A State-by-State Summary of Prospective Payments Implementation Approaches

Last year, the federal government updated Child Care and Development Fund (CCDF) regulations to increase affordability, access, and provider stability. A key provision requires that states transition to paying providers prospectively (in advance) and based on enrollment rather than attendance — aligning with how private-paying families typically pay (88% do so in advance).

Read our April blog about the federal regulatory changes for prospective payments.

States have until August 1, 2026, to implement these changes, allowing for transitional planning and waivers. Implementation is currently uneven, and state approaches vary widely. Some states (like Maryland, Utah, Hawaii, Kansas, Wisconsin, North Dakota, South Carolina, and Texas) already pay prospectively; others still face technical and budgetary hurdles that they must overcome to comply with the new regulations.

During the first quarter of 2025, we conducted a systematic review of the 2025-2027 approved CCDF State Plans, Appendices, waivers, and other publicly available documentation to learn more about provider payment practices. The purpose of this review was to learn more about: 1) the policies and practices in states that are already in compliance with the payment requirements, and 2) how states that do not currently pay providers in advance are approaching the implementation of new practices.

To contextualize our learning from the State Plan and documentation analysis, we spoke with experts to understand the real-world challenges and opportunities from the perspectives of families, providers, and administrators. We also engaged with a state that recently implemented prospective and enrollment-based payments to learn from and document their experience.

Most states have not implemented prospective payments and have received waivers to allow additional time for implementation. Six states were paying providers prospectively at the time of plan submission (Hawaii, Kansas, Maryland, North Dakota, Utah, and Wisconsin), two have implemented since (South Carolina and Texas), and 42 states do not yet meet the new requirements

Implementation timelines vary. Of the 31 timelines that had sufficient detail to analyze, the minimum implementation time was 5 months, the maximum was 25 months, and the average was 13 months. Many places plan to begin focusing on implementation in the summer of 2025.

Many states already pay based on enrollment. Upon submission of the 2025-2027 State Plan, 24 states were paying based on enrollment, 20 were not, and seven said it was “impracticable.” We have not observed prospective payments implemented without payment based on enrollment. But at least one state (Maryland) that pays prospectively administers “enrollment”-based payments that look much more like attendance-based payments in practice and can be burdensome for families and providers.

Many places are turning their focus to implementation now and are looking for information on what’s been done in other states. To support this process, we created two resources that offer a state-by-state comparison of implementation decisions made in states that already pay providers prospectively.

We made a resource that details current (as of September 12, 2025) state-by-state policies and practices regarding enrollment, payment, verification, reconciliation, and changes/edge cases.

From this, we’ve created a table (below) that provides a summarized view of the implementation choices of states that currently pay providers in advance, which is more in alignment with private market payment practices.

The information presented is sourced from public-facing resources.

Important note: This information has limitations; it may not be up-to-date at the time someone is viewing or reflect how all processes operate in practice, and has not been validated with state officials. We recommend using this information as a starting point for conversations and your own research, not as a manual.

Provider payment reform is not only an administrative fix—it’s a systemic intervention that brings public sector practices into alignment with the private market. Successful implementation is key to supporting the “iron triangle” of sustainable child care: full enrollment, full fee collection, and revenue that covers the cost of care. A stronger field means more care options for families that align with their preferences, fewer wait lists for spots in desired programs and locations, and more programs that offer high-quality services to children and families

We aim to engage with a broad group of states representing diverse political and operational environments as they implement these changes. We welcome outreach from states in early, middle, or late stage implementation work on prospective payments. What is working (or not) for state administrators? For different types of providers? For families? Are we seeing an increase in spots available? In participating children? If you have something to share, we have something to learn.

Please contact us at NPLwork@newamerica.org to speak with our project team about your experiences implementing CCDF payment changes, or if you may be interested in one of our (no cost) implementation teams working with you on this effort.