WSR 97-13-098

PROPOSED RULES

DEPARTMENT OF HEALTH

[Filed June 18, 1997, 11:56 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 96-14-043.

Title of Rule: Special supplemental nutrition program for women, infants and children (WIC).

Purpose: The proposed revisions are needed to comply with regulatory reform legislation, to synchronize the rule with the retailer contract, and to streamline the hearing process. Other changes are language simplification and rearranging of sections to improve clarity and flow.

Statutory Authority for Adoption: RCW 43.70.120.

Statute Being Implemented: RCW 43.70.120.

Summary: The rule provides the authorization procedures for foods and retailers to participate in the WIC program, the contract responsibilities for authorized retailers, the types of sanctions a retailer is subject to and the reasons one might receive a sanction, and the appeal hearing process.

Reasons Supporting Proposal: Recent regulatory reform legislation prompted review and revision of the existing rule. In addition, the program took the opportunity to streamline some procedures and clean up and simplify language.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Susan Evans, 586-6739, Becky Waite, 586-6740, PHNS, P.O. Box 47886, Olympia, WA 98504-7886.

Name of Proponent: Department of Health, Public Health Nutrition Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: This rule provides the procedures by which food items and retailers become authorized to participate in the WIC program. It also details the contract responsibilities for authorized retailers, the sanctions a noncompliant retailer might be subject to and the reasons a retailer might be sanctioned, and explains the appeal hearing process.

The goal is to offer a clear explanation of the rights and responsibilities of participating in the food delivery component of the WIC program.

Proposal Changes the Following Existing Rules: Public Health Nutrition Services is proposing these revisions to comply with recently enacted regulatory reform legislation. In addition the proposed changes will streamline the hearing process which contained procedures left over from when the program was in the Department of Social and Health Services; will clarify the sanction system; will make the rule consistent with the retailer contract, and will rearrange the flow of the rule to be easier to understand.

No small business economic impact statement has been prepared under chapter 19.85 RCW. There are no fees involved since the WIC program enters into provider agreements with authorized retailers rather than any type of license.

No small business economic impact statement is required since there are no fees to affect and costs of compliance for contracted retailers will be reduced rather than increased with the proposed rule.

Section 201, chapter 403, Laws of 1995, applies to this rule adoption. This rule is significant under section 201, chapter 403, Laws of 1995, because it contains provisions which if violated will subject the violator to a sanction. The agency has conducted the analysis required under section 201.

Hearing Location: Department of Health, Building 1, Airdustrial Park, 7171 Cleanwater Lane, Tumwater, WA 98504, on July 28, 1997, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact Susan Evans by July 21, 1997, TDD (800) 833-6388, or (360) 586-6739.

Submit Written Comments to: Susan Evans, P.O. Box 47886, Olympia, WA 98504-7886.

Date of Intended Adoption: August 4, 1997.

June 17, 1997

Mimi Fields, M.D.

for Bruce Miyahara

Secretary

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-010 Definitions. (1) "Appeal process" means a formal proceeding to appeal a program decision. The appeal hearing process provides a contractor the opportunity to review the case record prior to the hearing, to present its case in an impartial setting, to confront and cross-examine witnesses, and to be represented by counsel.

(2) "Applicant retailer" means any ((food vendor making a written request for authorization to participate)) retailer submitting a completed request for authorization requesting participation in the program.

(((2))) (3) "Authorized" or "authorization" means the applicant retailer has ((been given approval by the department)) met selection criteria and signed a contract with the department signifying eligibility to participate in the WIC program.

(((3))) (4) "CFR" means the Code of Federal Regulations.

(((4))) (5) "Contract" means a written legal document ((with the department, which allows the food vendor to accept food instruments from WIC in exchange for specified supplemental foods. The contract shall be signed by the food vendor's legal representative and the contracting officer of the department of health)) binding the contractor and the department to designated terms and conditions.

(((5))) (6) "Contractor" means ((a WIC-authorized food vendor)) the owner, chief executive officer, controller, or other person legally authorized to obligate a retailer to a contract.

(((6))) (7) "Department" means the Washington state department of health.

(((7))) (8) "Disqualification" means the act of ((ending the participation)) revoking the authorization and terminating the contract of an authorized ((food vendor, participant, or local agency in the)) retailer for noncompliance with WIC program requirements.

(((8))) (9) "Food company" means a manufacturer or broker of food items.

(((9) "Food instrument" means a WIC check which is used by a participant to obtain specified supplemental foods.

(10) "Food vendor" means the owner, chief executive officer, controller, or other person legally authorized to obligate a store location to a contract.

(11) "Fine" means a sum of money imposed as a penalty for an offense.

(12) "Fraud" means any act in which a food vendor misuses the WIC program for monetary gain.

(13))) (10) "Local WIC agency" means the contracted clinic or agency where a ((participant)) client receives WIC services.

(((14) "Program" means the special supplemental food program for women, infants and children (WIC).

(15))) (11) "Monetary penalty" means a sum of money imposed by the program for noncompliance with program requirements.

(12) "Reauthorization" means the process when a retailer who has a contract with the department which is expiring, has again applied and met the selection criteria, and signed a subsequent contract with the department signifying eligibility to participate in the WIC program.

(13) "Supplemental WIC foods" means those foods containing nutrients determined to be beneficial for pregnant, breast-feeding, and postpartum women, infants and children, as prescribed by federal regulations and state ((regulations)) requirements, and, as authorized by the Washington state WIC program.

(((16) "Termination" means discontinuing:

(a) Authorization of a food vendor to participate in the program; or

(b) Authorization of a participant to receive WIC benefits.

