|DATE:||May 5, 1997|
|MEMO CODE:||Final WIC Policy Memorandum: #97-7|
Supplemental Food Programs
This policy memorandum addresses the basic tools of WIC caseload management. This document consolidates key provisions of previously issued Food and Consumer Service (FCS) policy on all components of caseload management -- from food cost savings strategies and food package design, to certification strategies -- into a comprehensive scheme. This policy memorandum is intended to summarize. reinforce and clarify these strategies and their critical interrelationships.
WIC managers at all levels know that one of the most challenging aspects of WIC program management is finding the right blend of strategies to successfully manage caseloads and funds obligations. Prudent caseload management and integrity in operations is an ongoing responsibility of WIC managers. The basic goal of caseload management in WIC is to deliver, within available resources, appropriately prescribed packages of benefits to a maximum number of persons most in need.
Financial data accounting and management systems which accurately and reliably forecast project and track funding, expenditures, and obligations are essential to effective caseload management. Accurate and timely data are critical to the early detection of potential over- or under-spending, the magnitude of the problem, and the effectiveness of measures taken to remedy the problem. A sound data system also can trigger an early response to allow gradual and systematic reduction in caseload. which always is preferable to precipitous drops in caseload. Finally, accurate reporting of expenditures to FCS enables timely recovery and reallocation of funds to support responsive management of WIC caseload and funds nationwide.
In addition to a financial management system which permits timely and accurate tracking of revenue and expenditures, there are numerous other tools and strategies that state agencies may use to manage funds and caseload on both a routine, ongoing basis. and when funding resources become limited.
Efficient, proactive and effective funds and caseload management can be achieved through the following ongoing management actions:
- Maximizing cost savings through rebate management and other cost containment activities such as prudent management of food delivery systems.
- Making appropriate and allowable food package administrative adjustments.
- Targeting benefits to those most in need on the basis of eligibility criteria that clearly and credibly identify and prioritize income eligible persons at nutritional risk.
Numerous tools and strategies are also available to further reduce costs, decrease caseload. or simply change the mix of clients served to those at highest risk. Such tools are for use when the ongoing management strategies listed above are insufficient to deal with increased demand or decreased resources, either anticipated or unanticipated. They are presented in a general preferred order of application:
- Making additional allowable administrative adjustments to food packages.
- Establishing shorter certification periods on a participant case-by-case basis, or discontinuing new certifications of lower-priority participants, or in extreme cases, discontinuing new certifications of all applicants,-while implementing applicant waiting lists.
- Discontinuing or temporarily suspending benefits during a certification period.
This is a last-resort measure, to be avoided if possible and used only in extreme circumstances when other more acceptable strategies are not adequately responsive to funding shortages.
The following is a discussion of these major tools and strategies, with particular emphasis on their use for general management as well as for effecting cost reduction and gradual caseload reductions and in avoiding precipitous caseload drops. State agency managers may create a mix of appropriate strategies from among those allowable to manage caseload within the parameters of these guidelines and other relevant regulations and policy. State agencies are encouraged to apply the strategies for caseload reduction as equitably as possible on a statewide basis to all local agencies so that participants within a state have approximately equal program access relative to their priority level, consistent with WIC policy memorandum #93·8 of July 26, 1993. This policy memorandum highlights key items; it does not include every detail of all pertinent policy. Thus, regulations. instructions and the policy memorandum cited in this memorandum should be consulted as state agencies develop caseload management strategies. For convenience, a grid of the referenced policy and instruction documents are attached.
ONGOING STRATEGIES TO MANAGE, CONTAIN AND CONTROL COSTS:
1. Cost Containment
Examining and aggressively pursuing rebates and other food cost savings should routinely be a first step to stretch food dollars to serve a maximum number of eligible participants. Section 246.160) of the WIC regulations requires each state agency to examine and, as appropriate, initiate cost containment measures. Rebate savings currently annually support about 1.5 million participants. State agencies should strive to secure the most lucrative rebates and should ensure that rebates are accurately billed and collected in a timely manner. If feasible, rebates on products such as special formula and other foods in addition to infant formula should be considered. Implementing effective food delivery management measures can also contribute significantly to food cost containment. They include selecting the most economical vendors through strategies such ns competitively selecting vendors on the basis of food costs. Alternative delivery systems, such as direct distribution of special infant formula, also can reduce costs. Other ideas include but are not limited to: selecting vendors with a strong compliance history; developing training programs that ensure vendors understand program intent, rules and operations; monitoring vendors on a regular basis; and sanctioning vendors as appropriate.
