The following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise:
"Administrative appeal" means the procedure through which applicants and/or retail stores may appeal a state agency's administrative action, including program disqualification, denied authorization and other termination reasons.
"Annualized income" means income amount covering a
12-month period used to determine financial eligibility for the WIC Program. "Applicant" or "retail store
applicant" means a sole proprietorship, a partnership, cooperative
association or a corporation that is not currently authorized to accept WIC
"Approved food list" means a brochure or method used by the WIC Program to communicate to eligible participants, retailers, local agencies and other interested parties which authorized supplemental foods may be purchased using WIC food instruments. The approved food list is a guide and must be used with the printed food instrument, which may identify specific brands or additional products not stated on the approved food list that may be purchased by participants.
"Authorization" means the process by which the state agency assesses, selects and enters into an agreement with stores that apply or subsequently reapply to be authorized.
"Automated clearinghouse" or "ACH credit" or "direct deposit" means a method used to reimburse stores for certain types of processed food instruments (i.e., "Over FI Max."). A credit is made to the store's designated bank account and routing number using the automated clearinghouse process.
"Business economic areas" or "BEAs" mean a categorization method established by the United States Department of Commerce Bureau of Economic Analysis and used by the state agency to identify geographically similar trade and economic communities. Some more populated BEAs are further broken down into smaller subsets or peer groupings, based upon number of unique participants served by authorized stores.
"Caretaker" means a person designated by a parent or legal guardian to certify an infant/child, obtain and redeem food instruments and attend nutrition education. A caretaker may be any person who has detailed knowledge of the nutritional needs and eating habits of the infant/child. A parent or legal guardian may designate one caretaker per family ID number.
"Caseload" means the number of WIC participants assigned to a local agency by the state agency.
"Cash value food benefits" means a special food instrument that has been issued to eligible participants for a specific dollar amount that must be used to purchase fruits and vegetables. Unless stated otherwise, all references to food instruments include cash value food benefits, as well as food and formula food instruments.
"Enrollment" means the process all applicants and authorized stores must complete in order for a store to be eligible to accept WIC food instruments.
"Food instrument type" or "FI type"
means a grouping of certain foods and formula together that is used for
reimbursement purposes in a paper-based system.
"Image replacement document" or "IRD" means a legal copy of a deposited food instrument that is created and transmitted by a store's depository bank to the WIC Program's backend processor for payment consideration.
"Informal settlement meeting" means a meeting held with an authorized store or applicant representative and the state WIC director whose purpose is to review and clarify outstanding WIC Program administrative issues.
"Leave and earnings statement" or "LES"
means the earnings statement for a member of the uniformed service.
"Legal guardian" means an individual who has been appointed by a court of law or the Department of Social Services, or other legal means, to have primary, physical custody of a minor. A legal guardian shall be authorized to provide eligibility information for an applicant, consent to medical treatment of the applicant, and shall be held legally bound if sanctions are imposed.
"Peer group" means a classification of applicants and authorized stores into groups based on common characteristics or criteria that affect food prices for the purpose of applying appropriate competitive price criteria to stores at authorization and limiting payments for foods at competitive pricing levels.
"Postpayment review" means an analysis of paid food instruments redeemed by authorized retailers in order to determine if pricing and redemption discrepancies exist. Based upon this analysis, a vendor claim against the retail store may be established by the state agency.
"Prepayment edit" means a price adjustment made to the reimbursement level given to retailers. This editing process can be either automated or a manual screening of deposited food instruments done by an independent banking contractor, prior to releasing payment to authorized retail stores.
"Retailer" means a vendor, retail store, commissary, or entity authorized by the Virginia WIC Program to accept WIC food instruments for the various types of foods listed on food instruments.
"Retailer agreement" means a written agreement that establishes the respective roles and responsibilities of the program and authorized retailers in complying with federal and state requirements.
"Sanctions" mean a penalty imposed by the state agency upon an authorized retailer for a specific violation outlined in the vendor manual or retailer agreement.
"State agency" means the Division of WIC and Community Nutrition Services that has the administrative responsibility for managing the Virginia WIC Program.
