forward yet, so there may still be opportunity to urge your Congressperson to ensure that the good nutrition that CACFP provides stays accessible to the neediest children.  It certainly can’t hurt to let them know how much more difficult this makes getting healthy food to our most underserved kids.  Go here to find out how to contact your Senators and Representative.

9 Responses to Why did reimbursement rates go down?

  1. Joan LaRocque says:

    Natalie,
    Good job and explanation….Yes, it is going to be difficult, maybe not right away with Providers so much, but definitely when we start training about the new Meal Patterns….

    Thank you, MM for all you do….

  2. LOY says:

    I think is better idea that all parents bring or paid for food and all frustration can go ,,,,bc the government do sent care anything about it……only spend in war….that is my opinion with all respect to Everybody …..

  3. jenny720 says:

    Reblogged this on CCRC Technology BLOG and commented:
    Operating a Child Care business is a hard business sector to be successful in year in and out. In Ohio, Step Up To Quality has moved the child system to quality care, CACFP is moving participants to quality nutritional practices, but all have added a level of administration that is almost impossible for chidl care professionals to bear.
    The CCRC wants to help and has started providing services that support many of the administrative heavy tasks placed upon providers. CACFP for centers and family child care homes, ASQ:3, assistance in receiving a star rating or becoming highly rated (cohort groups) and many other supports.
    It is impossible to cut the red tape or control what the federal government decides is “appropriate” to operate a child care program, but partnering with the CCRC is one way to take the administrative burden off of you so that you can focus on running a high quality program. If you have questions on how we can assist you, please call 440-960-7187 and ask for the program support you need.

    Here is information on this year’s CACFP reimbursement rates and how the federal government has set the new rates for the 2017 fiscal year.

  4. Carrie Dyster says:

    This is very helpful! Thanks to Natalie!​

    On Wed, Aug 3, 2016 at 4:19 PM, Minute Menu Blog wrote:

    > Natalie Clark posted: “Each year USDA must adjust meal reimbursement rates > and the administrative reimbursement rates for sponsors of homes according > to the Consumer Price Index (CPI) change during the prior 12 month period. > The CPI is broken down into many sub-categories, and” >

  5. Michelle Buchanan says:

    Thank you so much Natalie for explaining this. Very Helpful

    I’m trying to figure out a way to break the news to our providers. 😦

  6. Kaye White says:

    When will we be advised what the new rates are? We definitely will have to ‘tighten the belt’ to provide the level of meals that we have been providing.

    • Natalie Clark says:

      Hi, Kaye,
      There’s a link in the first paragraph of the article to the new rates for both family day care homes and centers. If you scroll to the end of the .pdf there is a chart that easier to read.

  7. Beverly A Lee says:

    Blee I will have to tighten my food budget;)

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