3701-42-03 WIC 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 in accordance with this rule. The director shall authorize a vendor by entering into a contract with an applicant that meets the criteria established under this rule. The contract shall be for a term of no more than three years. Unless otherwise provided in this rule, the contract beginning date 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. It is the applicant's responsibility to obtain documentation of the director's timely receipt of the application.

(1) A complete application 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. Except as provided in paragraph (B)(2) of this rule, if any part of the 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 be deemed incomplete and denied.

(2) If an application, which is complete except for verification of food assistance program authorization, is received by the director within the time periods listed in paragraph (B)(1) of this rule, and the applicant has a food assistance program application pending, the director may consider the application for approval if a copy of the food assistance program authorization 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 complies with all other requirements of the rule. The applicant may not transact and redeem food instruments until the director notifies the vendor that the location may begin accepting food instruments.

(4) Notwithstanding the application submission requirements set forth in paragraphs (B)(1) and (C) of this rule, the director may approve a contract under either of the three conditions set forth in this paragraph. 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, whichever is later, 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 food assistance 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 grocery 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 and the director determines the purpose of the sale was not to circumvent a WIC sanction.

(c) An applicant who establishes a business operation within the last twelve months, and has not been denied a contract during that time, but misses the application deadline for that business location's region may request and submit an application during the next available scheduled application contract period as set forth in paragraph (B)(5) of this rule. The director shall enter into a contract with the applicant if the application is received timely as set forth in paragraph (B)(1) of this rule, and meets all contracting criteria as set forth in paragraph (D) of this rule, and the addition of the business location will not exceed the maximum locations for the county, as determined in accordance with paragraph (E) of this rule. The contract shall expire at midnight the day prior to the next three year contract beginning date specified for that business location's designated region set forth in paragraph (C) of this rule.

(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 ninety days before the pick-up contract beginning date. Except as provided in paragraph (B)(2) of this rule, if any part of the application is postmarked or received by the director fewer than ninety days before the contract beginning date, the application will be deemed incomplete and denied.

(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 2008 and every third July first thereafter.

(2) Region two shall consist of Ashtabula, Columbiana, Cuyahoga, 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 2010 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 2011 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 2009 and every third January first thereafter.

(D) The director shall enter into a contract with an applicant if the application was received timely, 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 application contains truthful and accurate information and is signed by an authorized representative. The application shall include:

(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 for each location receiving reimbursement;

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

(d) Declaration of material assistance certification;

(e) Verification that infant formula is purchased from an authorized supplier;

(f) Completed applicable price survey; and

(g) Any other documentation or information requested by the director.

(2) The applicant or one or more representatives of the applicant from each proposed location attends a training session at the time and place set by the department.

(3) The proposed location is in compliance with the minimum authorized food stocking requirement set forth in rule 3701-42-05 of the Administrative Code.

(4) The applicant, if a current WIC vendor, responded to the applicable price survey in compliance with the requirements set forth in rule 3701-42-06 of the Administrative Code.

(5) The applicant, if a current grocery store vendor, during the one year period prior to the contract beginning date as set forth in paragraph (C) of this rule:

(a) Submitted for payment a monthly average of at least one hundred twenty coupons or equivalent WIC transactions for each contracted grocer location; and

(b) Had WIC sales of less than fifty per cent of gross food sales.

(6) Neither the applicant nor any of the applicant's current owners, officers, or managers, is currently under disqualification from the WIC program or under disqualification, suspension, or withdrawal from the food assistance program.

(7) If the applicant was assessed a food assistance program civil money penalty 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 contract beginning date set forth in paragraph (C) of this rule:

(a) The applicant has not been disqualified as a licensed lottery sales agent, had a lottery sales agent license suspended or revoked pursuant to Chapter 3770. of the Revised Code; and

(b) Neither the applicant nor a current or former employee of the applicant while an unauthorized 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 or pays a civil money penalty not to exceed two thousand five hundred dollars.

(10) During the six years prior to the contract beginning date set forth in paragraph (C) of this rule, 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, is not at an address or within a building where food instruments are distributed and is open to the general public for the purchase of food items.

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

(1) The maximum number of grocery 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;

(b) In counties with more than four thousand participants but less than eight thousand participants, one hundred twenty participants per location; and

(c) In counties with more than eight thousand participants, one hundred eighty participants per location.

(2) The maximum number of pharmacy locations in a given county shall be no more than four percent of the maximum number of grocer 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 grocer locations, that will be operating within the applicable county by the contract begin date, that have the lowest total price for authorized supplemental food items specifically selected for comparison by the director. For purposes of this determination, the director shall develop a price survey and identify on the survey selected WIC authorized food items in a specified size, type, and brand that will be used for comparison of prices. If the applicant does not complete the price survey or does not stock a specific item, the director shall assign a price for the item not completed on the survey by deeming the price to be the highest price reported by other applicants in that county.

(i) If two or more grocer applicants have the same total price, but all cannot receive a contract because the maximum number of locations would be exceeded, the director shall give priority to those locations that accept manufacturer coupons and discount cards.

(ii) If two or more grocer applicants have the same total price and accept manufacturer coupons and discount cards, but all cannot receive a contract because the maximum number of locations would be exceeded, the director shall approve store locations in the order the properly completed applications were received or post marked.

(b) The director shall contract with those applicants for pharmacy locations within the applicable county that have the lowest total price for authorized special infant formula specifically selected for comparison by the director. For purposes of this determination, the director shall develop a price survey and identify on the survey selected WIC special infant formulas that will be used for comparison of prices.

(i) If two or more pharmacy applicants have the same total price, but all cannot receive a contract because the maximum number of pharmacy locations would be exceeded, the director shall give priority to those locations that meet geographic need and are recommended by the local WIC director.

(ii) If two or more pharmacy locations are of equal benefit based on the geographic location and local WIC director recommendation, the director shall approve the pharmacy locations in the order the properly completed applications were received or post marked.

(F) Notwithstanding paragraphs (B) to (E) of this rule, the director may contract with an applicant that has a current food assistance 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) Before the director enters into a contract with an applicant, the department shall conduct a preauthorization site visit of each proposed location to determine compliance with rule 3701-42-05 of the Administrative Code.

(H) 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 interest of the WIC program. The amount of the civil money penalty shall not exceed two thousand five hundred dollars.

(I) 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.

(J) At the director's discretion, the director may require an applicant or vendor to establish an electronic transaction system which may include a point of sale device, scanner, or other equipment at each location contracted to serve WIC participants. A vendor shall be notified at least sixty days prior to the effective date of this requirement. The director shall terminate a vendor's contract if the vendor fails to comply with this requirement.

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

Effective: 06/20/2013
R.C. 119.032 review dates: 04/05/2013 and 04/01/2016
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, 4/1/11