(17))) (14) "WIC program" or "program" means the federally funded special supplemental nutrition program for women, infants, and children administered in Washington state by the department of health.

(15) "WIC retailer" or "retailer" means an individual store owned by a contractor which is authorized to participate in the WIC program.

(16) "Wholesaler" means a business entity which sells food and other items to a ((food vendor)) retailer.

(17) "WIC check" means a negotiable instrument issued to and used by a WIC client or a WIC client's designee to obtain specified supplemental WIC foods at a contracted WIC retailer.

(18) "WIC ((participant)) client" or "client" means ((any individual)) a pregnant, breast-feeding, or postpartum woman, infant, or child receiving WIC benefits.

(19) "WIC client's designee" means a person authorized by the client to pick up WIC checks at the local WIC agency and use the WIC checks at the retailer when the client is unable to do so.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-010, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.17.060, 43.21C.120 and 43.20A.550. 91-01-098 (Order 3118), 246-790-010, filed 12/18/90, effective 1/18/91.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-050 ((Description of WIC program.)) What is the WIC program? (1) The WIC program in the state of Washington is administered by the division of community and family health, office of public health nutrition services in the department of health.

(2) The WIC program is a federally funded program established in 1972 by an amendment to the Child Nutrition Act of 1966. ((The purpose of the program is to serve as an adjunct to health care by providing nutritious food;)) It is the purpose of the program to provide nutrition and health assessment, nutrition education ((and)), nutritious food; breast-feeding counseling; ((health screening;)) and referral services to pregnant ((and)), breast-feeding, and postpartum women, infants, and children in ((certain high-risk)) specific risk categories.

(((2))) (3) Federal regulations governing the WIC program (7 CFR Part 246) require implementation of standards and procedures to guide the state's administration of the WIC program and are hereby incorporated by reference. These regulations are designed to promote consistent and high quality services to clients, promote consistent application of procedures for eligibility and food issuance, and ((lessen the possibility of participant, food vendor, and local agency abuse of the WIC program)) promote client and retailer compliance. These regulations define the rights, responsibilities, and legal procedures of ((participants, vendors, and local agencies.

(3) The WIC program in the state of Washington is administered by the office of WIC services in the department of health)) clients and retailers.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-050, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-050, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-005, filed 6/6/90, effective 7/7/90; 88-14-037 (Order 2638), 388-19-005, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-060 ((Authorized foods.)) What is the process for getting a food WIC authorized? (1) ((The department shall provide one or more of the following foods to eligible women, infants, and children:)) WIC eligible women, infants, and children receive supplemental WIC foods from one or more of the following food categories. These foods shall meet nutritional standards established by federal regulations and state requirements:

(a) Cereals,

(b) Juices,

(c) Infant formula,

(d) Infant cereal,

(e) Liquid nutritional supplements,

(f) Milk,

(((f))) (g) Eggs,

(((g))) (h) Dry beans and peas,

(((h))) (i) Peanut butter, ((and

(i))) (j) Cheese,

(k) Tuna, and

(l) Carrots.

((These foods shall meet nutritional standards established by federal regulations.))

Additionally, the ((department shall approve)) WIC program authorizes specific brands of juice, cereal, and infant formula((, juice, and cereal)) based on federal and state nutritional requirements. ((In addition, the department specifies juice provided to WIC clients must be unsweetened.

The department shall designate specific types of domestic, pasteurized cheese for the WIC program.

(2) A copy of the authorized WIC food list shall be included in the annually revised state plan which is available for public comment and is submitted to the United States Department of Agriculture Food and Nutrition Services regional office.

(3))) The WIC program limits the selection of authorized WIC foods in accordance with federal cost containment requirements, including, but not limited to, the competitive procurement of a single manufacturer's infant formula.

(2) The ((following steps have been established by the department as the formal)) procedure for ((adding)) initially authorizing a food ((product to the WIC program)) is:

(a) By December 31 of odd-numbered years, a food company or other entity, such as a local WIC clinic, shall submit a written request to the WIC program for authorization of a ((product;

(b) The food company representative shall furnish the state WIC office with)) food, to include:

(i) Package flats or labels, information on package sizes and prices, and a summary of current distribution((; and

(ii) The food company's summary of current distribution shall be in writing and shall include, but not be limited to:

(A))), including identification of the wholesaler carrying the ((product)) food; and

(((B))) (ii) Assessment of when the new ((product)) food replaces the old on store shelves when there is a change in ((the product)) formulation.

((This information must be received ninety days or more before WIC food instrument revision deadlines.

(c) When the product meets federal and state requirements, the department shall verify product availability and price;

(d) The nutrition services work group of the office of WIC)) (b) The WIC program shall verify if a food considered for authorization fits within one of the authorized food categories, meets the federal requirements of nutritional standards, is available to retailers, and has been available to retailers for one year or more;

(c) A public health nutrition services work group shall make a recommendation based on the ((product's)) food's ingredients and value to the promotion of healthful and economic food buying practices;

(((e))) (d) The ((department shall)) WIC program has the option to survey local WIC agency staff and clients for their recommendation ((in regard to)) regarding need and demand for the ((product)) food;

(((f))) (e) The ((department)) WIC program shall review data and recommendations and shall notify the food company of the ((department's)) program's decision;

(((g))) (f) The ((department)) WIC program shall add the newly authorized foods ((items)) to the WIC ((food instrument at the next scheduled printing.

(4) State WIC monitor staff shall determine if a food product considered for authorization is available to retail outlets, statewide, and has a history of availability for one year or more)) check and related materials to coincide with the retailer contract period.

