Payment Integrity Act

Bill Number

S. 3862

Origin Chamber

Senate

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-02-12: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Last Updated

2026-02-26T03:53:25Z

AI-Generated Summary

Purpose

The Payment Integrity Act (S. 3862) aims to improve the accuracy and accountability of federal child care funding by requiring states to base payments to child care providers on actual attendance of children in programs, rather than just enrollment. This helps prevent overpayments and ensures taxpayer dollars are used effectively for services actually provided.

Key Provisions

• Attendance-Based Payments: States must include in their child care plans an assurance that payments to providers under the Child Care and Development Block Grant (CCDBG) program will be based on verified attendance, not enrollment alone. Verification must use attendance records or another reasonable method.
• Timing of Payments: States are not required to pay providers before child care services are delivered. Payments can be made after the services have been provided.

Significant Changes to Existing Law

• Amends Section 658E of the CCDBG Act (42 U.S.C. 9858c) by replacing the existing subparagraph (S) in subsection (c)(2) to mandate attendance verification for payments, shifting from a more flexible approach that may have allowed enrollment-based billing.
• Adds a new subsection (e) clarifying that pre-service payments are not required, providing states with flexibility in payment timing while emphasizing post-service reimbursement.

Potential Impacts

• On Government Agencies: Federal and state agencies administering child care grants (like the U.S. Department of Health and Human Services) may see reduced improper payments and better program integrity, potentially leading to more efficient use of the roughly $8 billion annual CCDBG funding. States could face administrative costs for implementing verification systems.
• On Citizens: Families relying on subsidized child care may experience more stable provider availability if payments align better with actual usage, but could face disruptions if providers adjust due to delayed or attendance-tied reimbursements. Child care providers might receive fairer compensation tied to real service delivery, reducing financial risks from no-shows.
• On International Relations: No direct impacts, as this is a domestic funding and child welfare policy.

Main Stakeholders Affected

• States and Lead Agencies: Responsible for updating child care plans and payment systems to comply with attendance verification.
• Child Care Providers: Private and public providers receiving CCDBG funds, who must track and report attendance to receive payments.
• Families and Children: Low-income families using subsidized child care, who benefit from accurate funding but may be indirectly affected by any changes in provider participation.
• Federal Government: Oversees CCDBG compliance and could achieve cost savings through reduced fraud or waste.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens fiscal controls in federal grant programs without altering eligibility rules, aligning with broader efforts to combat improper payments under laws like the Payment Integrity Information Act of 2019. No challenges to due process or equal protection are evident, as it focuses on administrative procedures.
• Constitutional: Does not raise significant issues, as it involves conditional federal funding to states, which is permissible under the Spending Clause (Article I, Section 8) of the U.S. Constitution.
• Political: Introduced by Senators Cruz, Scott, and Lee (Republicans) in the 119th Congress, it emphasizes accountability in social spending, potentially appealing to fiscal conservatives while supporting child care access. Referred to the Senate Committee on Health, Education, Labor, and Pensions for further review, it could influence future appropriations debates.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Cruz, Ted [R-TX]

Cosponsors (3)

Sen. Scott, Rick [R-FL], Sen. Lee, Mike [R-UT], Sen. Hagerty, Bill [R-TN]

Recent Actions

• 2026-02-12: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
• 2026-02-12: Introduced in Senate

Bill Versions

• Payment Integrity Act — issued 2026-02-12 — PDF (2 pages)