3701-42-03 WIC vendor authorization.

 

 

 

TO BE RESCINDED

 

3701-42-03                  WIC retail vendor authorization.

 

 

 

(A)    Any sole proprietorship, partnership, cooperative association, corporation, limited liability company or other business entity that owns and operates a grocery store or a pharmacy in a county served by a retail food delivery system may apply to the director for authorization to be a vendor in accordance with this rule. The director shall authorize vendors by entering into contracts with applicants that the director has selected in accordance with the criteria established under this rule. The contracts shall be for terms of no more than three years. Unless otherwise provided in this rule, contract beginning dates shall be consistent with paragraph (C) of this rule.

 

(B)    To apply for a contract, an applicant or authorized representative of the applicant shall complete an application packet on forms prescribed by the director. The applicant shall deliver the completed application to the director by hand-delivery,

U.S. mail, or overnight mail at the address indicated on the application form. It is the applicant's responsibility to obtain documentation of the director's timely receipt of the application.

 

(1)   The completed application must be postmarked or received by the director no fewer than one hundred twenty days before the contract beginning date, as set forth in paragraph (C) of this rule.

 

(a)   If an application is received timely but the application is not complete, the director may request additional information to make the application complete or accurate. The additional information must be postmarked or received by the director no fewer than ninety days before the contract beginning date, as set forth in paragraph (C) of this rule.

 

(b)   If a complete application is postmarked or received by the director fewer than one hundred twenty days before the contract beginning date, as set forth in paragraph (C) of this rule, but before the ninetieth day before the contract beginning date, the director may consider the application for approval as a cost containment contract only.

 

(c)      Except as provided in paragraph (B)(2) of this rule, if a complete application is postmarked or received by the director fewer than ninety days before the contract beginning date, as set forth in paragraph (C) of this rule, the application will not be considered.

 

(2)    If an application, which is complete except for verification of food stamp authorization, is received by the director within the time periods listed in

 

 

 

paragraph (B)(1) of this rule, and the applicant has a food stamp application pending, the director may consider the application for approval in accordance with paragraph (B)(1)(a) or paragraph (B)(1)(b) of this rule, whichever is applicable, if a copy of the food stamp certificate is received prior to the contract beginning date.

(3)    If the applicant does not own or operate the business at the location that the applicant is proposing to contract as a vendor at the time of application, the applicant may submit the application and include the address of the location and the estimated opening date. The director shall process the application to the extent possible and complete the processing of the application upon the opening of the location. Once the application has been fully processed, the director may contract with the applicant for the location provided that the applicant and location comply with all other requirements of this rule. The applicant may not service participants until the director notifies the vendor that the location may begin accepting food instruments.

(4)   Notwithstanding the application submission requirements set forth in paragraph (B)(1) of this rule and the contract beginning dates in paragraph (C) of this rule, the director may approve a contract under either of the two conditions set forth below. The contract beginning date shall be the date specified in paragraph (C) of this rule or the date the contract is signed by the director and shall expire at midnight the day prior to the next contract beginning date specified in paragraph (C) of this rule.

(a)   A vendor in good standing with the WIC and FNS food stamp programs may apply at any time to add a location to an existing contract within the same region if the proposed location is under the same tax identification number and the vendor has not been denied a WIC contract at that location within the previous twelve months.

(b)    An applicant who purchases or otherwise acquires a store or pharmacy that is a current vendor location in good standing, may apply for a new WIC contract for that location provided that the application meets all other requirements of this rule.

(i)     If the location is disqualified for a period of time less than a permanent disqualification or is in the process of being disqualified from the WIC program or FNS food stamp program at the time the applicant purchased or otherwise acquired the store or pharmacy, the director shall not enter into a contract for that location until after the expiration of the disqualification period.

(ii)   If the location is permanently disqualified, the director may consider approving that application no earlier than six years after the effective date of the disqualification.