(3) Food companies shall notify the WIC program in writing of any changes in product formulation, product name, packaging, label design, size, or availability. A food company shall notify the WIC program of any such changes before any Washington state wholesaler receives the new product.

If a food company fails to notify the WIC program of any changes, the WIC program may revoke or deny the food's WIC authorization.

(4) A food company shall not use the term "WIC approved" or the WIC program logo without prior written approval from the WIC program.

(5) The ((department reserves the right to)) WIC program may require a food company to submit a statement guaranteeing a minimum period of time during which a food ((product)) will be available ((throughout)) in the state of Washington.

(6) The ((department reserves the right to)) WIC program shall refuse any food ((product)) that ((appears in contradiction to)) contradicts the principles promoted by the WIC program's nutrition service component.

(7) The ((department reserves the right to)) WIC program may limit the number of authorized foods within a food category.

(8) ((Food companies shall notify the department of any changes in product content, name, label design, or availability.

(a) If a food company fails to notify the department of the changes in writing, the WIC program shall revoke the product's authorization; and

(b) A food company shall notify the department of changes before a Washington state wholesaler receives the new product.

(9) A food company shall not use the term "WIC approved" without prior department approval)) The WIC program may initiate reassessment of any WIC authorized food.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-060, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-060, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-015, filed 6/6/90, effective 7/7/90; 88-14-037 (Order 2638), 388-19-015, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-070 ((Food vendor participation.)) How do I become a WIC retailer? (1) ((The department shall authorize food vendors who may redeem WIC food instruments or otherwise provide supplemental foods to WIC participants. Unauthorized vendors who redeem WIC food instruments are subject to the penalties specified in WAC 246-790-100.)) Applicant retailers interested in participating in the WIC program must apply for authorization and enter into a contract with the department.

(2) Application procedure.

(a) ((Food vendors)) Upon request, the WIC program will send an application packet to interested applicant retailers. Applicant retailers shall submit ((an)) the completed application to the ((department)) WIC program, including a price list for authorized WIC foods. ((Forms used in the application process are contained in the state plan which is submitted annually to the United States Department of Agriculture Food and Nutrition Service regional office.))

(b) The ((department)) WIC program may require applicant((s)) retailers to provide information regarding ((gross food sales)) shelf price records and inventory records ((for WIC-approved foods)) showing all purchases, both wholesale and retail, including but not limited to, wholesale receipts, cash and carry receipts, purchase orders, books of account, invoices that identify the quantity and prices of specific WIC foods and other pertinent records that substantiate the volume and the prices charged. Cash register receipts without specific identification of the quantity, unit price, and WIC food purchased are not acceptable as evidence of WIC food purchases.

(c) The ((department)) WIC program shall conduct ((a documented)) and document an on-site visit prior to, or at the time of, initial authorization of ((a new food vendor)) an applicant retailer, for the purpose of evaluating the inventory of WIC foods and providing training on ((rules and regulations of WIC transactions)) the WIC retailer handbook.

(d) ((The department shall issue contracts for a maximum period of two years. All contracts expire on March 31 of odd-numbered years. No new applications will be accepted after October 1 in even-numbered years, except)) Applications are accepted from April 1 of odd-numbered years until September 30 of even-numbered years. Exceptions can be made in the case of an ownership change or where there is a documented need for a location in order to ((solve)) assure client access ((problems)). The ((department has the authority to)) WIC program may limit acceptance of new applications ((to other specific times as well)).

(3) The ((department)) WIC program shall authorize ((an appropriate number and)) a distribution of ((food vendors to assure adequate participant convenience and)) retailers that facilitates client access, and ((to assure the department can effectively manage review of these food vendors)) enables effective management of the retailers. The ((department has the authority to)) WIC program may limit the number of authorized ((food vendors)) retailers in any given geographic area or state-wide.

(4) Selection is based on the following ((conditions)):

(a) The applicant retailer shall have requests from or the potential of serving ((six)) fifteen or more WIC ((participants)) clients as verified by the local WIC agency.

(((i) For vendors without prior contracts, the local WIC agency shall document six or more WIC participants requesting use of a location.

(ii) Vendors)) (b) Applicant retailers applying for re-authorization shall have a check redemption record averaging ((fifteen)) forty or more checks per month over a six-month period, documented by ((department)) WIC program statistics reports.

(((iii))) (c) Exceptions may be made for:

(((A))) (i) Pharmacies needed as suppliers of special infant formulas; or

(((B) Retail grocery stores)) (ii) Applicant retailers in isolated areas where client access cannot otherwise be assured.

In either case, the need shall be documented by the local WIC agency.

(((b) Food vendors)) (d) Applicant retailers shall stock representative items with current shelf lives from all food categories on the authorized WIC food list ((that apply to the vendor's classification)). Minimum quantities specified on the authorized WIC food list shall be ((stocked)) on the shelf available for purchase before a contract is offered to the ((food vendor)) retailer. ((A food vendor)) An applicant retailer seeking a waiver from the minimum formula stock requirement shall request the waiver in writing for each ((contracting)) contract period. No waivers shall be granted unless there is an insufficient number of authorized ((vendors)) retailers in a given service area to assure client access;

(((c))) (e) Prices of individual foods ((items)) shall not exceed one hundred twenty percent of the state-wide average price((. The state WIC office shall have the prerogative to grant waivers to the price percentage requirement when client access is jeopardized)) as calculated at least annually. An applicant retailer seeking a waiver from the one hundred twenty percent requirement shall request the waiver in writing for each contract period. No waivers shall be granted unless there is an insufficient number of authorized retailers in a given service area to assure client access;

(((d))) (f) The ((food vendor)) applicant retailer shall possess a valid Washington state tax registration number;

(((e))) (g) The ((food vendor)) applicant retailer shall agree to comply with training sessions((,)) and monitor visits, and provide ((invoices and)) shelf price((s)) records and inventory records showing all purchases, both wholesale and retail, including but not limited to, wholesale receipts, cash and carry receipts, purchase orders, books of account, invoices that identify the quantity and prices of specific WIC foods, and other pertinent records that substantiate the volume and prices charged upon the ((department's)) WIC program's request;

(((f))) (h) The applicant retailer shall operate from a fixed location;

(i) The ((food vendor's store)) applicant retailer shall be open for business at a minimum eight or more hours per day, six days per week.

