Vendor Cost Containment System Certification


If the State agency has authorized or plans to authorize any above-50% vendors, FNS must certify the vendor cost containment system. A State agency that has not yet received FNS certification must submit a request for certification that contains the following information.

DOES NOT APPLY (PROCEED TO SECTION G) - Checked

  1. Calculation of new competitive price levels
    • Describe how the State agency derived or will derive new competitive price levels for regular vendors, which exclude the prices of above-50-percent vendors.
  2. Allowable reimbursement levels for regular vendors and above-50-percent vendors
    1. Explain how the State agency will ensure that average payments to above-50-percent vendors do not exceed average payments to comparable regular vendors.
    2. The State agency plans to exempt above-50-percent vendors from the competitive price criteria and allowable reimbursement levels.
      • Yes No
      • If yes, how many vendors will be exempted? ______________
      • Are these vendors needed to ensure participant access to supplemental foods?
      • Yes No
    3. The State agency applies peer-group-specific maximum allowable reimbursement levels to food instruments during the food instrument redemption process.
      • Yes No
      • If yes, describe the procedure or process used:
  3. Describe the State agency's methodology for grouping above-50-percent vendors in its peer group system (i.e., separately or in peer groups with regular vendors) and the criteria the State agency uses to identify comparable vendors for each group of above-50-percent vendors.
  4. The State agency plans to exempt non-profit above-50-percent vendors from competitive price criteria and allowable reimbursement levels.
    • Yes No
    • If yes, provide the following information in detail:
    1. The reason the State agency has decided to exempt such vendors (i.e., the benefits to the program) and the number of non-profit vendors to be exempted;
    2. The reason the non-profit above-50-percent vendors are needed to ensure participant access to supplemental foods;
    3. How the prices of the non-profit vendors compare to those of other vendors in their geographic area that are subject to competitive price criteria and allowable reimbursement levels; and
    4. How the State agency will establish the level of reimbursement for the non-profit above-50-percent vendors that it has exempted.
  5. The State agency has fully implemented the competitive price criteria and allowable reimbursement methodologies described in items 1 and 2 above.
    • Yes No
    • If the State agency has not fully implemented the revised competitive price and allowable reimbursement methodologies, describe the current status of this effort and include the timetable for achieving full implementation.
  6. The State agency plans to exempt pharmacy vendors from competitive price criteria and allowable reimbursement levels.
    • Yes No
    • If yes, the State agency has confirmed that these pharmacies provide only exempt infant formula and/or WIC-eligible medical foods to program participants.
    • Yes No
  7. Complete the three tables on the following pages to demonstrate that the State agency's methodologies for establishing and implementing competitive price criteria and allowable reimbursement levels will ensure that average payments per food instrument or food item to above-50% vendors will not exceed average payments to regular vendors.
  8. Attach a copy of the report(s) that the State agency will use to monitor average payments per food instrument to above-50% vendors and regular vendors. If the State agency does not have such a report, describe the State agency's plans to develop and implement a report(s) for monitoring purposes, including the report contents or fields.
Table 1. Data for WIC Vendor Cost Containment Certification - Overview

Please provide the following information on the regular vendors and the above-50-percent vendors authorized by the State agency as of June 30th. If data are not available through June 30th, the State agency should enter data for the period for which data are available, replacing "June" with the month to which the data are applicable.

Question Amount
1. How many authorized regular vendors did the State agency have as of June 30th?
2. For all of these regular vendors combined, what was the total amount of WIC redemptions paid in June 30?
3. How many above-50-percent vendors did the State agency have as of June 30th?
a. Non-pharmacy above-50-percent vendors
Number of WIC-onlystores
Number of other types of above-50-percent vendors (excluding pharmacies)
b. Above-50-percent pharmacy vendors
c. Total above-50-percent vendors (sum of a and b)
4. What was the total amount of redemptions paid to these above-50-percent vendors in June?
a. Non-pharmacy above-50-percent vendors
b. Above-50-percent pharmacy vendors
c. Total above-50-percent vendors
5. How many peer groups of above-50-percent vendors (either separate peer groups or groups with regular vendors) has the State agency identified?
6. How many above-50-percent vendors and regular vendors has the State agency authorized that do not meet competitive price criteria, but are needed to ensure participant access to supplemental foods? 6. above 50% _____ regular vendors___

(Note: If the State agency has completed the peer group table in the Vendor Management section of this Guidance, skip the following table.)

Table 2: Data for WIC Vendor Cost Containment Certification - Peer Group Structure

Please describe all vendor peer groups and identify the regular vendors that are comparable to each group of above-50-percent vendors. The information provided should refer to the peer group system as structured to comply with the new vendor cost containment requirements.