2. Food Package Design
Food package design is one of the most powerful tools available to achieve cost economies. The regulations at Section 246.10 and FCS Instruction 804-1 provide guidance on the principles of food package design which permit food cost efficiencies while at the same time maintaining nutritional integrity. When assessing food package design, state agencies need to consider the costs of implementing and enforcing changes in food packages. including the training of both vendors and participants. The following list summarizes the basic principles pertaining to food package design in FCS instructions. regulations and policy:
- Regulatory quantities may be reduced. but only for sound nutrition reasons based on the participant's age, nutritional risk condition, dietary needs, and personal food preferences. The term ''nutrition tailoring" is reserved solely for quantity reductions for nutrition reasons. Reduction of the Federal regulatory quantities of W[C foods for other than nutrition reasons, even to accommodate anticipated or imminent food over-obligations, is not an acceptable caseload management strategy.
- Nutrition tailoring may be directed to individuals or to categories of individuals with similar nutritional needs.
- Nutrition tailoring represents a serious commitment to long-term implementation, until a change occurs in the science and nutrition rationale upon which the food package modification is based. As such, nutrition tailoring is intended to respond to changes in scientific knowledge and the nutrient needs and food preferences of participants, not changes in funding availability. Therefore, nutrition tailoring must not be done for cost reasons, although lower costs may be an incidental result.
- Types and forms-but not quantities-of allowable WIC foods can be designated by state agencies for cost reasons and are called "administrative adjustments." These adjustments can significantly reduce food package costs. There are innumerable effective and allowable administrative adjustments such as selecting the least expensive brands and the most economical container sizes or packaging. The attachment to this memorandum, as well as FCS Instruction 804-1. provide relevant examples. (Please note, however, that Exhibit A of the Instruction contains obsolete information about infant formula reconstitution in item I.A.)
- State agencies should consider administrative adjustments as routine cost containment procedures when designing food packages, while keeping in mind the critical importance of participant acceptance and appeal.
- Exercising the full potential of all allowable administrative adjustments is an effective response to meet caseload demands that may exceed anticipated resources. State agencies can develop strategies in which more aggressive administrative adjustments may be imposed as needed to contain costs and maximize or maintain participation.
- In making any nutrition tailoring or administrative adjustments, state agencies must adhere to the following two principles:
- at least one food from each WIC food category must be offered in every food package unless medically contraindicated or refused by the individual participant. consistent with Section 246.1 0(b)(2)(i); and
- the maximum quantities stated in Section 246.10 must be made available to individual participants needing that level of nutritional support. based on their health status. nutritional needs and risk conditions .as per FCS Instruction 804-1. State agency nutrition tailoring policy must not totally preclude regulatory maximum quantities of foods for certain individuals who need them.
- State agencies are encouraged to prorate benefits for those participants whose eligibility is effective late in the monthly issuance cycle or who are late in picking up food instruments. While nutrition tailoring, as noted above. is based on individual nutrition needs and preferences, proration is appropriately apportioning the amount of food a participant is entitled to receive based on the remaining days/weeks in the month or issuance cycle. Container sizes may influence the amount of foods provided in prorated packages. Thus, for practical reasons, state agencies should plan to provide participants with more rather than less of the prorated amount of foods, especially infant formula.
- Food package changes must be reflected in the state Plan/Procedure Manual and must be approved by FCS prior to implementation.