(((4) The department shall give written notification of denial, stating the reason, and advising the food vendor of the vendor's right of appeal. The department may deny a food vendor authorization for reasons including, but not limited to the following:

(a))) (j) The applicant retailer shall be in compliance with local sanitation rules;

(k) The applicant retailer with a history of any of the following shall be denied authorization unless client access can not otherwise be assured:

(i) WIC or food stamp disqualification;

(ii) Redeeming WIC ((food instruments)) checks without authorization;

(((b))) (iii) Changing ownership more than twice during a two-year contracting period;

(((c) Failure)) (iv) Failing to implement corrective action imposed by the ((department)) program;

(((d) Failure)) (v) Failing to complete payment within the time specified, of an imposed ((fine)) monetary penalty or reimbursement of an overcharge ((within the time specified)); and

(((e))) (vi) Refusing to accept training from the WIC program((; and

(f) Repeated department-documented noncompliance with program regulations)).

(5) The WIC program may deny a retailer authorization for failure to meet any of the stated selection criteria.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-070, filed 10/27/92, effective 11/27/92; 91-06-029 (Order 145), 246-790-070, filed 2/26/91, effective 3/29/91. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-070, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-020, filed 6/6/90, effective 7/7/90; 88-18-022 (Order 2681), 388-19-020, filed 8/30/88; 88-14-037 (Order 2638), 388-19-020, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-080 ((Food vendor contracts.)) What do I need to know about WIC retailer contracts? (1) All authorized ((food vendors)) retailers shall enter into written contracts with the department. The contract shall be signed by the ((food vendor's legal representative)) contractor and the designee of the contracting officer of the department of health.

(2) ((When the food vendor obligates more than one store location,)) The contract shall list all ((participating store locations shall be listed)) authorized retailers by name and location ((on the contract)). Individual ((store locations)) retailers may be added, changed, disqualified, or terminated by contract amendment without affecting the remaining ((store locations)) retailers.

(3) ((The department shall have the authority to contract with a sole source for a specified WIC food product or food product category.

(4) WIC vendor rules. The food vendor contract shall contain the following rules:

(a) The food vendor shall stock sufficient quantities of authorized WIC foods to meet the needs of WIC customers;

(b) The food vendor shall redeem food instruments made payable only to that specific store or with the words "any authorized WIC vendor;"

(c) The food vendor shall accept food instruments from a WIC customer within thirty days of the time period specified on the food instrument and submit for payment within the time period stated on the food instrument;

(d) The food vendor shall ensure both signatures on the WIC check match;

(e) The food vendor shall not accept WIC food instruments altered in any way;

(f) The food vendor shall redeem WIC food instruments for only the supplemental foods specified and in the quantity specified on the food instrument;

(g) The food vendor shall post the prices of WIC foods so they are visible to the public;

(h) The food vendor shall provide supplemental foods at the current price or at less than the current price charged other customers;

(i) The food vendor shall not sell WIC-authorized foods after the manufacturer's expiration date;

(j) The food vendor shall not accept WIC checks exceeding the maximum amount allowable;

(k) The department has the right to demand refunds from the food vendors for documented overcharges;

(l) The department may deny payment to the food vendor for improperly handled food instruments or may demand refunds for payments already made on improperly handled food instruments.

(m) The food vendor shall not seek restitution from WIC participants for food instruments not honored by the WIC program, nor shall the food vendor seek restitution through a collection agency;

(n) The food vendor shall not request cash or give change in a WIC transaction;

(o) The food vendor shall not impose a surcharge or charge sales tax on any product purchased with WIC food instruments;

(p) The food vendor shall not issue refunds for returned WIC foods or allow exchanges of WIC foods;

(q) The food vendor shall not issue rain checks or any form of credit;

(r) The food vendor shall treat WIC customers with the same courtesy provided to other customers;

(s) The department shall hold the food vendor responsible for the actions of employees or agents of the vendor with regard to any WIC transaction;

(t) The manager of the store or an authorized representative such as head cashier shall agree to accept training on WIC program requirements and procedures. The department shall provide this training;

(u) The food vendor shall inform and train cashiers or other employees on WIC program rules and food instrument cashing procedures;

(v) The department shall monitor the food vendor for compliance with WIC program rules;

(w) During the department monitoring visit of a food vendor, the food vendor shall provide access to redeemed food instruments for the purpose of review by the department representative;

(x) Food vendors shall provide department reviewers access to shelf price records, wholesale receipts, and purchase orders;

(y) Each food vendor shall provide the department with a complete price list of authorized WIC foods not more than twelve times per year; and

(z) The food vendor shall notify the department of any store closure or change of ownership, store name, and/or location no later than the tenth of the month before the month during which the change is effective. Notices from the vendor shall be addressed to DOH WIC Program, P.O. Box 47880, Olympia, Washington 98504 7880.

