Section 590. Reimbursement and payments

A. The state agency shall use a prepayment edit process to screen all deposited food instruments. For each processed food instrument, the state agency shall either:

1. Pay as submitted;

2. Make a price adjustment, if applicable; or

3. Deny payment of the deposited food instrument.

B. The state agency's reimbursement responsibilities in making payments against deposited and undeposited food instruments include, but are not limited to:

1. Ensuring payments are made to authorized retailers that have a signed retailer agreement with the Virginia WIC Program. Unauthorized retailers will not be paid for any mistakenly accepted and deposited food instruments;

2. Ensuring the maximum reimbursement levels used by its banking contractor, based upon peer groups, are reasonable for the food and formula items prescribed for purchase by participants;

3. Reconsidering for payment WIC food instruments not paid or partially paid provided the food instruments are submitted to the state agency within 50 calendar days of the first date printed on the food instrument;

4. Making price adjustments to the reimbursement amount paid to retailers in order to ensure individual retailer's reimbursement levels remain eligible for authorization, based upon competitive prices charged by similar retailers;

5. Collecting bank account and routing numbers from applicants and authorized retailers in order to process direct deposit ACH payments;

6. Ensuring prompt ACH credits are made to the retailer's bank account when appropriate;

7. Collecting retailer's prices using an electronic, Internet-based application;

8. Identifying retailers whose prices are noncompetitive and take administrative actions including possible termination of the retailer's authorization;

9. Complying with all federal regulations and guidelines that require administrative approval by USDA prior to making payments, as applicable;

10. Providing written communications to all authorized retailers containing the procedures used by the program to pay or deny payments for all deposited food instruments; and

11. Recouping overpayments due to banking or procedural errors, if applicable, from authorized retailers.

C. Authorized retailers must deposit food instruments within 14 calendar days of the last date printed on the food instrument.

D. Food instruments or image replacement documents (IRDs) rejected for payment due to "unreadable authorization stamp" or "no authorization stamp" error messages must be corrected and redeposited within 30 calendar days of the last date printed on the food instrument.

E. All food instruments or IRDs rejected for payment or undeposited food instruments require WIC Program review for exception payment consideration and must be submitted by the authorized retailer to the state agency. The state agency reserves the right to deny a submitted request for payment depending on the explanation provided by the retailer or bank of first deposit. Approved exception payments will only be made to an authorized retailer.

1. Retailers must submit their undeposited or rejected food instruments or IRDs and justifications to the state agency within 30 calendar days of the last date printed on the food instrument. A retailer must also simultaneously submit a written request and justification for payments on undeposited or rejected food instruments or IRDs.

2. Undeposited or rejected food instruments or IRDs sent to the state agency that are greater than 30 calendar days from the last date printed on the food instrument may not be eligible for payment and may require USDA approval.

3. Food instruments or IRDs rejected for payment due to a processing error that originates either at the federal reserve or bank of first deposit may be considered for an exception payment. The food instruments or IRDs must be submitted to the state agency within 120 calendar days from the first date to spend printed on the food instrument. A bank representative must submit a written request with the unpaid food instruments or IRDs.

F. A maximum allowable reimbursement amount for each peer group and food item combination is established using pricing data (7 CFR 246.12). Each food item combination is identified by a unique food instrument type identifier. More than 4,000 unique food combinations exist with different reimbursement maximum amounts. Authorized retailers that submit prices determined to be noncompetitive will not have their prices used when the state agency computes the maximum allowable reimbursement amount used for making price adjustments.

G. Retailers may only get reimbursed for mandatory and optional foods and formula products they have submitted prices for prior to redeeming food instruments for those products. Redeemed food instruments may be subject to repayment as a retailer claim if they include optional items for which a retailer has failed to submit prices. Retailers must ensure that the most current shelf prices have been submitted to the WIC Program for all mandatory items. Failure to submit prices or providing inaccurate prices for any mandatory food items may lead to a retailer's authorization being terminated unless inadequate participant access would exist.

H. Contract and special formulas where pricing information is collected via the Internet-based application by the state agency are eligible for payment to authorized. Prices are purposely not collected by the state agency for formulas that should not be redeemed at retailers. Food instruments redeemed for these types of special formulas are subject to repayment by the retailer.

I. A maximum reimbursement amount will be established for cash value food benefits used by participants to purchase fruits and vegetables. The amount written on the food instrument must not exceed the maximum reimbursement amount printed on it. For cash value food benefits only, the retailer must offer one of the following options to the participant if the total dollar amount being purchased exceeds the printed cash value:

1. The participant shall be allowed to pay the amount over the printed cash value; or

2. The participant shall be allowed to reduce the quantity of eligible fruits and vegetables being purchased.

Retailers must notify the state agency in writing which of these options they provide to WIC participants.

J. The food instrument type/peer group pricing maximum amount may be adjusted monthly by the state agency, depending upon external factors including, but not limited to, wholesale price increases. The reimbursement maximum used for the various food instrument types peer group combinations are not distributed to authorized retailers prior to being used by the banking contractor.

K. Food instruments or IRDs that are ineligible for payment and are rejected will be returned to the retailer's depository bank by the state agency's banking contractor. These returned food instruments will be stamped with a descriptive error message.

L. The state agency may make payment exceptions for food instruments that would normally be denied payment by its banking services contractor. The authorized retailer shall submit all such requests in writing, including a justification, within 30 calendar days from the last date printed on the food instrument. The state agency will send a payment disposition decision to the requestor within 30 calendar days, after receipt.

M. The state agency shall use a postpayment review process to prospectively evaluate the reimbursement amount paid against redeemed food instruments in order to identify excessive or improperly redeemed food instruments in accordance with federal regulations (7 CFR 246.12). From the postpayment review process, the state agency may determine that one or more payments already made to a retailer were ineligible for payment as a result of a retailer failing to submit pricing data for the purchased item or items. The state agency reserves the right to bill and recoup payments of these ineligible payments, which will be referred to as a retailer claim (7 CFR 246.12). The state agency shall not bill an authorized retailer if the retailer claim amount is less than $10.

N. A retailer that is not authorized to participate in the Virginia WIC Program that accepts a food instrument will not be reimbursed for any food instruments redeemed by a WIC participant.

O. A retailer must submit a direct deposit ACH form to the state agency that identifies any bank changes to its routing or account number. A direct deposit ACH form must be submitted at least 14 days prior to the change effective date. If the state agency's banking contractor identifies that the retailer's bank account or routing number is not valid, then the retailer will receive one written notice from the state agency. Failure by the retailer to resolve any reported discrepancies within 30 days after a written notice has been sent by the state agency may lead to the retailer being ineligible to receive payments for rejected food instruments.

P. Retailers are responsible for all bank handling fees and charges associated with doing business with the WIC Program.

Historical Notes

Derived from Volume 24, Issue 19, eff. May 26, 2008; amended, Virginia Register Volume 25, Issue 22, eff. July 6, 2009; Volume 26, Issue 10, eff. January 18, 2010; Volume 29, Issue 12, eff. March 13, 2013.

Statutory Authority

§ 32.1-12 of the Code of Virginia; 7 CFR Part 246.