"Termination" means the act of ending a retail store's WIC Program authorization for administrative reasons that include but are not limited to a change of ownership, closed store, voluntary withdrawal, and noncompetitive prices.
"Unique participant" means the number of unduplicated individuals who have redeemed one or more food instruments at a retail store during a specific period.
"United States Department of Agriculture" or "USDA" means the federal agency that provides funding for the WIC Program on behalf of Congress.
"Vendor claim" means the state agency has determined an authorized store committed a violation of the retailer agreement that affects the payment status of one or several food instruments. The state agency may delay payment or establish a claim in the amount of the full purchase price of each food instrument that contained the overcharge or other error. The state agency will bill and recoup the funds paid against these improperly redeemed food instruments.
"Vendor manual" means a series of written documents that communicate administrative policies and procedures for the Virginia WIC Program that affect both authorized retailers and applicants. The Vendor Manual is part of the WIC Program State Plan that must be submitted and approved by USDA.
"Virginia Department of Health" or "VDH" means the state agency that oversees the Virginia WIC Program.
"Waiting list" means a list implemented by the state agency when the maximum caseload is reached.
"Warning" means one or more incidents of noncompliance with program requirements were documented. The state agency sends a written warning letter to the owner or store manager to advise him of any documented violations. A warning letter is not sent to the owner or store manager for selective documented violations that affect the integrity of the investigative process, including but not limited to overcharges, fraud, and forgery.
12VAC5-195-390. Approved food list.
A. A copy of the current Virginia WIC Program's Approved Food List (effective January 1, 2007) must be stored at each cash register where WIC transactions are handled. A copy of the approved food list must also be stored in the Vendor Manual that shall be kept onsite at the authorized store location.
B. The approved food list is used in conjunction with the WIC food instrument to identify foods that are eligible for purchase by WIC participants. The food instrument may state specific manufacturers or brands that must be purchased by program participants that are not covered by the general description used in the approved food list.
C. Authorized retailers shall sell WIC-designated brands for food categories identified in the approved food list. Authorized retailers shall use shelf labels approved by the state agency to identify the WIC-designated brands that they select and declare using the state agency's Internet-based application.
12VAC5-195-580. Performance and administrative monitoring.
A. All applicants must successfully pass an unannounced stocking visit prior to being authorized. Applicants will receive a written letter from the state agency advising them the store has been selected for further authorization consideration. The applicant will receive a copy of the minimum stocking requirement and the letter sent to the store will identify the consequences associated with failing to meet this program standard.
B. The state agency monitors authorized store's performance throughout the contract period in order to ensure the best qualified stores are authorized. The type and level of monitoring conducted by the state agency depends upon the store's authorization status. Stores designated as high volume retailers, high risk retailers, and probationary stores are more likely to be selected for unannounced monitoring visits by the WIC Program.
C. Authorized stores that fail to consistently meet any of the general requirements and conditions for authorization may be terminated. Specific areas the state agency monitors include, but are not limited to:
1. Number of paid and rejected food instruments;
2. Prices charged for WIC-approved foods and formula;
3. Level of compliance in following program requirements; and
4. Use of approved wholesalers and suppliers in purchasing WIC-approved foods and formulas.
D. The state agency shall establish and communicate to all authorized stores and applicants the minimum stocking requirement.
E. Each federal fiscal year, a sample of authorized stores shall be selected for one or more unannounced onsite monitoring visits.
F. State agency personnel may conduct an unannounced monitoring visit to ensure that authorized stores or applicants meet all program requirements. Authorized stores and applicants shall have available onsite the minimum stocking requirement at all times as established by the state agency. The specific foods, contract formulas and administrative procedures associated with meeting this requirement are outlined in the Minimum Stocking Requirement, which is included in the Vendor Manual.
G. Authorized stores with more than one year of continuous participation in the program may request in writing to the state agency that a waiver be granted for one or more items that are part of the minimum stocking requirement. The state agency shall provide a written decision to the store's waiver request within 30 calendar days after receipt. The waiver to the minimum stocking requirement for a required item shall expire upon the presentation to the store, on behalf of a participant, of a WIC food instrument for the purchase of that required food item. The authorized store shall provide the food item within 48 hours, excluding weekends and holidays, after presentation of the WIC food instrument.
