Feasibility Study: Calculating Meal Claiming Error in Family Day Care Homes That Participate in CACFP Using State Monitoring Review Data

We explored the feasibility of using existing data from state monitoring reviews (SMRs) – a process designed to assess operations and provide real-time technical assistance to family day care homes (FDCHs) operating the Child and Adult Care Food Program (CACFP) – to estimate the rate of improper payments in those operations.

Key Findings

Flexibility in these reviews and the information they report across states, while beneficial for their main purpose, made the resulting data unusable for estimating a national improper payment rate.
State agencies have flexibility under current CACFP guidelines regarding how they conduct SMRs and document findings. These allowable state-level variations result in differences in the available data and documentation across states.

Why did we do this study?

The Payment Integrity Information Act of 2019 (PL 166-117) requires FNS to estimate improper payments in the CACFP. One potential source of improper payments that has proven difficult to assess are errors in claiming meals for reimbursement (“meal claims”) in family daycare homes. We conducted several previous studies to test methods to assess improper payments in FDCHs. All these methods were considered non-viable.

This study tested the feasibility of using data collected through CACFP SMRs and asked:

Can data collected through SMRs be used to produce accurate measures of the rate of improper payments in each state?
If so, can the state estimates be combined to produce an accurate national estimate of improper payments in FDCHs enrolled in CACFP?

Why did we test this method?

Using SMR data to estimate improper payments would allow us to use existing data instead of collecting new data.
FNS regulations provide a framework for conducting SMRs, which means the SMR process in every state has the same key elements.

How did we do this study?

First, seven state agencies provided SMR data to our study team. Second, experts on the study team reviewed data from one hundred thirty nine SMRs. Finally, the study team classified errors and determined their value in dollars. — Figure 1. Methods used for this study.

State agencies provided data from SMRs conducted between July 1, 2019 and Sept. 30, 2022.

Subject matter experts on the study team reviewed each SMR for descriptions of errors, including states’ official findings and additional documentation associated with the SMR process. The classification system used in this study is unique to the study. The value of meal claim errors was assessed based on FNS reimbursement rates. The final report for this study is available upon request.

The methods assumed that each unit of aggregation (providers or sponsors) was representative of the population of that unit. This allowed provider-level improper payment rates to be combined at the sponsor level and allowed sponsor-level improper payment rates to be combined at the state level. The methods also assumed that the month of the SMR was representative of all other months in the study period. — Figure 2. Shows how the value of meal claim errors in each study state were combined and weighted to produce improper payment reates for providers, sponsors, and states during the entire 36-month study period.

Additional Information

State experts visit each sponsor every three years. Sponsors with more than one hundred providers are visited every two years. State experts visit 5-10% of the providers supported by each sponsor under review. At least 15% of provider visits are unannounced. State experts also compare a “test month” of meal claims to sponsors’ and providers other administrative records to assess their accuracy. — Figure 3. Overview of the state monitoring review (SMR) process, which is described in detail in the CACFP requirements.

SMRs are critical opportunities for state agencies to provide real-time technical assistance to sponsors and providers. Throughout the process, state monitoring personnel identify mistakes and help providers to address them. Those interactions are documented on paper or electronic forms. State agencies use this documentation to support the serious deficiency process, which ensures that CACFP is implemented properly.