Republican senators Ted Cruz, Mike Lee and Rick Scott have rolled out the Payment Integrity Act to stop taxpayer-funded childcare from turning into an open ATM for fraud, pushing states to pay providers only after attendance is verified rather than on enrollment claims. The move responds to what they describe as widespread abuse exposed in Minnesota and aims to reverse a federal rule that encouraged pre-payments. This bill seeks to make accountability the default and to safeguard funds for kids who actually show up.
The core change is straightforward and firm: payments would follow proof of service, not paperwork alone. That flips the payment model back toward common-sense accountability and away from advance checks that can be exploited. From a Republican perspective, this is about protecting taxpayers and the children who depend on real care.
“Programs in Minnesota for welfare and childcare were designed to channel resources into protecting vulnerable children, but were treated like an open ATM by criminals,” Cruz told Fox News Digital. That blunt assessment chased headlines and set the tone for the new legislation, which treats fraud as not just an administrative problem but a moral one. The senators argue states must stop paying for empty rooms and start paying for verified care.
The Payment Integrity Act would explicitly undo a 2024 Biden administration policy that encouraged states to make pre-payments to childcare providers before attendance checks were completed. Under the proposal, attendance-based billing becomes the rule and pre-payment the exception. Republicans are pitching this as restoring fiscal discipline and cutting a clear avenue for bad actors.
Senators also pointed to recent hearings where testimony and local reporting uncovered apparent sham operations and suspicious claims. Cruz highlighted a photo of the “Quality Learing Center” during one hearing as an example of how phony setups can be used to siphon public money. Those visual illustrations helped make the argument that the problem was happening inside American cities, not somewhere distant.
“There are few crimes more morally repugnant than stealing from vulnerable children. Every dollar stolen is a meal not eaten, a doctor’s visit missed, and a future diminished,” Cruz said, laying out the ethical stakes in plain terms. That line underscores the GOP framing: fraud is an attack on families and on taxpayers. Lawmakers want systems that detect abuse fast and cut it off completely.
Co-sponsor Mike Lee has been equally direct, saying support must reach actual children. He warned that fake operations are “stealing funding from the ones who are actually taking care of America’s children in need.” Lee added the bill will require funding tied to real attendance and give states the authority to pay retroactively instead of advancing funds, a fix he says should have been law long ago.
Health and Human Services has already enacted a rule moving toward attendance-based billing, a step the senators want codified. HHS officials tied that policy change to the same Minnesota revelations lawmakers have spotlighted, arguing the new approach makes fraud “harder to perpetrate.” Republicans view codification as a durable, enforceable way to lock in responsible practice across states.
The Payment Integrity Act would amend the Child Care and Development Block Grant Act to include attendance-based billing as a legal requirement. “Nothing in this subchapter shall be construed to require a lead agency to make a payment to a child care provider prior to the provision of child care services,” the bill reads, directly reversing the pre-payment structure critics blame for recent abuses. From here the measure will face committee steps and debate, with GOP backers pitching it as plain accountability and common sense governance.
