DHS outlines overhaul of child-care licensing: risk-based scoring, shorter inspections and revised standards

The Minnesota Department of Human Services on Wednesday outlined a multi-part plan to modernize child-care licensing that aims to prioritize high-risk health and safety items, shorten routine inspections for stable providers and simplify many prescriptive standards for centers and family child-care homes.

Larry Hosch, manager for the Office of Inspector General's policy and legislative team at DHS, told the House Children and Families Committee the project originated from a 2021 legislative directive that required DHS to contract with the National Association of Regulatory Administrators (NARA). "This project came from the 2021 legislature, directing the department to contract with the national association of regulatory administrators," Hosch said as he introduced three components: a weighted risk system, a key-indicator approach to enable abbreviated inspections, and revised licensing standards.

The weighted risk system would assign each regulation a weight from 1 (low risk) to 10 (high risk) based on stakeholder input, giving licensors objective guidance about which violations most threaten children's health and safety. Hosch said DHS surveyed roughly 1,295 family child-care respondents and nearly 1,000 child-care center respondents; most respondents were providers. For family child-care the lowest-weighted regulation cited in the presentation was 1.91 (an application-residence requirement) and the highest was 9.52 (prohibiting alcohol or drug use while caring for children). For centers the average weight shown was 6.72, with a low of 2.67 and a high of 9.39 (prohibitions on corporal punishment, emotional abuse or restraints).

Under the plan, low-risk items would typically trigger documented technical assistance rather than licensing action; moderate items might lead to correction orders; and high-risk items would prompt formal licensing actions. Hosch said DHS used the top 10th percentile of weighted items to determine the high-risk category and that the system is intended to increase consistency among licensors statewide.

DHS also described an abbreviated inspection model that would inspect a smaller subset of regulations for providers who meet eligibility criteria. Brandon Tice, a DHS project lead, said the abbreviated visit would combine: (1) a set of key indicators selected because compliance predicts broader compliance, (2) all high-risk rules, (3) federally required rules under the Child Care and Development Block Grant (CCDBG), and (4) five random rules to reduce predictability. "Instead of a licensor visiting a provider and having to go through all 300 of those regulations ... under an abbreviated inspection they would be subject to under 100 regulations," Hosch said. DHS estimates more than half of providers could qualify for abbreviated inspections, with eligibility tied to factors such as years licensed and absence of prior high-risk violations or substantiated maltreatment findings.

Brandon Tice told the committee that federal CCDBG requirements include an annual, unannounced inspection obligation; DHS staff said abbreviated inspections would not eliminate annual federal obligations and that providers qualifying for abbreviated visits still would face periodic full inspections (for example, every three years DHS envisions at least one full inspection to confirm continued compliance).

DHS presented a second draft of revised licensing standards that trims prescriptive requirements and reduces documentation burdens. Hosch said revisions between draft one and draft two included simplifying cleaning and documentation rules, removing a broad prohibition on scented products in favor of case-by-case accommodations, clarifying pet and pest language so routine, small occurrences are not treated as reportable pest events, and removing a broad lead-soil testing requirement while retaining radon testing.

On radon, DHS presenters said the draft would require an initial radon test within two years of licensing or implementation and then testing every five years thereafter, with mitigation required if levels exceed the Department of Health threshold (as discussed by DHS staff, that threshold is the commonly used 4 picocuries per liter). Committee members raised cost and access concerns for mitigation; DHS acknowledged mitigation can be expensive and said mitigation funding would be a legislative policy decision.

The department proposed changes specific to family child care, including two revised license classes: a B3 license allowing up to 10 children (all under school age) and a revised C3 that would allow up to 18 children, contingent on training and other qualifications. Other family child-care adjustments include alternatives to continuous outdoor fencing (a written supervision safety plan) and elimination of prescriptive fall-zone material/depth requirements.

For centers, the draft loosened some staff-qualification pathways and expanded the definition of acceptable education so more postsecondary coursework (for example, in science or math) could count toward staff qualification. The draft redesignates "experienced aides" into tiers (Aid 1/Aid 2) and reduces the experience-hour requirement for a higher tier from 4,160 to 2,080 hours.

DHS also proposed a concept for a statewide, foundational "child-care basics" training, free and developed by DHS, that could count toward required in-service hours and would cover core topics such as mandated maltreatment reporting.

Advocates and providers told the committee they support many modernization goals but warned about timing, implementation and unintended consequences. Claire Sanford, government relations chair for the Minnesota Child Care Association, said the weighted risk system is "probably the thing providers are most excited about because it will offer more transparency and fairness for both families and providers" and urged DHS to deploy that piece as soon as IT systems allow because licensing records already affect providers' liability insurance availability and premiums.

Cindy Cunningham, a Saint Paul family child-care provider and public policy chair for LeadingCare, said the process has strained providers. "The heavy handedness of regulations, the poor communication with programs and the inconsistent implementation in the counties is what is driving many programs out of business," she told the committee, urging clearer engagement and translation of materials for non‑English‑speaking providers.

Erica Moss of Think Small suggested a broader rethinking of how licensing and quality systems fit together, proposing that licensing focus narrowly on physical health and safety while other quality supports and professional standards be advanced through different mechanisms.

Committee members asked DHS for timelines and IT requirements for implementing the weighted risk system and the provider hub; DHS staff said the risk system is ready conceptually but depends on provider‑hub and licensing IT functionality and that they will provide a timeline in response to members' requests. Several members also urged legislative consideration of financial supports for providers facing mitigation or equipment costs that could be barriers to compliance.

DHS stressed the draft standards remain drafts and that additional stakeholder engagement will continue through the spring and early summer before any proposal is finalized. Committee members and advocates indicated they expect further hearings and possible legislative follow‑up before any statutory changes are advanced.

Ending: DHS said the modernization work will continue with additional public engagement; committee members requested written follow-up on IT timelines for the provider hub, radon threshold/mitigation guidance and how federal inspection requirements will affect abbreviated inspections.