Program Review and Investigations Committee





<MeetMDY1> July 9, 2015


Call to Order and Roll Call

Program Review and Investigations Committee met on<Day> Thursday,<MeetMDY2> July 9, 2015, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Danny Carroll, Chair, called the meeting to order. He welcomed new staff members and the secretary called the roll.


Present were:


Members:<Members> Senator Danny Carroll, Co-Chair; Senators Perry B. Clark, Christian McDaniel, Dan "Malano" Seum, Stephen West, and Whitney Westerfield; Representatives Tim Couch, David Meade, Terry Mills, Ruth Ann Palumbo, Rick Rand, and Arnold Simpson.


Legislative Guest: Representative Steve Riggs


Guests: Marvin Miller, Assistant Director, Division of Adult and Child Health Improvement; Fran Hawkins, Nutrition Services Branch; David Lovely, Staff Attorney; Cabinet for Health and Family Services


LRC Staff: Greg Hager, Committee Staff Administrator; Chris Hall; Chris Riley; Colleen Kennedy; William Spears; Shane Stevens; Joel Thomas; Ashleigh Hayes and Laura Tapp, Graduate Fellows; Kate Talley, Committee Assistant.


Minutes for June 11, 2015

Upon motion by Senator McDaniel and second by Senator Clark, the minutes for the June 11, 2015, meeting was approved by voice vote, without objection.


Presentation on the Kentucky Special Supplemental Nutrition Program for Women, Infants and Children

Marvin Miller made a presentation on the Kentucky Special Supplemental Nutrition Program for Women, Infants and Children (WIC). WIC, established in 1966, is governed by the US Department of Agriculture (USDA). The first WIC clinic was in Pineville in 1974. The four pillars of WIC are nutrition education, healthy food, healthcare referrals, and breastfeeding support. Studies have measured the positive outcomes for WIC services. For example, WIC prenatal care reduces the rate of preterm births and very low birth weight babies. Four or five year olds whose mother participated in WIC had higher vocabulary test scores.


As of September 2014, there were 123,123 participants in WIC in Kentucky (29,519 women; 30,930 infants; and 62,674 children).


 USDA provides 100 percent of the funding. Funding for federal fiscal year 2015 is $88.6 million: $66.5 million for food benefits; $7.9 million for nutrition education; $946,800 for breastfeeding education, support, and promotion; $13.3 million for client services, and $9.5 million for program management. Program management includes vendor monitoring.


Eligible WIC participants are women who are pregnant, breastfeeding, or postpartum; infants less than 1 year old; and children aged 1 to 5. Participants must be Kentucky residents and meet income eligibility criteria. The income criterion is 185 percent of poverty level or through participation in another income-based program such as Medicaid. Each participant gets an individualized package of food based on her or his needs that can be purchased with an eWIC card. There are approximately 400 food packages.


Vendors are governed by federal and state regulation. They must complete the application process, meet authorization criteria and be approved before redeeming eWIC cards. Applicant vendors receive an onsite visit to review inventory and pricing. Kentucky has 753 authorized vendors. Vendors are monitored at least once every 2 years; receive training annually, either face to face or through video conference or a memo/newsletter; and receive technical assistance or training based upon monitoring or review of transactions. Five percent of vendors receive compliance investigations. Vendors who violate the program receive sanctions, which can include disqualification from the program. Examples of violations are sale of alcohol in exchange for WIC benefits, overcharging, providing unauthorized food items, and charging for food items not received. A vendor has a right to a hearing.


In response to questions from Senator McDaniel, Mr. Miller said the agency does not approve beverages and food with high sugar content for WIC purposes. Restaurants are not approved as WIC vendors. Convenience stores can be approved if they meet certain requirements. That is important because WIC recipients need program flexibility so they can purchase some items such as milk as they run out. The eWIC card allows this flexibility. Mr. Miller said WIC currently has about 115,000 recipients compared to 130,000 in past years. This downward trend in WIC participation has probably resulted from the decline in available jobs since 2008. If a community lacks WIC-approved food vendors, community leaders encourage local stores to apply to become WIC vendors.


