The repeal, which requires a 30-day public comment period, would close loopholes that allow states to distribute federal social services funds without the documentation, according to the U.S. Department of Health and Human Services (HHS).
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” HHS Deputy Secretary Jim O’Neill said in a statement. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”
“Every minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who prey on our differences.”
Upfront payments will no longer be required. States may also pay providers after care is delivered.
Voucher flexibility will return to the program, according to the department. States will no longer be steered toward contracts over parent-directed vouchers, restoring parental choice to the programs.
“Congress appropriated this funding to support working families and ensure children have safe places to grow and learn,” Health Secretary Robert Kennedy Jr. said in a statement. “Loopholes and fraud diverted that money to bad actors instead. Today, we are correcting that failure and returning these funds to the working families they were meant to serve.”
HHS has taken several actions to address the fraud in recent weeks, including opening a fraud-reporting hotline and email address at childcare.gov.
Since launching the hotline, the Administration for Children and Families has received more than 245 reports of potential fraud, according to the department.