(5)     The director may accept applications for a contract to begin in one year increments from the contract beginning date specified in paragraph (C) of this rule for that region. Approved applications shall be referred to as pick-up contracts and shall expire at midnight the day prior to the next contract beginning date specified for that region. The completed application for a pick- up contract must be postmarked or received by the director no fewer than one hundred twenty days before the pick-up contract beginning date.

(a)   If an application is received timely in accordance with paragraph (B)(5) of this rule, but the application is not complete, the director may request additional information to make the application complete or accurate. The additional information must be postmarked or received by the director no fewer than ninety days before the pick-up contract beginning date.

(b)   If a complete application is postmarked or received by the director fewer than one hundred twenty days before the pick-up contract beginning date, the director may consider the application for approval as a cost containment contract only.

(c)     Except as provided in paragraph (B)(2) of this rule, if a complete application is postmarked or received by the director fewer than ninety days before the contract beginning date, the application will not be considered.

(6)    Except as otherwise provided in this rule, if an application is postmarked or received fewer than one hundred twenty days before the contract beginning date, as set forth in paragraph (C) of this rule, or is received after the contract beginning date, the application shall be considered late and shall not be processed for that contract beginning date.

(C)  The regions and contract beginning dates shall be as follows:

(1)     Region one shall consist of Allen, Ashland, Auglaize, Crawford, Defiance, Delaware, Erie, Fulton, Hancock, Hardin, Henry, Huron, Knox, Lorain, Lucas, Marion, Morrow, Ottawa, Paulding, Putnam, Richland, Sandusky, Seneca, Union, Van Wert, Williams, Wood and Wyandot counties. The three-year contract beginning date for vendors in region one shall be July first

2005 and every third July first thereafter.

(2)   Region two shall consist of Ashtabula, Columbiana, Geauga, Lake, Mahoning, Medina, Portage, Stark, Summit, Trumbull, and Wayne counties. The three-year contract beginning date for vendors in region two shall be July first 2004 and every third July first thereafter.

(3)      Region three shall consist of Adams, Brown, Butler, Champaign, Clark, Clermont, Clinton, Darke, Fayette, Greene, Hamilton, Highland, Logan, Madison, Mercer, Miami, Montgomery, Preble, Shelby, and Warren Counties. The three-year contract beginning date for region three shall be January first 2005 and every third January first thereafter.

(4)    Region four shall consist of Athens, Belmont, Carroll, Coshocton, Fairfield, Franklin, Gallia, Guernsey, Harrison, Hocking, Holmes, Jackson, Jefferson, Lawrence, Licking, Meigs, Monroe, Morgan, Muskingum, Noble, Perry, Pickaway, Pike, Ross, Scioto, Tuscarawas, Vinton, and Washington counties. The three-year contract beginning date for region four shall be January first 2003 and very third January first thereafter.

(5)      Region five shall consist of Cuyahoga county. The three-year contract beginning date for region five shall be July first 2004 and every third July thereafter.

(D)   The director shall enter into a contract with an applicant if the applicant meets all of the following criteria and the addition of the location will not exceed the maximum locations for the county, as determined in accordance with paragraph (E) of this rule.

(1)      The applicant has truthfully, accurately and fully completed, signed and submitted to the department an application for a contract, including the following additional documentation:

(a)     Sufficient IRS documentation of his or her current federal employer identification number. Sufficient documentation shall include a current United States internal revenue service (IRS) deposit coupon, letter or mailing label that contains both the IRS insignia and the applicant's federal employer identification number;

(b)   Properly completed EFT form with a copy of a void check or deposit form for each location receiving reimbursement;

(c)       Verification   of   the   applicant's   current   FNS   food   stamp   program authorization;

(d)  Completed applicable vendor price survey; and

(e)   Any other documentation required by the director.

(2)     The applicant or one or more representatives of the applicant from each proposed location shall attend a vendor training session at the time and place set by the department or local WIC agency.

(3)     The applicant is in compliance with rule 3701-42-05 of the Administrative Code, specifically, the requirements for minimum authorized foods stocking, price posting, and purchasing infant formula from an authorized infant formula supplier.