(5) Renewal of contract.

(a) Neither the department nor the food vendor is obligated to renew the food vendor contract. The department shall notify food vendors in writing not less than fifteen days before the expiration of a contract not being renewed by the department.

(b) Food vendors shall observe time lines, such as deadlines for submitting price lists and returning properly signed contracts. Failure of food vendors to do so may result in denial of authorization.

(6) Contract terminations.

(a) Either the department or the food vendor may terminate the contract at any time by submitting a written notice to the other party thirty days in advance.

(b) The food vendor contract shall automatically be terminated without advance notice from the department in the event of a store closure or change in ownership.

(c) The food vendor must reapply to be considered for participation in the WIC program.

(d) The food vendor shall remain in compliance with selection criteria (WAC 246-790-070(3)) and WIC food vendor rules (WAC 246-790-080))) Duration of contract.

(a) The WIC program shall issue contracts for a maximum period of two years. All contracts expire on March 31 of odd-numbered years.

(b) Neither the WIC program nor the contractor is obligated to renew the contract. The WIC program shall notify contractors in writing not less than fifteen days before the expiration of a contract not being renewed by the program.

(c) Authorization is valid for no longer than the period stated in the contract. The retailer must reapply to be considered for authorization in the WIC program.

(d) The contractor or the WIC program may terminate the contract at any time by submitting a written notice to the other party thirty days in advance.

(e) The contract is null and void in the event of a retailer closure or change in ownership.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-080, filed 10/27/92, effective 11/27/92; 91-23-078 (Order 215), 246-790-080, filed 11/19/91, effective 12/20/91. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-080, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-025, filed 6/6/90, effective 7/7/90; 88-14-037 (Order 2638), 388-19-025, filed 6/30/88.]

NEW SECTION

WAC 246-790-085 What is expected of WIC retailers? (1) The retailer shall comply with WIC program requirements and terms of the retailer contract.

(2) The retailer shall stock sufficient quantities of authorized WIC foods to meet the needs of WIC customers, but not less than the minimum stock levels.

(3) The retailer shall redeem WIC checks made payable only to that specific retailer or with the words "any authorized WIC vendor."

(4) The retailer shall accept WIC checks from a WIC customer on the "first day to use," the "last day to use," or any day in between the dates printed on the WIC check. The retailer shall submit the WIC check for payment within sixty days from the "first day to use."

(5) The retailer shall refuse to accept WIC checks that have the purchase price missing, the client's signature missing, the "first day to use" or the "last day to use" missing, or that are postdated or stale dated.

(6) The retailer shall enter the actual purchase price of the specific quantity of WIC authorized foods on each WIC check before the WIC customer countersigns the check.

(7) The retailer shall accept only WIC checks on which the WIC customer's countersignature matches the first customer signature on the check.

(8) The retailer shall refuse to accept WIC checks that are altered in any way.

(9) The retailer shall redeem WIC checks for only the supplemental WIC foods and in no more than the quantity specified on the check.

(10) The retailer shall post the prices of WIC foods so they are visible to the public.

(11) The retailer shall provide supplemental foods at the current price or at less than the current price charged to other customers.

(12) The retailer shall not sell WIC-authorized foods after the manufacturer's expiration date.

(13) The retailer shall not accept WIC checks with purchase amounts over the "not to exceed" amount printed on the check.

(14) The retailer shall reimburse the WIC program for documented overcharges and payments made on improperly handled WIC checks.

(15) The retailer shall not seek restitution from WIC clients for WIC checks not paid by the WIC program, nor shall the retailer seek restitution through a collection agency.

(16) The retailer shall not request cash or give change in a WIC transaction.

(17) The retailer shall not impose a surcharge or charge sales tax on any food purchased with WIC checks.

(18) The retailer shall refuse WIC client's requests for exchanges or cash refunds for returned WIC foods. Exceptions may be made for exchange of food due to spoilage or expired date not noticed by the WIC client at the time of the WIC transaction.

(19) The retailer shall not issue rain checks, any form of credit, or otherwise charge the WIC program for foods not received by the WIC customer at the time the WIC check is redeemed.

(20) The retailer shall treat WIC customers with the same courtesy provided to other customers.

(21) The contractor shall be responsible for the actions of employees, agents, and authorized retailers with regard to participation in the WIC program.

(22) The manager of the retailer or an authorized representative such as head cashier shall attend training on WIC program requirements and procedures prior to issuance of a contract and as otherwise required by the WIC program. The WIC program shall provide this training at no cost to the retailer.

(23) Those who attend training shall inform and train other employees on WIC program requirements and WIC check cashing procedures.

(24) The retailer shall provide access to its facilities at all reasonable times for WIC program representatives to monitor, to provide training or technical assistance, and to evaluate performance, compliance, and quality assurance.

(25) During any WIC program visit of a retailer, the retailer shall provide access to redeemed WIC checks for the purpose of review by the program representative.

(26) Retailers shall maintain inventory records showing all purchases, both wholesale and retail, for a period of at least three years, including, but not limited to shelf price records, wholesale receipts, cash and carry receipts, purchase orders, books of account, invoices that identify the quantity and prices of specific WIC foods, and other pertinent records that substantiate the volume and prices charged and provide WIC program representatives access to those records on request.

(27) Each retailer shall provide the WIC program with a completed price list of authorized WIC foods on request, but not more than twelve times per year.

(28) The contractor shall notify the WIC program of any change of ownership, retailer name, location and/or cessation of operation for any reason no later than the tenth of the month prior to the effective date of the change.

