WASHINGTON, D.C. — The U.S. Department of Health and Human Services announced Monday it is rescinding several child care payment rules adopted in 2024 that allowed states to reimburse child care providers based on enrollment rather than verified attendance.

According to HHS, the changes reverse Biden-era provisions under the Child Care and Development Fund program that required states to issue payments before child care services were delivered and without confirming whether children attended. Federal officials said the revisions are intended to strengthen oversight and reduce the risk of improper payments in federally funded child care programs.

Under the updated guidance, states will once again be permitted to require attendance verification before issuing payments and to pay providers after care has been delivered rather than in advance. The changes also remove federal preferences for guaranteed contract slots, allowing states greater flexibility to use parent-directed vouchers instead.

HHS officials said concerns about fraud prompted the rollback, citing investigations into child care programs in some states. The department also noted that additional oversight measures are being implemented, including enhanced verification requirements and a national fraud-reporting system. HHS reported receiving more than 245 potential fraud reports since launching a child care tip line in late December.

The rule changes will be subject to a 30-day public comment period before being finalized. HHS stated it will continue working with states to ensure child care funds are used for eligible families and services are properly documented.