Description Number of Vendors in Peer Group Comparable Vendors
No. (1) (e.g., supermarkets, chain stores, pharmacies) (2) Regular Vendors (3) Above-50% Vendors (4) Total (5) Peer Group Number (6)
1
2
3
4

Instructions:

Column 1 - Assign a sequential number to each peer group.

Column 2 - Describe the vendors in the peer group.

Column 3 - Insert the number of authorized vendors that are regular vendors.

Column 4 - Insert the number of above-50-percent vendors currently authorized.

Column 5 - Insert the total number of authorized vendors. This number should be the sum of columns 3 and 4, since the State agency must identify each vendor as being either a regular vendor or an above-50-percent vendor.

Column 6 - For each peer group that contains above-50-percent vendors, insert the number of the peer group that contains comparable regular vendors. The comparable vendor peer group is the peer group that the State agency uses to derive the competitive price criteria and maximum reimbursement levels that it applies to the above-50-percent vendors. If above-50-percent vendors are placed in a peer group with regular vendors, then the number in column 1 should be the same as that in column 6. If above-50-percent vendors are in separate peer groups, then the number in column 1 will be different from that in column 6.

Table 3: Data for WIC Vendor Cost Containment Certification - Average Payments to Vendors

Using the format below, provide the latest available redemption data for the ten (10) most frequently redeemed food instrument types. Then indicate how these amounts have changed or will change with the implementation of the revised competitive price criteria and allowable reimbursement amounts. Prepare a separate table for each group of above-50-percent vendors identified in Table 2.

Chart for: Above-50-Percent Vendors in Peer Group No.

Food Instrument Type/Number and Description (1) Number of Food Instruments Redeemed (2) Average Redemption Price and Standard Deviation Per Food Instrument for (Insert Month & Year) Difference in Average Redemption Prices Between Above-50% Vendors and Comparable Regular Vendors (5) Average Redemption Price Per Food Instrument for (Insert Month &Year)
Above-50% Vendors (3) Comparable Regular Vendors (4) Above-50% Vendors (6) Comparable Regular Vendors (7)
Price Std. Dev. Price Std. Dev.
ROW 1

Instructions:

Begin by identifying the above-50-percent vendors to which the data in the chart refer. Insert the peer group number for the above-50-percent vendors and write it on the line at the top of the chart. All data in the chart should pertain only to the above-50-percent vendors in the peer group and the comparable regular vendors. Complete a separate table for each group of above-50-percent vendors and comparable regular vendors identified in the table 2.

Column 1 - Insert the food instrument (FI) type or number and list the foods included on the FI. Include no more than two infant formula food instrument types, but complete the chart using the next most frequently redeemed food instrument types.

Column 2 - For each type of FI identified in column 1, insert the number of food instruments redeemed (paid) in June (the calendar month). If the State agency implemented competitive price criteria and allowable reimbursement levels that comply with the new vendor cost containment requirements before June, then select the calendar month before the State agency applied the new competitive price criteria and allowable reimbursement levels.

Columns 3 & 4 - Insert the average food instrument redemption amount and the standard deviation for the above-50-percent vendors and for the regular vendors that the State agency has identified in Table 2 as comparable vendors. As an alternative to providing average payments to comparable regular vendors, the State agency may enter average payments to all regular vendors. If the State agency provides data for all regular vendors rather than average payment to comparable vendors, indicate this on the table or in the accompanying narrative.

Column 5 - Subtract the amount in column 4 from the amount in column 3 and enter the difference here. If the amount in column 3 is less than that in column 4, enter the difference as a negative dollar amount.

Column 6 - Insert the average food instrument redemption amount for above-50-percent vendors after the State agency has applied the revised competitive price criteria and allowable reimbursement levels. If the State agency has implemented new competitive price criteria and allowable reimbursement levels before submitting its request for certification to FNS, then the data in column 6 should be actual redemption data for the above-50-percent vendors and comparable regular vendors. Insert the calendar month(s) to which the data pertain. If the State agency does not have actual redemption data, then the State agency must estimate the new average redemption amounts.

Column 7 - Insert the average redemption amounts for the corresponding group of comparable vendors. If the State agency has not yet implemented its revised methodologies, insert the target date to which the estimated average redemption amounts would apply. In the narrative that accompanies this data, discuss in detail the rationale for the State agency's estimated average redemption amounts in columns 6 and 7. The average redemption amount for above-50-percent vendors may not exceed the average redemption amount for comparable vendors.