H. The state agency may conduct other types of unannounced onsite monitoring visits to a retail store's location including, but not limited to, random, price verification, high volume, formula audits, and high risk.
I. During the unannounced onsite monitoring visit, the state agency representative may perform, but not be limited, to the following:
1. Observe and document the level of compliance with general program requirements;
2. Validate if the minimum stocking requirement has been met;
3. Collect and confirm prices submitted by retail stores;
4. Confirm prices are posted on or in close proximity to WIC-approved foods;
5. Review purchase or invoice records;
6. Conduct formula inventory analysis;
7. Educate the retailer about program changes;
8. Provide educational materials and supplies;
9. Provide technical consultation
10. Confirm WIC-approved shelf labels are being used to correctly identify WIC-designated brands.
J. During the unannounced onsite monitoring visits, store management may receive the following:
1. Answers to technical or procedural questions;
2. Updated program information;
3. Additional training materials and supplies;
4. Opportunity to correct documented deficiencies, if needed;
5. Opportunity to provide shelf prices of WIC-approved items, if applicable; and
6. Opportunity to confirm results documented by the state agency representative during the monitoring visit.
K. The results from these onsite visits are documented and kept on file at the Richmond, Virginia, state agency office.
L. Each federal fiscal year, a sample of authorized stores shall be selected for one or more announced onsite formula monitoring visits. The state agency shall ensure that authorized stores sell formulas that have been purchased from a WIC-approved supplier, distributor, wholesaler, or an authorized resource. A listing of WIC-approved suppliers, distributors, wholesalers, and authorized resources is located on the state agency's website. This outcome is accomplished by state agency personnel reviewing formula purchasing records and invoices, comparing formula redemption data from WIC sales and completing a pre- and postphysical inventory of formula available at the store location during a specific analysis period. Stores whose purchase records do not support the quantity of WIC sales volume for a selective formula item based upon redeemed food instruments may be issued sanctions, fined, or disqualified from the WIC Program. The results from a formula monitoring visit are documented and a written assessment is sent to the store once the state agency has completed its analysis.
M. Authorized stores that do not remain price competitive fail to maintain the minimum stocking requirement or fail to adhere to the retailer agreement may be fined or have their authorization terminated unless inadequate participant access exists. Depending upon the service delivery impact, the state agency may waive terminating a store that fails to comply with any of these requirements until an alternative store located in the same area can be authorized. The state agency will evaluate and document the reasons for making any authorization exception decisions.
12VAC5-195-590. Reimbursement and payments.
A. The state agency shall use a prepayment edit process to screen all deposited food instruments. For each processed food instrument, the state agency shall either:
1. Pay as submitted;
2. Make a price adjustment, if applicable; or
3. Deny payment of the deposited food instrument.
B. The state agency's reimbursement responsibilities in making payments against deposited and undeposited food instruments include, but are not limited to:
1. Ensuring payments are made to authorized stores that have a signed retailer agreement with the Virginia WIC Program. Unauthorized stores will not be paid for any mistakenly accepted and deposited food instruments;
2. Ensuring the maximum reimbursement levels used by its banking contractor, based upon peer groups, are reasonable for the food and formula items prescribed for purchase by participants;
3. Reconsidering for payment WIC food instruments not paid or partially paid provided the food instruments are submitted to the state agency within 50 calendar days of the first date printed on the food instrument;
4. Making price adjustments to the reimbursement amount paid to retail stores in order to ensure individual store's reimbursement levels remain eligible for authorization, based upon competitive prices charged by similar stores;
5. Collecting bank account and routing numbers from applicants and authorized stores in order to process direct deposit payments using an Automated Clearinghouse (ACH);
6. Ensuring prompt ACH credits are made to the retailer's bank account when appropriate;
7. Collecting retailer's prices using an electronic, Internet-based application;
8. Identifying retailers whose prices are noncompetitive and take administrative actions including possible termination of the retailer's authorization;
9. Complying with all federal regulations and guidelines that require administrative approval by USDA prior to making payments, as applicable;
10. Providing written communications to all authorized stores containing the procedures used by the program to pay or deny payments for all deposited food instruments; and
11. Recouping overpayments due to banking or procedural errors, if applicable, from authorized stores.
C. Authorized stores must deposit food instruments within 14 calendar days of the last date printed on the food instrument.