(29) Contractors shall observe time lines, such as deadlines for submitting price lists and returning properly signed contracts. Failure of contractors to do so may result in denial of authorization.

(30) Contractors shall take corrective action as directed by the WIC program.

[]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-090 ((Food vendor monitoring.)) How are WIC retailer contracts monitored? (1) The ((department shall identify high-risk food vendors and ensure)) WIC program conducts on-site ((monitoring, further investigation, and sanctioning of such food vendors. Criteria for identifying high-risk vendors shall include, but not be limited to, such considerations as participant complaints and the amount or frequency of suspected overcharges or other improper handling of redeemed food instruments)) compliance reviews at retailer locations to monitor retailer compliance with program requirements.

(2) ((The department shall conduct on-site monitoring visits as required by CFR 246. Vendors shall take corrective action as directed by the department.

(3) The department shall submit a summary of the results of the monitoring of high-risk and representative food vendors and of the review of food instruments to USDA Food and Nutrition Service on an annual basis within four months after the end of the federal fiscal year.

(4))) Preauthorization visits.

(a) Visit is scheduled in advance.

(b) The WIC program representative identifies self.

(c) The WIC program representative provides training on the WIC retailer handbook which includes information on WIC foods and WIC check handling, and collects information on WIC food stock levels and shelf prices.

(d) The retailer signs the preauthorization visit form verifying receipt of the training, understanding of program requirements, and the commitment to train store personnel.

(3) Compliance visits.

(a) Visit may or may not be scheduled in advance;

(b) The WIC program representative identifies self;

(c) The WIC program representative may do some or all of the following during a visit: Review WIC check handling procedures, WIC food stock levels, expiration dates and prices, WIC checks negotiated but not yet deposited, shelf price records, wholesale receipts, cash and carry receipts, purchase orders, books of account, invoices that identify the quantity and prices of specific WIC foods, and other pertinent records that substantiate the volume and prices charged, provide training or technical assistance, and verify implementation of a corrective action plan.

(d) The ((department shall)) WIC program representative documents ((the following for all on-site vendor monitoring visits:

(a))) the name((s)) of ((vendor, reviewer, and, except for compliance buys,)) the retailer, the name of the program representative, the names of all persons interviewed((;

(b))), the date of ((review;

(c) Nature of problem or)) the visit, any problems or concerns detected or the observation ((that)) the ((food vendor)) retailer appears to be in compliance ((with program requirements;

(d))), any corrective action plan if ((the deficiencies)) problems are detected, ((how the food vendor plans to correct those deficiencies;)) and

(((e))) the signatures of ((reviewer)) the program representative and the retailer.

(((5) Methods of on-site monitoring visits include, but are not limited to:

(a))) (4) Compliance purchases((;

(b) Review of cashier check-out procedures;

(c) Review of inventory records;

(d) Review of the availability, prices, and expiration dates of authorized WIC foods; and

(e) Review of food instruments negotiated the day of the review.

(6) The department may conduct compliance purchases to collect evidence of improper food vendor practices, or arrange for this responsibility to be assumed by the proper federal, state, or local authorities.

(7) The department shall establish procedures to document the handling of complaints by WIC participants against food vendors. The department shall deal with complaints of civil rights discrimination in accordance with 7 CFR 246.8(b).

(8) The department shall establish procedures to document the handling of complaints by food vendors against WIC participants or other food vendors)).

(a) The WIC program representative does not identify self;

(b) The WIC program representative makes a purchase using WIC checks applying a predetermined methodology;

(c) The WIC program representative completes a report on the visit itemizing information including but not limited to, a description of the checker involved, the time and date of the transaction, the number of checkstands opened and closed, other customers in line, exact items purchased and/or refused, the prices charged or the purchase prices, comments of the checker, observations of the investigator or the investigative aide, any stock deficiencies noted, any other pertinent information, and the signature of the investigator.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-090, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-090, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-030, filed 6/6/90, effective 7/7/90; 88-14-037 (Order 2638), 388-19-030, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-100 ((Food vendor sanctions.)) What happens if I don't comply with the WIC retailer contract or rules? (1) ((The department may disqualify a food vendor for reasons of program abuse, and terminate the food vendor's participation in the WIC program for a specified period of time. At the end of the disqualification period, the food vendor shall be required to reapply for authorization.

(2) Food vendors may be subject to sanctions in addition to, or in lieu of, disqualification, such as fines for improperly handled food instruments. Prior to disqualifying a food vendor, the department shall consider whether the disqualification would create undue hardships for WIC participants.

(3) The department shall set the period of disqualification from program participation at a minimum of one year and shall not exceed three years.

(4) The department shall disqualify a food vendor from the WIC program if that food vendor is suspended or disqualified from another FNS program.

(5) The department shall recover funds due the WIC program and impose a fine of not less than one hundred dollars on food vendors for the offenses in subsection (5) of this section. The department shall account for these funds in accordance with federal regulations.

Money shall be paid to the department within the time period specified in the notice of adverse action or the food vendor shall be disqualified from the WIC program for a period of at least one year. Offenses include:

(a) Providing cash, unauthorized food, nonfood items, or other items to WIC customers in lieu of or in addition to authorized WIC supplemental foods;

(b) Charging the WIC program for foods not received by the customer;

(c) Charging the WIC program more for authorized WIC supplemental foods than other customers are charged for the same food item;

(d) Providing rain checks or credit to customers in a WIC transaction;

(e) Charging WIC customers cash or giving change to customers in a WIC transaction; and

(f) Redeeming WIC food instruments without having authorization from the department.