(4)    The applicant, if a current WIC vendor, submitted the applicable vendor price surveys in compliance with the requirements set forth in rule 3701-42-05 of the Administrative Code.

(5)     If applicable, during the one year period prior to the date of application submission and during the review of the application, the applicant:

(a)    Had gross receipts of which not more than thirty percent were derived from the sale of alcoholic beverages;

(b)   Submitted for payment:

(i)     A  monthly  average  of  at  least  one  hundred  twenty  coupons  or equivalent WIC transactions for each contracted store location; or

(ii)     A  monthly  average  of  at  least  ten  coupons  or  equivalent  WIC transactions for each contracted pharmacy location; and

(c)   Had gross food sales of which less than fifty per cent were derived from WIC sales.

(6)    Neither the applicant nor any related or affiliated business entity is currently under disqualification from the WIC program or under disqualification, suspension, or withdrawal from the FNS food stamp program.

(7)     If the applicant was assessed an FNS food stamp civil money penalty for hardship in lieu of disqualification, the disqualification period that would have been imposed has expired.

(8)   The applicant has paid in full or is current in payment of any money owed to the department.

(9)   During the three years prior to the date of the application submission and during the review of the application:

(a)   The applicant has not been denied a lottery sales agent license or has not had a lottery sales agent license suspended or revoked by the director of the state lottery commission pursuant to section 3770.05 of the Revised Code;

(b)    Neither the applicant nor a current or former employee of the applicant while not an authorized vendor transacted and redeemed, food instruments at any time including the pendency of any administrative review, abbreviated review or other administrative or court proceeding. Notwithstanding this paragraph, the director may process an application if the applicant refunds to the department the sum of money paid to the applicant for food instruments transacted and redeemed while applicant was not authorized.

(10)    During the six years prior to submission of the application and during the review of the application, neither the applicant nor any of the applicant's current owners, officers, or managers, have been convicted of or had a civil judgment entered against them for any activity indicating a lack of business integrity. Activities indicating a lack of business integrity include fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, and obstruction of justice.

(11)    Upon request by the director, the applicant provides proof of any necessary local license, other regulatory approval to operate at each location specified in the application, or other documents to substantiate compliance with this rule. The director, at his or her discretion, may at any time require from any applicant or vendor additional documentation.

(12)    Entering into a contract will not create a conflict of interest as defined by applicable state laws, regulations, and policies between the vendor and the state agency or its local agencies.

(13)      Each location at which the applicant proposes to provide authorized supplemental foods is a fixed and permanent business location and is not at an address or within a building where food instruments are distributed.

(E)   The director shall not approve contracts that would exceed the maximum number of locations for the county. Prior to each regional contract beginning date, the director shall determine the maximum number of store and pharmacy locations using the most recent verifiable participant data available ensuring participant access to authorized supplemental foods.

(1)   The maximum number of store locations in a given county shall be determined by applying the following participant-to-store ratios:

(a)   In counties with four thousand or fewer participants, sixty participants per location; or

(b)   In counties with more than four thousand participants, one hundred fifty participants per location.

(2)   The maximum number of pharmacy locations in a given county shall be fewer than one and no more than three percent of the maximum number of store locations for that county.

(3)   If the director receives a number of applications for locations that meet all of the criteria set forth in paragraph (D) of this rule but, if all were approved, would exceed the maximum number of locations as determined by paragraph (E)(1) or (E)(2) of this rule, whichever is applicable, the director shall enter into a number of contracts not exceeding the maximum number of locations in accordance with the following requirements;

(a)    The director shall contract with those applicants for store locations that have the lowest total price for authorized supplemental food items specifically selected for comparison by the director, compared to the total price charged by other applicants for the same authorized supplemental food items in the same county as determined by the department's vendor price survey.

(b)    The director shall contract with those applicants for pharmacy locations that are geographically located within the county to meet participant needs and that have the lowest total price for special infant formulas specifically selected for comparison by the director, compared to the total  price  charged  by  other  applicants  for  the  same  special  infant

formulas in the same county as determined by the department's vendor price survey.