D. Food instruments or image replacement documents (IRDs) rejected for payment due to "unreadable vendor stamp" or "no vendor stamp" error messages must be corrected and redeposited within 30 calendar days of the last date printed on the food instrument.
E. All food instruments or IRDs rejected for payment or
FIs food instruments require WIC Program review for
exception payment consideration and must be submitted by the authorized store
to the state agency. A store must also simultaneously submit a written
request and justification for payments on undeposited or rejected FIs or IRDs.
The state agency reserves the right to deny a submitted request for payment
depending on the explanation provided by the store or bank of first deposit.
Approved exception payments will only be made to an authorized retail store.
1. Stores must submit their undeposited or rejected
instruments or IRDs and justifications to the state agency within 30
calendar days of the last date printed on the food instrument. A store must
also simultaneously submit a written request and justification for payments on
undeposited or rejected food instruments or IRDs.
2. Undeposited or rejected
FIs food instruments
or IRDs sent to the state agency that are greater than 30 calendar days from
the last date printed on the food instrument may not be eligible for payment
and may require USDA approval.
3. Food instruments or IRDs rejected for payment due to a processing error that originates either at the federal reserve or bank of first deposit may be considered for an exception payment. The food instruments or IRDs must be submitted to the state agency within 120 calendar days from the first date to spend printed on the food instrument. A bank representative must submit a written request with the unpaid food instruments or IRDs.
F. A maximum allowable reimbursement amount for each peer group and food item combination is established using pricing data (7 CFR 246.12). Each food item combination is identified by a unique food instrument type identifier. More than 4,000 unique food combinations exist with different reimbursement maximum amounts. Authorized stores that submit prices determined to be noncompetitive will not have their prices used when the state agency computes the maximum allowable reimbursement amount used for making price adjustments.
G. Stores may only get reimbursed for mandatory and optional
foods and formula products they have submitted prices for prior to redeeming
food instruments for those products. Redeemed FIs food
instruments may be subject to repayment as a vendor claim if they include
optional items for which a store has failed to submit prices. Stores must
ensure that the most current shelf prices have been submitted to the WIC
Program for all mandatory items. Failure to submit prices or providing
inaccurate prices for any mandatory food items may lead to a store's
authorization being terminated unless inadequate participant access would
H. Contract and special formulas where pricing information is collected via the Internet-based application by the state agency are eligible for payment to authorized stores. Prices are purposely not collected by the state agency for formulas that should not be redeemed at retail stores. Food instruments redeemed for these types of special formulas are subject to repayment by the store.
I. A maximum reimbursement amount will be established for cash
value food benefits used by participants to purchase fruits and vegetables.
cash value food benefits only, if the total dollar amount being purchased by
the participant exceeds the printed cash value then the participant shall be
allowed to pay the amount over the printed value. The amount written on the
food instrument must not exceed the maximum reimbursement amount printed on it.
For cash value food benefits only, the store must offer one of the following
options to the participant if the total dollar amount being purchased exceeds
the printed cash value:
1. The participant shall be allowed to pay the amount over the printed cash value; or
2. The participant shall be allowed to reduce the quantity of eligible fruits and vegetables being purchased.
Stores must notify the state agency in writing which of these options they provide to WIC participants.
J. The food instrument type/peer group pricing maximum amount may be adjusted monthly by the state agency, depending upon external factors including, but not limited to, wholesale price increases. The reimbursement maximum used for the various food instrument types peer group combinations are not distributed to authorized stores prior to being used by the banking contractor.
K. Food instruments or IRDs that are ineligible for payment and are rejected will be returned to the store's depository bank by the state agency's banking contractor. These returned food instruments will be stamped with a descriptive error message.
L. The state agency may make payment exceptions for food instruments that would normally be denied payment by its banking services contractor. The authorized store shall submit all such requests in writing, including a justification, within 30 calendar days from the last date printed on the food instrument. The state agency will send a payment disposition decision to the requestor within 30 calendar days, after receipt.
