MILES CITY- Lisa Mullen has spent nearly a decade building her childcare business in Miles City, caring for nearly 100 children along the way.
Now, she says, she spends just as much time worrying about whether the state reimbursement payments her business depends on will arrive in time to make payroll.
Her story echoes concerns from childcare providers across Montana, who say delayed reimbursements under the state's new Best Beginnings payment system are adding financial strain to an industry already operating on razor-thin margins. They warn the continued delays could leave working families with even fewer childcare options.
Montana continues to face a childcare shortage. Custer County is one of nearly 60% of the state's counties that are considered childcare deserts, where licensed childcare meets less than one-third of the estimated need.
In Miles City, Mullen, owner of Kids Cave Childcare, said the delayed reimbursements have created uncertainty for her business.
"I love what I do. I am passionate about it," Mullen said.
Nearly half of the families she serves receive assistance through the state's Best Beginnings Child Care Scholarship Program, including many foster children.
But since the state launched its new payment system in February, Mullen said reimbursements have become unpredictable.
"Last month I didn't get my payment until the 20th, and recently I'd say it was rarely past the 12th," she said.
Mullen said she has been fortunate to rely on personal savings to cover expenses while waiting for payments.
"I am lucky to have some savings, so borrowing from myself to be able to make payroll," she said.
Providers across Montana say the payment delays are creating financial hardships at a time when many childcare businesses already operate on thin margins. Some say they have postponed payroll or considered high-interest loans to stay open.
State says payments are being processed efficiently
MTN News asked the Montana Department of Public Health and Human Services how widespread the payment delays are, how many providers have been affected and when remaining issues will be resolved.
The department declined an interview and did not directly answer those questions.
In a statement, DPHHS said it has issued more than $11 million in payments through the new system and is processing provider reimbursements faster than the federal requirement of 21 days when providers submit timely, error-free invoices.
"For example, payments for May services could be made as early as June 12th. While necessary internal checks, such as allowing families time to review invoices, add a few days to the timeline, they are essential to ensure a secure and accurate process that protects against fraud, waste, and abuse," the statement said.
The department also said it prepared providers for the transition by sending more than 10 communications before the system launched and continues offering technical support through a dedicated help desk, online resources and training materials.
DPHHS said additional processing time is needed to allow families to review invoices and to protect against fraud, waste and abuse.
Governor's office cites state and federal requirements
Mullen also contacted the office of Gov. Greg Gianforte seeking help with the payment issues.
In a written response, the governor's office said changes to the payment system were required under House Bill 648, passed by the Montana Legislature in 2023, to comply with new federal rules.
The law changed Best Beginnings payments from being based on daily attendance to a set monthly payments intended to provide more stable funding for providers.
The governor's office also said the system limits families to one full-time childcare provider or two part-time providers each month to prevent duplicate payments and overbilling.
According to the response, DPHHS is working within current legislative and technical requirements to ensure payments are issued accurately.
Families worry about losing childcare
For parents who rely on the Best Beginnings program, the uncertainty is concerning.
Chelsea Brent, a single mother of three, depends on the scholarship so she can continue working while her children attend Kids Cave Childcare.
"If there's no Best Beginnings, I can't work. If I can't work, I can't live," Brent said. "My village is my daycare as a single parent. I think that's really scary."
Mullen said if payment issues continue for months, she may have to reconsider whether she can continue accepting Best Beginnings families.
"I only have so much in savings," she said. "If this continues to be an issue for months and months and months on end, I would have to seriously consider whether it would be worth taking Best Beginnings."
Childcare providers across Montana warn that if the issues aren't resolved, more providers could stop accepting Best Beginnings families—or close their doors altogether.