3. Benefit Targeting
Targeting benefits is an underlying principle of the WIC Program which has contributed to its longstanding success. Section 246.7(e)(4) of the WIC regulations and FCS Instruction 803-12 provide guidance on benefit targeting. Nutritional risk criteria and income guidelines which facilitate objective distinctions among applicants on the basis of relative but legitimate financial and nutritional risk and need also are crucial tools for routine management of program participation and costs. Nutritional risk criteria used by state agencies should appropriately identify those applicants with nutritional or medically-related nutritional conditions that can be addressed, assisted or controlled through participation in WIC. Benefit targeting assures that applicants are categorized into appropriate priorities, so that benefits can be provided to those most needy. and discontinued for those least in need at times when demand exceeds resources. Through effective targeting, WIC can continue to assure that persons at-highest relative need have first access to available benefits. The nutritional risk criteria used by a state agency should be considered a general caseload management tool to be used as a routine, ongoing measure to assure benefits are directed only to at-risk persons throughout the year and that persons are classified appropriately into relative priorities of need in anticipation of possible caseload reduction. Appropriately established legitimate nutritional risk criteria thus should not be changed solely for the purposes of reducing the pool of eligibles as a caseload management tool. This also is applicable to income guidelines. However. creating subpriorities within priorities of participants on the basis of relative income or nutritional risk are effective ways to target benefits based on relative need.
STRATE GIES FOR FURTHER COST REDUCTION:
4. Limiting Certification/Waiting List Management
State agencies should make sure they have fully maximized cost economies through food package administrative adjustments, rebates and other cost containment efforts. and the routine management measures discussed above. State agencies still needing to reduce costs or caseloads after taking those more modest measures have some options: They may certify certain short-term lower-priority applicants for predetermined shorter certification periods (see section S below). They may cease certifying applicants in the lower priorities and certify only high-priority applicants. In extreme situations, state agencies may stop certifying all applicant priority categories. Applicants who cannot be served must be placed on waiting lists as per Section 246. 7(f)(l) to allow natural attrition of existing caseload to occur. See FCS Instruction 803-6, Certification: Waiting Lists for Additional Information. Judicious waiting list management allows an orderly, systematic and gradual caseload decrease and/or a "rebalancing" of caseload composition towards higher priority applicants. It encompasses the following principles:
- When demand exceeds available caseload slots in some but not all clinic locations within a state agency's jurisdiction, it should consider reallocating caseload slots from local agencies not using their assigned caseloads to those with greater demand or growth capacity in an effort to balance benefit availability to approximately the same priorities of participants statewide.
- State agencies may continue to certify and provide service to new applicants at higher priorities. while placing lower priority applicants on waiting lists.
- State agencies are encouraged to establish procedures which will ensure that applicants are scheduled for WIC appointments in a manner that generally conforms to the priority system. so that higher priority applicants are seen and served as soon as possible. This means that state agencies may use an essentially categorical priority system for scheduling appointments that proceeds from pregnant or breastfeeding women to infants to children to non-breastfeeding women.
- Waiting lists must be imposed starting with the lowest priorities and working upward without skipping priorities or subpriorities within priorities.
- In accordance with FCS Instruction 819~2, within 20 days of requesting benefits, individuals must be notified of their placement on a waiting list and their right to a fair hearing. The request may be made in person to the local agency. or at state agency option, by telephone,
- The waiting list shall include the applicant's name, address or phone number, status (e.g., pregnant, breastfeeding, age of applicant), and the date he or she was placed on the waiting list.
- State agencies may also wish to take actions to pre-screen waiting list applicants for eligibility to the extent practical. For example. state agencies could conduct a quick income review on applicants to assure their potential eligibility, automatically eliminating over-income applicants." Also, state agencies may wish to categorize income-eligible applicants by priority if nutritional risk information is available so that when caseload slots do become available, they can move persons off waiting lists in an orderly, logical. and expeditious fashion based on relative need.
- State agencies may subprioritize within priorities. See FCS Instruction 803-2 for examples.
- State agencies need not place lower priority applicants on waiting lists if there is no reasonable expectation of service to them (unless they request such placement.
- State agencies can minimize the potential deterrent effect of waiting lists on future applications by clearly informing applicants and those making referrals to WIC as to the likelihood of receiving service at a later time given the funding situation.
- As resources become available through attrition, the waiting list is a ready source of persons to be served. Staff must offer service to highest priority persons first, then work systematically down the list in priority order.
