Evaluating the Shift to Enrollment-Based Advance Child Care Payment

Summary

States can gain financial stability and efficiency in their child care subsidy systems and make care more accessible for families by moving from traditional attendance-based payments to enrollment-based advance child care payments. A modern payment platform that brings together eligibility, enrollment, and payment data together in a unified system is crucial to this process. Resultant is well-positioned to guide states through technology readiness assessments and implementation strategies.

The federal government, through the Child Care Development Fund (CCDF), has proposed changes aimed at making the child care system more sustainable. A key change in the CCDF is the adoption of enrollment-based advance child care payments. While the advance payment regulations remain in effect, there’s significant discussion about how and if they will be enforced as individual states evaluate how to best help their children and families.  

The potential shift presents both opportunities and challenges for state child care subsidy systems. While there’s a greater cost to enrollment-based payments, those systems are more sustainable long-term. Additionally, some states use legacy systems that weren’t designed for this payment model and would need to upgrade infrastructure to accommodate it.  

The good news is that states have the power to embrace whichever system fits them best. A trusted partner can be a valuable asset in making that decision with confidence and readiness through evaluating relevant aspects of state systems, citizens, and technology. 

Attendance-based delayed vs. enrollment-based advance payment in child care systems

With a traditional attendance-based payment system, providers are paid after services were delivered based on how many children attended. Essentially, providers are penalized when children didn’t attend consistently, which makes funding somewhat unpredictable. This increases the risk of facility closure and reduces child care options for families.

With an enrollment-based payment system, providers are paid in advance to hold a certain number of spots, regardless of whether children attend consistently. This shift to an advance payment model improves financial stability and access to care for families.

The challenge is that the legacy or custom-built systems used by some states are hardwired to pay after the fact and can’t support advance payments.

The key to success: A flexible, modern payment platform

States can take charge by evaluating their current systems to determine whether they’re equipped to handle enrollment-based payments or if they need upgrades to do so. Today’s advanced payment platforms offer adaptable workflows designed specifically to process payments based on enrollment status, rather than relying solely on attendance records.

Core Features and Capabilities

Modern systems that can process enrollment-based advance chld care payments have the follow features. 

• Integrated data: A modern payment platform brings eligibility, enrollment, and payment data together in one unified system to simplify data access, analysis, and reporting.
• Automated processes: Payments are calculated automatically and accurately to minimize errors while accelerating the process. By connecting this system directly to child care providers’ Child Care Management Systems (CCMS) via APIs, attendance information entered by providers flows seamlessly to the state system. This reduces manual effort and ensures timely, precise payments. 
• Payment adjustments: Mid-month changes in enrollment or eligibility can be difficult to navigate, but technology that provides real-time data updates makes this more manageable. These dynamic tools allow states to quickly adjust payments, whether pro-rating or pausing when a child leaves care, to help maintain fiscal responsibility while building trust with providers. 
• Advanced financial management features: States can closely monitor cash flow, track disbursed funds alongside actual service delivery, and maintain clear audit trails. This transparency safeguards against fraud and ensures compliance with funding requirements. 
• Intuitive portals: Portals enable providers and families to communicate and see enrollment status, payment schedules, and reconciliation details. This creates clarity and reduces administrative burdens. When everyone can access up-to-date information and report changes easily, the entire system operates more smoothly and efficiently.  

Training and Support

Of course, technology is only part of the equation. Training and support for any system change are essential to building confidence in new processes with staff and providers and ensuring adoption. Interactive digital training, help desks, and automated notifications can ease the transition, reduce errors, and empower users to embrace the new system.

Conclusion: Deciding between an attendance delayed or enrollment-based advanced child care payment system

Enrollment-based advance child care payments represent a bold step forward for child care subsidy administration, but it’s not a one-size-fits-all decision. States that invest in modernizing their technology infrastructure and operational practices will be well-positioned to enable this and other innovative capabilities.

To succeed, states need targeted support, whether through federal funding, technical assistance, or partnerships with experienced vendors. With this support, states can assess technology readiness, build real-time data capabilities, and prepare their workforce and providers.

This will allow states to confidently adopt a payment model that strengthens financial stability for providers and improves care access for families. Without this support, states risk delays, errors, and frustration among families and providers.

If your state is planning or considering this shift, now is the time to act. Evaluate your technology readiness, identify gaps, clearly identify business rules, and secure the resources needed to successfully implement enrollment-based advance payments.

Technology can be your state’s greatest ally in this important transformation, especially if you have the support to unlock its full potential.

Resultant can provide you with clear, actionable insights that transform how you leverage data and technology in child care to create impactful, sustainable change.

Contact us today to schedule your complimentary gap analysis!