Repeating any offense listed in subsection (5) of this section shall subject a food vendor to additional sanctions including disqualification.

(6) A food vendor who fails to give the specified notice of a change in ownership, store name, and/or location shall be liable for resultant costs incurred by the WIC program. In addition, a food vendor who fails to furnish the state WIC office with written notice of a change in ownership before the effective date of sale shall be subject to a fine of not less than one hundred dollars.

(7) A food vendor's failure to maintain a sufficient stock of WIC authorized foods or to follow the appropriate WIC food instrument cashing procedure may result in a one-year disqualification.

(8) Food vendors who have willfully misapplied, stolen, or fraudulently obtained program funds shall be subject to a fine of not more than one thousand dollars or imprisonment for not more than five years or both, if the value of the funds is one hundred dollars or more. If the value is less than one hundred dollars, the penalties are a fine of not more than one thousand dollars or imprisonment for not more than one year or both. The department shall refer these food vendors to federal, state, or local authorities for prosecution under applicable statutes.)) Retailers who commit acts of noncompliance are liable to prosecution in accordance with federal regulations (7 CFR 246.12 and 7 CFR 246.23). Noncompliance is failure to follow WIC program requirements including, but not limited to:

(a) Providing cash, unauthorized food, nonfood items, or other items to WIC customers in lieu of or in addition to authorized WIC supplemental foods;

(b) Selling or offering to sell foods with expired shelf lives;

(c) Charging the WIC program for foods not received by the customer;

(d) Charging the WIC program more for authorized WIC supplemental foods than other customers are charged for the same food;

(e) Inflating the purchase price of a WIC transaction;

(f) Providing rain checks or credit to customers in a WIC transaction;

(g) Charging WIC customers cash or giving change in a WIC transaction;

(h) Redeeming WIC checks without having authorization from the WIC program;

(i) Failing to write the actual purchase price on the WIC check at the time of the WIC transaction; and

(j) Failing to maintain adequate stock of WIC foods on the retailer's shelves.

(2) The WIC program may deny payment to, impose monetary penalties on and disqualify retailers for noncompliance with WIC program requirements and terms of the retailer contract.

(3) The WIC program shall seek reimbursement from retailers for documented overcharges and for payments made on improperly handled WIC checks.

(4) Retailers found in noncompliance, except for the offenses listed in subsection (9) of this section, will be notified by the WIC program and given the opportunity to correct the deficiency. Methods of notification include, but are not limited to, technical assistance contacts and notice of correction letters. Repeating any act of noncompliance may subject a retailer to sanctions.

(5) When the WIC program denies a retailer authorization, denies payment, imposes a monetary penalty, requests reimbursement, or disqualifies a retailer, the program shall give the contractor written notice not less than fifteen days prior to the effective date of the action. The notice shall state what action is being taken, the effective date of the action, and the procedure for requesting an appeal hearing.

(6) Monetary penalties shall be imposed when noncompliance of a same or similar type of noncompliance occurs following notification and the opportunity for correction.

(7) Monetary penalties, in accordance with federal regulations, are:

(a) If the value of the unauthorized items was less than one hundred dollars, the monetary penalty shall be not less than one hundred dollars and not more than one thousand dollars.

(b) If the value of the unauthorized items was one hundred dollars or more, the monetary penalty shall be not less than five hundred dollars and not more than ten thousand dollars.

(8) Monetary penalties and reimbursements shall be paid to the revenue section of the department within the time period specified in the notice. Retailers who fail to pay within the time period specified in the notice shall be referred to a commercial collection agency and may be disqualified.

(9) The WIC program shall disqualify the WIC retailer for the following, after providing advance notice of not less than fifteen days:

(a) Redeeming a WIC check for the purchase of any form of alcohol or tobacco;

(b) Purchasing a WIC check for partial value and redeeming at full value (commonly referred to as trafficking or discounting);

(c) Redeeming a WIC check for the purchase of nonfood items;

(d) Using a pattern of overcharging;

(e) Noncomplying in a same or similar nature following notification and the opportunity for correction;

(f) Being disqualified from the food stamp program by the food and consumer service.

(10) The WIC program shall disqualify the retailer from the WIC program for a specified period of time, not to exceed three years. At the end of the disqualification period, the retailer must reapply to be considered for authorization.

(11) Prior to disqualifying a retailer, the WIC program shall consider whether the disqualification would create undue hardships for WIC clients. In these cases, the WIC program may agree on a monetary penalty in lieu of disqualification.

(12) A contractor who fails to give the specified notice of closure, a change in ownership, retailer name, and/or location shall be liable for resultant costs incurred by the WIC program.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-100, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-100, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-035, filed 6/6/90, effective 7/7/90; 88-14-037 (Order 2638), 388-19-035, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-120 ((WIC food vendor--Administrative review--Contract dispute resolution.)) How do I appeal a WIC decision I don't agree with? (1) ((Administrative review.

(a) A food vendor whose application to participate in the WIC program is denied has the right to administrative review which is an informal meeting between the department and the food vendor to discuss the reasons for the denial. With the exception of required reimbursements, contracted food vendors dissatisfied with department decisions regarding sanctions or affecting the food vendor's participation may request an administrative review.

(b))) The contractor may appeal notice of denial of payment, denial of authorization, monetary penalty, reimbursement, or disqualification. Expiration and nonrenewal of a WIC contract is not subject to appeal.

(2) When the action being appealed is disqualification, the retailer shall cease redeeming WIC checks effective the date specified in the notice and shall not accept WIC checks during the appeal period. Payments shall not be made for any WIC checks redeemed by a retailer during a period of disqualification.