5. Establishing Shorter Certification Periods
One option. with limited utility, allowed on a participant case-by-case basis as per FCS Instruction 803-4, is to certify certain persons for periods that are shorter than a normal certification. FCS Instruction 803-4 limits this option on a case-by-case basis only to persons with "temporarily low income" (persons such as strikers. for instance). While FCS Instruction 803-4 does not address the appropriateness of shorter certification periods to deal with funding shortages, it is logical to extend this option to such purposes. If state agencies wish to use this strategy, they must seek prior approval from FCS. State agencies also should establish procedures for use by local competent professional authorities. to ensure consistency and fairness of application statewide. Upon certification, state agencies must assure that affected participants clearly understand the length of their certification period, and the need to reapply for benefits at the completion of the certification period. Assigning a shorter certification period is not considered an adverse action and thus, it is not appealable. Therefore, this strategy eliminates costs associated with appeals and required benefit delivery during any resultant appeals. The primary effect of this strategy is to allow state agencies to change their caseload mix to higher priorities. using the faster attrition rates of shorter certification periods. It may have little effect on food costs savings, however, state agencies contemplating such a measure should consider that shorter certification periods are likely to increase administrative costs associated with additional certifications in the long run.
6. Mid-Certification Benefit Discontinuation
Notwithstanding all existing tools and strategies available to state agencies to 1nanage resources discussed above, if further caseload reductions are still needed. State agencies may discontinue benefits to certain participants during a certification period. Unlike shorter certification periods discussed above in number 5, where a participant is informed at certification exactly when his/her benefits will specifically end, mid-certification benefit discontinuation constitutes an unanticipated break in the delivery of services prior to the time a participant expected services to end. Because mid-certification discontinuation or disruption of benefits is a broken commitment, and thus an "adverse action", it must be considered only as a last resort. State agencies never should plan to use mid-certification discontinuation or disruption of benefits as a strategy to routinely manage caseload. Regulations at Sections 246.7(h)(2). (h)(J). (j)(6), and (j)(9), as well as FCS Instruction 803-9, govern mid-certification discontinuation of benefits. Discontinuation of benefits before the end of a certification period may be imposed in one of two forms: Suspension of benefits for a group of participants with the expectation of resuming benefit provision when funds/caseload slots become available; and disqualification of a group of persons when it is unlikely that funds/slots will become available. Key points. which apply to all situations of mid-certification benefits discontinuation (both suspension and disqualification) follow:
- Due to the sensitive nature of such adverse actions, state agencies must notify FCS in advance of planned service disruptions.
- If the funding problem is temporary, state agencies may wish to suspend benefits, rather than disqualify participants. Suspension can be used for temporary benefit disruption, whereas disqualification is a permanent measure which requires reapplication and certification. Suspension may be preferred by state agencies as a more moderate and temporary means to reduce food expenditures without causing undue negative alarm among participants. It also avoids the administrative costs of additional new certifications associated with disqualifications.
- Mid-certification discontinuation of benefits should be applied in an equitable manner, to the minimal number of lowest priority persons necessary to bring caseload under control.
- In imposing discontinuation of benefits, state agencies are not relieved of their obligation to follow proper "due process" procedures required by regulations.
- State agencies must provide affected participants with a written notification of such adverse action l 5 days in advance of such disruption, the reasons for the action, and the offer of a right to appeal, as per regulations at 246. 70)( 6) and (9). Should the participant accept the offer of an appeal within mandated timeframes, benefits must be continued at the current level until a hearing decision is rendered or the certification period ends, whichever occurs first (246.9(g)). Given these constraints, mid-certification benefit discontinuation, even as au emergency measure, is not a particularly effective tool for realizing immediate cost savings.
- No applicants -- in any category or priority -- may be certified during a period in which a state agency is employing mid-certification adverse actions, as per 246.7(h)(3) of regulations and FCS Instruction 803-9.
- State agencies may wish to minimize the potential deterrent effect of benefit disruption on future applications by clarifying to affected persons that benefits may be available at a future date, as appropriate.
Using the techniques, tools and strategies discussed above, state agencies should plan well in advance so as to maintain a relatively stable participation level, minimize service disruption, and avoid precipitous end of year caseload reductions. In the event a state agency finds it must take action to reduce costs, the state agency must notify the FCS regional office of its intended actions. The regional office will continue to work with the state agency to refine its forecast of funding, validate its caseload projection, and customize available tools and strategies to the anticipated needs of the state agency to minimize the deterrent or negative impact on participants.
STANLEY C. GARNETT
Supplemental Food Programs Division