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Block Claims and Unannounced Visits - Memos

Food and Nutrition Service

Memorandums on Block Claiming and Unannounced Visits

This document contains the following current Child and Adult Care Food Program memorandums relating to the documentation of “block” claims at sponsored sites and the requirement to conduct unannounced visits to sponsored sites.

DATE: August 27, 2007

MEMO CODE: CACFP 15-2007

SUBJECT: Documentation of Block Claims Submitted by Sponsored

Child Care Centers and Family Day Care Homes

TO: State Agencies

Child Nutrition Programs

All States

Special Nutrition Programs

All Regions

Effective October 1, 2005, sponsoring organizations were required to conduct unannounced facility reviews in response to a facility’s “block” claim. On July 1, 2005, FNS issued CACFP Policy # 03-05, “Documenting Reasons for Block Claims by Child Care Centers and Day Care Homes”. That guidance permitted sponsoring organizations to evaluate and document the reason for a block claim detected during an unannounced review prior to the facility’s first submission of a block claim during the current review year. The guidance, which allows for the efficient use of sponsor resources while maintaining this important integrity requirement, was extended on May 23, 2006 (CACFP Memo 12-2006).

FNS had originally limited the duration of this provision to allow time to identify any unintended consequences associated with its application. To date we have not been made aware of any. Therefore, we are extending this guidance indefinitely, meaning sponsors may continue to document reasons for a block claim observed in the facility’s records during an unannounced review, prior to the facility’s first submission of a block claim during the current review year. This guidance, including clarifications regarding the definition of “current review year” and what is considered to be “acceptable documentation”, will remain in effect unless it becomes necessary to reconsider.

State agencies should direct any questions concerning this guidance to the appropriate FNS Regional Office. Regional offices may contact FNS Headquarters with questions.

STANLEY C. GARNETT

Director

Child Nutrition Division

May 23, 2006

MEMO CODE: CACFP 12-2006

SUBJECT: Issues Relating to Block Claims Submitted by Sponsored Child

Care Centers and Family Day Care Homes

TO: State Agencies

Child Nutrition Programs

All States

Special Nutrition Programs

All Regions

Effective October 1, 2005, sponsoring organizations were required to comply with new regulatory provisions pertaining to the conduct of unannounced facility reviews in response to a facility’s “block” claim. On July 1, 2005, we issued CACFP Policy # 03-05, “Documenting Reasons for Block Claims by Child Care Centers and Day Care Homes.” That guidance permitted sponsoring organizations to meet the requirement for an unannounced follow up review, under certain circumstances, by evaluating and documenting the reason for a block claim prior to the facility’s first submission of a block claim during the current review year. However, the July 1, 2005, guidance was effective only through the end of Fiscal Year 2006. This memorandum addresses the extension of the original guidance, as well as several other questions that have arisen regarding implementation of the block claim requirement.

Extension of July 1, 2005, Guidance

This memorandum extends the July 1, 2005, guidance through fiscal year (FY) 2007 (i.e., through September 30, 2007). That means that sponsors may continue to document reasons for a block claim observed in the facility’s records during an unannounced review. The facility-specific documentation collected during the unannounced review will relieve the sponsor from having to conduct an unannounced follow up review, in response to that facility’s submission of a block claim in its meal counts, for the remainder of the current review year.

Definition of the “Current Review Year”

We have been asked whether the “current review year” must be defined as the Federal fiscal year.

The answer is “no”. In our guidance, we have been using the Federal fiscal year for illustrative purposes, because we believe that many State agencies (SAs) define the Federal fiscal year and the review year as being the same. In fact, the “current review

State Agencies

Page 2

year” can be any consecutive 12-month period defined by the State agency (SA) or sponsor (provided that the sponsor’s definition is not prohibited by the SA), including:

• The Federal fiscal year;

• The State fiscal year;

• The calendar year;

• A 12-month period beginning on the provider's first day of operation; or

• Any other 12-month period defined or agreed to by the SA. 

However, regardless of how the SA defines the current review year, the SA must be able to track the sponsor’s facility reviews and determine that the sponsor has met all review requirements set forth in § 226.16(d)(4)(iii). 

Use of “Checklists” by Sponsor Monitors

We have been told that at least one SA has provided its sponsoring organizations with a “checklist” that sponsor monitors can use in determining whether the facility had a valid reason for submitting a block claim.

We wish to reiterate what we stated in training, and in the previous guidance issued on July 1, 2005. “Valid reasons” for the existence of a block claim that would exempt the sponsor from conducting additional unannounced follow up reviews for the 12-month period are limited to those reasons discussed in the preamble to the interim rule (69 FR 53501, September 1, 2004); in the questions and answers on that rule issued on September 1, 2004, and December 23, 2004; and in the training materials on the second interim rule that were forwarded to SAs on July 1, 2005.

Whenever a sponsor monitor documents valid reasons for a facility’s submission of a block claim, those reasons must be specific to the facility, and must be well-documented. Thus, a checklist with a mark next to one or more reasons (e.g., “cares for sick children”) is not adequate to document that there is a valid reason for the block claim, since it can be completed without careful thought by the sponsor monitor. There must be additional explanation of why the monitor believes this to be a valid reason for this facility’s block claim. Thus, if a monitor checks “provider accepts sick children”, the monitor must also note in the remarks section of the form that he/she has examined the provider’s written policy regarding caring for sick children, or has observed sick children in the home during a review, or has some other reason to believe that this is a valid excuse for the facility to have block claims.