(c)   If two or more applicants have the same total price but cannot all receive a contract because the maximum number of locations would be exceeded, the director shall approve contracts for store locations in the order that their completed applications and vendor price surveys were postmarked in accordance with paragraph (B) of this rule. If two or more applicants for pharmacy locations have the same total price but cannot all receive a contract because the maximum number of locations would be exceeded, the director shall approve contracts based on the geographic need of the pharmacy location. If the applicants' pharmacy locations are of equal benefit to the participants, the director shall approve contracts in the order that their completed applications and vendor price surveys were postmarked in accordance with paragraph (B) of this rule.

(F)   Notwithstanding paragraphs (B) to (E) of this rule, the director may contract with an applicant that has a current FNS food stamp program certificate if the director determines that the locations proposed by the applicant are needed to provide participants or alternate shoppers with appropriate access to authorized supplemental foods.

(G)   The director may approve a cost containment contract where specified elsewhere in this chapter and in the following cases. The cost containment contract shall remain binding on the vendor throughout the contract period as established in paragraph

(C)  of this rule.

(1)     The applicant did not meet the requirements under paragraphs (D)(5)(a) to (D)(5)(c) of this rule for justifiable reasons as determined by the director;

(2)   The location failed a pre-authorization site visit in that:

(a)       The location did not openly and visibly display the authorized supplemental foods in the required size, type, or brand and/or in the minimum quantity.

(i)     The shortage must have been in an amount not greater than ten percent of each required item; or

(ii)   The shortage was unavoidable, as determined by the director, due to reasons beyond the applicant's control, including labor strikes, natural disasters, or comparable events.

(b)   The location did not have current prices clearly marked or posted on the authorized supplemental food items or on a sign immediately next to or in front of the items.

(3)   The applicant meets all the requirements set forth in paragraph (D) of this rule, except that the application was not filed timely and the application is for a location that was disqualified, and the disqualification period has expired.

(H)   Before the director enters into a contract with an applicant, the department or local WIC agency shall conduct a pre-authorization site visit of each proposed location in accordance with paragraph (H) of rule 3701-42-06 of the Administrative Code. Except as provided in paragraph (G) of this rule, the director shall deny the application for each location not in compliance with the applicable requirements prescribed by paragraphs (B) to (E) of rule 3701-42-05 of the Administrative Code.

(I) Except as otherwise provided in this rule, the director shall deny an application for authorization as a vendor if any of the criteria specified in paragraph (D) of this rule are not met. The director may impose a civil money penalty in lieu of denying an application if the director determines that it is in the best interests of the WIC program. The amount of the civil money penalty will not exceed two thousand five hundred dollars. In accordance with paragraph (B) of rule 3701-42-09 of the Administrative Code, a denial of an application shall be effective fifteen days from the date of the mailing of the denial notice.

(J)      The director may deny a vendor application if the applicant has a history of non-compliance with the requirements of this chapter of the Administrative Code or if the director determines that the applicant provided false information in connection with its application for authorization.

(K)     At the director's discretion, the director may require an applicant or vendor to establish an electronic transaction system which may include, point of sale devises, scanners etc. at each location capable of serving WIC participants. A vendor shall be notified at least sixty days before the effective date of this requirement. The director shall terminate a vendor's contract if the vendor fails to comply with this requirement.

(L)    The contract does not become effective until signed by the applicant or applicant's authorized representative and the director.

Effective:                                                     04/01/2011

R.C. 119.032 review dates:                         10/18/2010

CERTIFIED ELECTRONICALLY

Certification

01/20/2011

Date

Promulgated Under:                           119.03

Statutory Authority:                           3701.132

Rule Amplifies:                                  3701.132

Prior Effective Dates:                         1/10/1992 (Emer.), 4/12/92, 4/1/94, 1/26/96, 6/21/97, 6/21/04, 3/20/06