M. The state agency shall use a postpayment review process to prospectively evaluate the reimbursement amount paid against redeemed food instruments in order to identify excessive or improperly redeemed food instruments in accordance with federal regulations (7 CFR 246.12). From the postpayment review process, the state agency may determine that one or more payments already made to a retail store were ineligible for payment as a result of a store failing to submit pricing data for the purchased item or items. The state agency reserves the right to bill and recoup payments of these ineligible payments, which will be referred to as a vendor claim (7 CFR 246.12). The state agency shall not bill an authorized store if the vendor claim amount is less than $10.
N. A retail store that is not authorized to participate in the Virginia WIC Program that accepts a food instrument will not be reimbursed for any food instruments redeemed by a WIC participant.
O. A store must submit a direct deposit ACH form to the state agency that identifies any bank changes to its routing or account number. A direct deposit ACH form must be submitted at least 14 days prior to the change effective date. If the state agency's banking contractor identifies that the store's bank account or routing number is not valid, then the store will receive one written notice from the state agency. Failure by the store to resolve any reported discrepancies within 30 days after a written notice has been sent by the state agency may lead to the store being ineligible to receive payments for rejected FIs.
P. Retail stores are responsible for all bank handling fees and charges associated with doing business with the WIC Program.
12VAC5-195-670. Full administrative review.
A. Authorized retail stores and applicants shall be offered an opportunity to request a full administrative review for only the adverse action cited in subsection O of this section.
B. The retail store or applicant has 15 calendar days from the date of receipt of the denial notice, either by letter or an electronic format, or disqualification letter to request a full administrative review.
C. The request for the full administrative review can be mailed by US mail, sent by facsimile transmission or sent via email to the vendor manager. If the request is mailed, it must be postmarked within 15 calendar days from the date of receipt of letter or electronic notification from the state agency, whichever comes first.
D. The retail store or applicant must indicate whether or not he will be represented by an attorney when the full administrative review request is made. The retail store or applicant must also provide the state agency with copies of any written information to be used during the review and names of witnesses that will be called at least five days prior to the scheduled full administrative review. Failure to notify the state agency of these items may result in a rescheduled date and time for the full administrative review or the exclusion of documents and witnesses from the full administrative review.
E. Upon receipt of the retail store's or applicant's request for a full administrative review, the state agency will confirm a date, time, and place for the review within 30 days. For authorized stores, the review must be scheduled to take place within 60 calendar days after the written request is received by the state agency unless otherwise agreed to by the parties involved.
F. Failure to attend the scheduled review on the agreed upon date and time will lead to the retail store forfeiting its rights to any further administrative reviews.
G. The retail store or applicant will have one opportunity to reschedule the full administrative review's date or time. All requests to reschedule the review date or time must be submitted in writing at least 24 hours before the scheduled review date, unless an emergency occurs, as determined at the discretion of the state WIC director or designee. Rescheduled reviews shall take place within four weeks of the originally scheduled date unless the parties mutually agree on a later date.
H. If the retail store representative is more than 45 minutes late from the agreed upon review start time, then this will be considered a "no show" unless he can provide documentation that the WIC director or designee determines justifies his tardiness or failure to appear. This outcome means that the retail store has forfeited its rights to a full administrative review.
I. A full administrative review is conducted by an adjudication officer who is employed by the Virginia Department of Health. The adjudication officer shall ensure that administrative actions taken by the WIC Program are consistently and fairly applied and that those administrative actions comply with established policies, procedures and federal and state regulations. A representative from the state agency will present its case to the adjudication officer and retail store or applicant representative. Conversely, the storeowner or designated representative, which may include legal counsel, will present its case to the adjudication officer.
J. All full administrative reviews are held in Richmond, Virginia.
K. After a full administrative review is held, the state WIC director shall provide written notification of the adjudication officer's decision, including the basis for the decision, within 90 calendar days of the date of receipt of the full administrative appeal review request, unless otherwise agreed to by the parties involved. This notification will also be sent to the appropriate USDA Food and Nutrition Services office.
L. Authorized retail stores being disqualified may continue to deposit WIC food instruments until a decision has been rendered from the full administrative review. The adverse action effective date shall be postponed by the state agency pending the outcome of the review.