In response to a question from Senator Carroll, Mr. Miller differentiated WIC from SNAP by explaining that SNAP allows purchases of food and drink that would not be allowed under WIC. Examples include soft drinks and potato chips. Ms. Hawkins added that another difference is that WIC food categories are time-limited.


In response to a question from Senator Seum, Mr. Miller said the WIC program follows the child, meaning the child receives food under WIC even if a caretaker is not eligible.


In response to questions from Representative Riggs, Ms. Hawkins said WIC vendor investigation is conducted on two levels. An evaluation is conducted every 2 years. A separate compliance review is conducted on 5 percent of all WIC stores annually. Vendors can be trained via in-person training sessions once per year or via newsletter articles updating them on recent program changes. The agency asks vendor management whether or not they wish to receive additional training.


In response to a question from Representative Riggs, Mr. Lovely said the Cabinet for Health and Family Services (CHFS) does not provide the names, addresses, and websites of vendors in connection with their being investigated for fraud in accordance with USDA responses to public comment in the Federal Register. USDA officials have indicated their position is that identifying information about vendors undergoing a fraud investigation cannot be released publicly.


Representative Riggs raised the question of whether the name of a WIC recipient being investigated for WIC fraud can be made public. The answer was left undetermined.


Representative Riggs and Mr. Lovely noted different ways in which other states interpret the USDA regulation on publicly identifying WIC vendors undergoing WIC fraud investigation.


In response to questions from Senator Carroll, Ms. Hawkins said the sanctions invoked against WIC vendors found to have committed fraud are WIC penalties. A criminal charge would be brought by another entity, not by WIC. Law enforcement approaches the agency if it independently suspects a criminal violation.


Mr. Lovely added that the agency is not required to notify law enforcement of a WIC violation, since WIC only enforces administrative sanctions. The agency would cooperate with law enforcement if asked. An administrative sanction resulting from fraud would remove the vendor from the WIC program.


Upon a further question from Senator Carroll, whether or not the agency has a duty to report a violation of law was left undecided.


In response to a question from Representative Riggs, Mr. Lovely said he was not sure if there are other kinds of businesses in which the state keeps identity confidential where a law has been violated.


In response to a question from Senator Carroll, Mr. Lovely said he did not know of another state being sanctioned for releasing identity information concerning a vendor found to have violated WIC program regulations.


In response to a question by Representative Couch, Ms. Hawkins said that WIC vendors are required to keep on their shelves four gallons of whole milk and 10 gallons of 1 percent milk. At the time the vendor described in a June 13, 2015 Lexington Herald-Leader article was approved as a WIC vendor, it met required criteria.


In response to a question from Senator McDaniel, Mr. Lovely explained further that the agency does not release the name and address of stores found to be in violation of WIC program regulations.


Representative Palumbo commented that she would like to work with CHFS to ensure vendors who sell over-priced food in the WIC program be removed from the program.


In response to a question from Senator Westerfield, Mr. Lovely said the USDA seems to be considering a change in its regulation and intent and the agency plans to monitor for changes.


Senator Westerfield asked Mr. Lovely to look into what sanction would occur if confidentiality was violated.


In response to questions from Senator Carroll and Senator McDaniel, Mr. Lovely said that even when an investigation is completed, release of vendor identify can only be made to specified entities. Such entities include other WIC vendors and vendor applicants but do not include the general public.


In response to questions from Senator West, Mr. Lovely said that he has discussed the agency’s interpretation of the relevant federal regulation with USDA officials. It is their opinion that states have no leeway to release the information in question to the public.


In response to a question from Senator Carroll, Ms. Hawkins said two of the most common WIC vendor offenses are overcharging and providing unauthorized food. Some vendors are repeat offenders. Ms. Hawkins explained that certain requirements must be met to be released from the program, such as two overcharge offences.


In response to a question from Representative Mills, Mr. Lovely said it is possible a legislator setting policy could be given the names of offending vendors on a need-to-know basis but he did not have a definitive answer.


In response to a follow-up question from Representative Mills, Mr. Lovely said the agency could provide the number of violations and the geographic locations in which they occurred.


The meeting was adjourned at 11:25 am.