(3) A request for an ((administrative review)) appeal hearing shall be in writing and:

(((i))) (a) State the issue raised;

(((ii) State the grounds for contesting the aggrieving department action;

(iii) State the law and allegations of fact on which the appeal relies;

(iv) Contain the appellant's current address and telephone number, if any; and

(v))) (b) Contain a summary of the contractor's position on the issue, indicating whether each charge is admitted, denied, or not contested;

(c) State the name and address of the contractor requesting the appeal hearing;

(d) State the name and address of the attorney representing the contractor, if applicable;

(e) State the contractor's need for an interpreter or other special accommodations, if necessary; and

(f) Have a copy of the ((adverse department)) notice from the program attached.

(((c))) (4) A request for an ((administrative review)) appeal hearing shall be ((made by personal service on parent-child health services headquarters office or by certified mail to the address given in the notice of adverse action)) filed at the Office of Professional Standards (OPS), Department of Health, P.O. Box 47872, Olympia, WA 98504-7872. The request shall be made within ((thirty)) twenty days of the date the ((food vendor)) contractor received the notice ((of adverse action. When the request is mailed, it shall be treated as having been made on the date it was postmarked provided it is received by the division of parent-child health services properly addressed and with no postage due.

(d) The director of parent-child health services, or the director's designee, shall conduct the administrative review)).

(5) The ((time limit for making the determination is thirty)) decision concerning the appeal shall be made within sixty days from the date the request for an ((administrative review)) appeal hearing was received by the office of professional standards (OPS). The time shall be extended by as many days as the ((vendor)) contractor requests, assents to, or necessitates a delay in the proceedings with due cause.

(((e) Administrative review is the sole administrative remedy the department offers a WIC contract applicant. Contracted food vendors dissatisfied with administrative review decisions may request a contract dispute resolution.

(2) Contract dispute resolution.

(a) A WIC food vendor who is disqualified from participating in the program or who is aggrieved by any other adverse action the department takes which affects participation, has the right to a contract dispute resolution. This shall not apply to a nonrenewal of the contract.

(b) A request for a contract dispute resolution shall be in writing and:

(i) State the issue raised;

(ii) State the grounds for contesting the aggrieving department action;

(iii) State the law and allegations of fact on which the appeal relies;

(iv) Contain the contractor's current address and telephone number, if any; and

(v) Have a copy of the adverse department notice attached.

(c) A request for a contract dispute resolution shall be made by personal service on the office of contracts management in Olympia or by certified mail addressed to the Office of Contracts Management, 1300 SE Quince, P.O. Box 47902, Olympia, Washington 98504-7902. The request shall be made within thirty days of the date the contractor received the notice of adverse action. When the request is mailed, it shall be treated as having been made on the date it was postmarked provided it is received by the office of contracts management properly addressed and with no postage due.

(d) The time limit for making the determination is thirty days from the date the request for a contract dispute resolution was received by the office of contracts management. The time shall be extended by as many days as the contractor requests, assents to, or causes a delay in the proceedings.

(e) The contract dispute resolution is the sole administrative remedy the department offers a WIC contractor.))

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-120, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-120, filed 12/18/90, effective 1/18/91; 90-12-112 (Order 2960), 388-19-045, filed 6/6/90, effective 7/7/90; 88-18-022 (Order 2681), 388-19-045, filed 8/30/88; 88-14-037 (Order 2638), 388-19-045, filed 6/30/88.]

AMENDATORY SECTION (Amending Order 314, filed 10/27/92, effective 11/27/92)

WAC 246-790-130 ((WIC contractor--Continued participation pending contract dispute resolution.)) How does the WIC program get input from the food industry? (((1) If the action being appealed is a disqualification of a WIC authorized food vendor, that food vendor shall cease redeeming WIC checks effective on the date specified in the sanction notice. The food vendor shall not accept WIC food instruments during the appeal period. Payments shall not be made for any food instruments submitted by a food vendor for payment during a period of disqualification.

(2) The department may at its discretion permit the contractor to continue participating in the WIC program pending the proceedings outcome when implementing the action would unduly inconvenience WIC participants.)) (1) The WIC program may establish a retailer advisory committee for the purpose of soliciting input on policies, procedures, and other matters pertinent to retailer participation in the WIC program.

(2) The retailer advisory committee shall meet at least two times per year.

(3) The membership of the retailer advisory committee will consist of representation of at least the following:

(a) The Washington food industries;

(b) Manager or checker trainer from a large chain;

(c) Manager or checker trainer from a small chain;

(d) Minority-owned retailer;

(e) Instructor of a checker training program with a technical college;

(f) Local WIC agency staff person;

(g) Current or former WIC client;

(h) Administrative representative, such as loss prevention or risk manager or human resources representative, from any size retailer;

(i) Owner of an independent retailer (single store); and

(j) A military commissary.

[Statutory Authority: RCW 43.70.120. 92-22-036 (Order 314), 246-790-130, filed 10/27/92, effective 11/27/92. Statutory Authority: RCW 43.20A.550. 91-01-097 (Order 3117), recodified as 246-790-130, filed 12/18/90, effective 1/18/91; 88-18-022 (Order 2681), 388-19-050, filed 8/30/88; 88-14-037 (Order 2638), 388-19-050, filed 6/30/88.]

REPEALER

The following section of the Washington Administrative Code is repealed:

WAC 246-790-110 Notice of adverse action to WIC food vendor--Denial of food vendor application, contract nonrenewal.

Legislature Code Reviser

Register

Washington State Code Reviser's Office