M. In accordance with 7 CFR 246.18, if an authorized store does not request a full administrative review, then disqualification becomes effective 15 calendar days after the retailer receives the state agency's written disqualification letter.
N. An authorized retailer being retained in lieu of disqualification may elect to voluntarily withdraw from the WIC Program rather than pay a mandated civil monetary penalty fine. If the retailer voluntarily withdraws and does not pay a civil monetary penalty fine that previously had been imposed by the program, then a disqualification status will be documented in the state agency's records. The disqualification period may range from one to six years, depending on the type of sanctions and violations documented by the state agency.
O. The state agency shall provide a full administrative review to retail stores or applicants for the following adverse actions pursuant to 7 CFR 246.18:
1. Denial of authorization based on the vendor selection criteria for competitive price or for minimum variety and quantity of authorized supplemental foods or on a determination that the vendor is attempting to circumvent a sanction (7 CFR 246.12);
2. Denial of authorization based upon the vendor selection criteria for business integrity or for a current Food Stamp Program disqualification or civil money penalty for hardship (7 CFR 246.12);
3. Denial of authorization based on a state agency established vendor selection criteria if the basis of the denial is a vendor sanction or a Food Stamp Program withdrawal of authorization or disqualification;
4. Denial of authorization based on the state agency's retailer limiting criteria (7 CFR 246.12);
5. Denial of authorization because a vendor submitted its application outside the timeframes during which applications are accepted or processed as established by the state agency under (7 CFR 246.12);
6. Termination of a retailer agreement because of a change in ownership or location or cessation of operations (7 CFR 246.12);
7. Termination of a retailer agreement for cause;
8. Disqualification based on documented WIC Program violations;
9. Disqualification based on a trafficking conviction (7 CFR 246.12);
10. Disqualification based on the imposition of a Food Stamp Program civil monetary penalty for hardship (7 CFR 246.12);
11. Disqualification or civil monetary penalty imposed in lieu of disqualification based on a mandatory sanction imposed by another WIC state agency (7 CFR 246.12); or
12. Imposition of a fine or a civil monetary penalty in lieu of disqualification.
P. The state agency shall not provide a full administrative review to retail stores that appeal the following actions pursuant to 7 CFR 246.18:
1. The validity or appropriateness of the state agency's vendor limiting or selection criteria (7 CFR 246.12);
2. The validity or appropriateness of the state agency's vendor peer group criteria and the criteria used to identify vendors that are above 50% vendors or comparable to above 50% vendors;
3. The validity or appropriateness of the state agency's participant access criteria and the state agency's participant access determinations;
4. The state agency's determination whether a vendor had an effective policy and program in effect to prevent trafficking and that the ownership of the vendor was not aware of, did not approve of, and was not involved in the conduct of the violation (7 CFR 246.12);
5. Denial of authorization if the state agency's vendor authorization is subject to the procurement procedures applicable to the state agency;
6. The expiration of the retailer's agreement;
7. Disputes regarding food instrument payments and vendor
claims other than the opportunity to justify or correct a vendor overcharge or
other error as permitted by (7 CFR 246.12);
8. Disqualification of a vendor as a result of disqualification
from the Food Stamp Program (7 CFR 246.12)
9. The state agency's determination to include or exclude an infant formula source from the state agency's list of state-licensed wholesalers, distributors, and retailers and infant formula manufacturers registered with the Food and Drug Administration; and
10. The state agency's determination whether to notify a vendor in writing when an investigation reveals an initial violation for which a pattern of violations must be established in order to impose a sanction.
Q. A full administrative review request shall not be denied or dismissed unless:
1. The request to the state agency is not postmarked within 15 calendar days of the applicant or authorized store's receipt of the notice of disqualification or adverse action;
2. The request to the state agency was submitted by an individual who does not have the legal or delegated authority to represent the owner;
3. The retailer or authorized representative withdraws the request in writing;
4. The retailer or authorized representative fails without good cause to appear at the scheduled review date and time; or
5. The request for a full administrative review is not eligible for this consideration based on the specific exclusion criteria outlined in subsection P of this section.