State Agencies

Page 3

Starting Date of the 60-day “Clock”

Finally, we have been asked about a discrepancy between the wording in the preamble and the regulatory language at § 226.10(c)(3) of the second interim rule. The preamble states (69 FR 53519, September 1, 2004) that the sponsor is required “to conduct an unannounced review of the facility within 60 days of receiving the block claim from the facility.” (emphasis added) The regulatory language, however, states that the sponsor must conduct an unannounced review “within 60 days of the discovery of the block claim.” (emphasis added)

At the time that the regulation was written we assumed that, due to sponsors’ desire to pay facilities quickly, very little time would elapse between the receipt of a facility’s meal count and the discovery of a block claim. However, some SAs have told us that this is not always the case, that the beginning and ending dates of the 60-day period are difficult to determine, and that additional clarification is needed in the final rule. In advance of that clarification, some SAs have promulgated policies and procedures to promote uniform understanding of the starting date of the 60-day “clock” within their State. For example, one State agency requires the sponsor to date stamp the meal count upon receipt, and use that as the start of the 60-day “clock” if a block claim is subsequently identified.

We support all such SA efforts to promote consistent implementation within their State, even though that they may result in inconsistencies between States. In order to promote National uniformity in the final rule, we intend to clarify that the 60-day clock must start on the day that the facility’s meal count is received by the sponsoring organization.

We appreciate all of the efforts that SAs and sponsoring organizations have made to properly implement this important integrity requirement. Please let us know if there are any questions concerning this guidance.

STANLEY C. GARNETT

Director

Child Nutrition Division

July 1, 2005

SUBJECT: CACFP Policy # 03-05: Documenting Reasons for Block Claims by Child Care Centers and Day Care Homes

TO: State Directors

Child and Adult Care Food Program

All States

Regional Directors

Child Nutrition Programs

All Regions

Effective October 1, 2005, sponsoring organizations must comply with new regulatory requirements pertaining to conducting unannounced reviews of facilities as a result of a “block” claim. A block claim is a claim with no variation in meal counts, for any single meal type or combination of meal types, for any continuous 15 day period within the claim month. The purpose of this memorandum is to provide additional guidance regarding the conduct of the unannounced follow up reviews required within 60 days of the submission of a block claim.

Sponsors must conduct an unannounced follow up review each time a facility submits a block claim. However, if a sponsor is able to determine and document that there is a valid reason for the block claim, the sponsor is not required to conduct another “block claim related” unannounced follow up review of the facility for the remainder of that annual review cycle. We have determined that the intent of this requirement can be met, under certain circumstances, by permitting sponsors to evaluate and document the reason for a block claim prior to its submission. This will enable sponsoring organizations to provide effective oversight of Program integrity, while also promoting efficient use of sponsor resources.

Therefore, beginning with reviews conducted on or after August 1, 2005:

• if a sponsor conducting an unannounced review of a facility observes a block claim in the facility’s meal/menu records,

• and the sponsor is able to determine and document that a valid reason exists for the block claim,

• then the sponsor will be exempt from conducting the follow up review, normally required to be conducted within 60 days of detecting the block claim, for the remainder of the current review year.

CACFP Policy # 03-05 Page 2

It is important to note that this guidance applies only to situations where the sponsoring organization determines the cause of a block claim during an unannounced review conducted prior to the facility’s first submission of a block claim during the current review year. If a sponsor receives a meal count/claim from a facility that includes a block claim, the cause of which has not been determined prior to its submission, the sponsor must conduct an unannounced review of the facility within 60 days of receipt of its meal count/claim.

It is also important to clarify the meaning of “the remainder of the current review year”.

To provide some relief to sponsors in the initial stages of implementation, if a block claim is determined to be valid during August or September of 2005, the sponsor is exempt from conducting “block claim related” unannounced reviews through the remainder of the current review year, or for the remainder of a review year ending on September 30, 2006. Thus, if the review year runs from October 1, 2005-September 30, 2006, and a facility’s block claim is determined to be valid in August or September of 2006, the sponsor is exempt from conducting a block claim related unannounced review of that facility until another block claim is detected on or after October 1, 2006.

We would like to stress that “valid reasons” for the existence of a block claim that would exempt the sponsor from conducting additional unannounced follow up reviews for the 12-month period are limited to those reasons discussed in the preamble to the interim rule (69 FR 53501, September 1, 2004); in the questions and answers on that rule issued on September 1, 2004, and December 23, 2004; and in the training materials on the second interim rule that are being forwarded to State agencies in the near future. As is the case when sponsor monitors document a legitimate reason for submission of a block claim identified by an edit check, the reasons for a block claim identified prior to the submission of a block claim must also be specific to the facility, and must be well-documented.

We intend this option to allow for the most efficient use of sponsor resources, consistent with the need to properly implement this important integrity requirement. Please let us know if there are any questions concerning this guidance.

STANLEY C. GARNETT

Director

Child Nutrition Division

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