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OLR Research Report


June 2, 2010

 

2010-R-0239

WIC PROGRAM VENDORS

By: Emilee Mooney Scott, Legislative Fellow

You asked how vendors become authorized to accept vouchers under Connecticut's Special Supplemental Nutrition Program for Women, Infants and Children (WIC). You also asked how this compares to the procedures that California uses.

SUMMARY

WIC was created by the United States Congress in 1972, and is managed at the federal level by the Department of Agriculture (USDA) (USDA, The WIC Program: Background, Trends, and Issues). Congress found that substantial numbers of infants; children; and pregnant, postpartum, and nursing women were at risk for health problems because of inadequate nutrition. In response, it provided funding for state public health departments to provide vouchers (known as food instruments or FIs) for certain especially nutritious foods (42 U.S.C. 1786). Covered foods include infant formula, milk, beans, eggs, canned tuna, and peanut butter (7 C.F.R. 246.10).

Only certain food vendors are authorized to accept FIs. State health agencies may limit the number of authorized vendors, balancing participant access to stores against the administrative burden of ensuring compliance. USDA reviewed Connecticut's WIC program in 2004, and concluded that the state had authorized too many vendors, which led to high program costs. As a result, the Connecticut Department of Public Health (DPH) now limits new WIC authorizations to geographical areas in need of further coverage. California has no such restriction.

AUTHORIZATION OF VENDORS

Federal Regulations

By federal law, state public health agencies “must authorize an appropriate number and distribution of vendors in order to ensure the lowest practicable food prices consistent with adequate participant access to supplemental foods and to ensure effective State agency management, oversight, and review of its authorized vendors.” State agencies are required to develop criteria for selecting vendors, and states must consider factors such as business integrity and the variety, price, and quantity of available foods. Consistent with the goal of ensuring effective enforcement, states may limit the number of stores authorized to accept FIs (7 C.F.R. 246.12(g)).

Connecticut

DPH administers Connecticut's WIC program. State regulations specify that vendors must: (1) “be necessary to the program,” as defined by regulation, (2) request an application package in writing, (3) submit a completed application package by the due date, and (4) pass an on-site inspection. DPH determines the number and distribution of necessary vendors by considering “store location, number of authorized stores in the area, the number of WIC participants in that area, adequate participant access and lowest prices charged by vendor” (Conn. Agencies Reg. 19a-59c-5).

DPH currently limits the number of new vendor authorizations because of USDA recommendations. In 2004, USDA conducted an evaluation of Connecticut's WIC program. In the report, the USDA noted that from 2002-2004, Connecticut's WIC food package (the set of authorized foods purchased through one FI) was among the most expensive in the country. According to USDA, DPH's “failure to implement effective [vendor] selection and limitation criteria contributes to an excessive number of authorized vendors—some of which are not price competitive—and high food package costs.” On average nation-wide, each WIC vendor served 151 participants. In Connecticut this average was only 58 participants per vendor, which supported USDA's conclusion that Connecticut had too many WIC vendors. USDA concluded that DPH “must develop a comprehensive vendor management plan” to reduce the food package cost (USDA, Connecticut WIC Program Management Evaluation Report, 2004).

According to department officials, DPH elected to manage the number of vendors by restricting new vendor authorizations to geographical areas in need of coverage. DPH conducts a needs assessment on a quarterly basis, which evaluates the ability of WIC participants to access vendors. The needs assessment allows DPH to identify geographical areas in need of coverage, and it posts a list of such areas on its website. DPH then accepts letters of intent from interested vendors, and conducts a preliminary assessment to determine if the vendor is eligible and within one of the desired geographical areas.

The DPH officials note that the department would not likely authorize a new vendor in an area adequately covered by existing vendors. Approximately 20 to 30% of WIC vendors drop out of the program in a given year, either voluntarily or because they fail compliance audits. As a result, interested parties are encouraged to check the needs assessments every quarter, as needs change. DPH officials also report that the department would be open to evidence from the vendor that it was actually “necessary” to the program. There is no formal appeals procedure for presenting such evidence; it would be presented in informal negotiations.

After screening letters of intent, DPH invites potential vendors to a day-long training session. DPH distributes formal application packages at the end of the training. The officials report that some vendors elect not to complete the application after attending the training session, apparently deciding that the WIC compliance requirements are too burdensome. DPH evaluates completed applications, and sends staff to perform on-site evaluations of the stores. The purpose of the inspection is to verify that the store stocks the proper types and quantities of WIC-eligible foods. If the store passes the inspection, DPH authorizes it to accept WIC FIs.

California

The California Department of Public Health (CA DPH) administers California's WIC program. By California regulations, “[a]ny retail outlet meeting certain food stocking requirements may apply to become an authorized food vendor.” Regulations also provide that CA DPH “may limit the number of food vendors in a geographic area taking into consideration the adequacy of participant access and the Department's ability to effectively manage review of authorized food vendors” (22 CCR 40735). CA DPH officials report, however, that the department does not typically restrict new vendor authorizations based on geographical location.

Vendors interested in becoming authorized under WIC may submit an application to CA DPH. Department officials review the application to ensure that the vendor is eligible and has not been barred from the program for prior noncompliance. Eligible vendors must complete a day-long training course on WIC compliance. CA DPH then conducts an on-site visit, ensuring that the store stocks the proper types and quantities of WIC-eligible foods. If the store passes inspection, CA DPH authorizes it to accept FIs.

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