[Federal Register: December 2, 2002 (Volume 67, Number 231)]
[Proposed Rules]
[Page 71773-71791]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02de02-48]
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Part V
Department of Agriculture
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Food and Nutrition Service
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7 CFR Part 246
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC): Miscellaneous Provisions; Proposed Rule
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 246
RIN 0584-AB10
Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC): Miscellaneous Provisions
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule amends a number of existing provisions in
the WIC Program regulations. In response to issues raised by WIC State
agencies and other members of the WIC community, the United States
Department of Agriculture (the Department) proposes two principal
changes. First, this rulemaking would streamline the Federal
requirements for financial and participation reporting by State
agencies. Second, it would clarify the rules on confidentiality of WIC
information in order to strengthen coordination with organizations and
private physicians, and to provide guidance to State agencies on
responding to subpoenas and other court-ordered requests for
confidential information.
These two provisions are intended to strengthen services to WIC
participants, improve Program administration, and increase State agency
flexibility in managing the Program. The other provisions in this rule
have been designed to improve program administration or to incorporate
program policies that have been in effect for some time into
regulations.
DATES: To be assured of consideration, comments must be postmarked on
or before April 1, 2003.
ADDRESSES: Comments should be sent to Patricia N. Daniels, Director,
Supplemental Food Programs Division, Food and Nutrition Service, USDA,
3101 Park Center Drive, Room 520, Alexandria, VA 22302. All written
comments will be available for public inspection during regular
business hours (8:30 a.m. to 5 p.m., Monday through Friday), at the
above address.
FOR FURTHER INFORMATION CONTACT: Debra R. Whitford, Chief of the Policy
and Program Development Branch, Supplemental Food Programs Division, at
the address indicated in the ADDRESSES section or at (703) 305-2730,
during regular business hours (8:30 a.m. to 5 p.m.) Monday through
Friday.
SUPPLEMENTARY INFORMATION:
Background
1. Definitions of ``Sign or Signature'' and ``Electronic Signature''
(Sec. 246.2)
This rule proposes to amend Sec. 246.2 to add new definitions of
``sign or signature'' and ``electronic signature.'' These definitions
would give State agencies the option to use electronic signatures in
their administration of the WIC Program. WIC regulations require
signatures in various contexts. For example, Sec. 246.7(i)(9) requires
the ``signature'' of the competent professional authority (CPA) who
determined that the applicant is at nutritional risk and the
``signature'' of the administrative person who determined that the
applicant meets WIC income eligibility requirements. In addition, Sec.
246.7(i)(10) requires the ``signature'' of the applicant, parent, or
caretaker as part of the WIC application/certification process, and
Sec. 246.12(r)(2) requires participants and their representatives to
``sign'' when they receive WIC supplemental foods or food instruments.
Currently, the terms ``sign'' or ``signature'' throughout part 246
could be interpreted to exclude the use of electronic signatures. With
advancements in technology, we do not want to limit State agencies'
authority to use such tools. Many State agencies are using or
implementing automated management information systems whereby all
information collected from applicants is typed into an electronic
record/data system at the time of application. As part of the move to
automated records and paperless systems, some State agencies are
interested in using electronic signatures.
While new technologies continue to emerge, currently, electronic
signatures include a broad range of signature types. For example, an
applicant could sign his/her name on a device similar to a note pad,
called a digital pen and pad. The signature becomes digitized and is
stored in the data system as an exact replica of the applicant's
signature. Other types of electronic signature devices allow for the
collection of an applicant's signature with the digital pen and pad and
the signature is subsequently converted and stored as a unique series
of digits or numbers. For administrative purposes, an electronic
signature could be a unique key and/or personal identification number
assigned by staff that is authorized to determine a WIC applicant's
nutrition risk or income eligibility. Depending on its application, a
combination of electronic signature tools may be necessary to address
appropriately the reliability and integrity of the technology and/or
security of the State agency's system.
This rule would define ``electronic signature'' in the same way as
it is defined in the Electronic Signatures in Global and National
Commerce Act (Pub. L. 106-229, signed June 30, 2000), also known as
ESIGN. ESIGN covers the use of electronic signatures in most business,
consumer, and commercial transactions, but does not generally cover
``governmental'' transactions. However, we believe the broad
application of ESIGN will make the definition of ``electronic
signature'' the standard. Therefore, we propose to adopt the ESIGN
definition of ``electronic signature'' for WIC purposes.
This rule would make clear that electronic signatures may be used
only if the State agency ensures the reliability and integrity of the
technology used and the security and confidentiality of electronic
signatures collected in accordance with sound management practices and
WIC Program regulations concerning confidentiality. State agencies
interested in using electronic signatures will need to assess the
suitability of electronic signatures for various applications, security
issues, and cost implications. Interested State agencies should explore
available technology, including off-the-shelf software that may meet
WIC's needs at a reasonable price. This rule would not require the use
of electronic signatures.
2. Selection of Local Agencies (Sec. 246.5)
The Department proposes to remove the requirement in Sec. Sec.
246.5(c)(1) and (d)(2) of the regulations for WIC State agencies to
fund new local agencies in areas based on the sequential order of
neediest areas listed in the Affirmative Action Plans that are part of
each State agency's Plan of Operation. This change is intended to give
State agencies more flexibility in using their WIC Program grants as
efficiently and practically as possible to best meet the needs of
program participation. In order to do this, it may not always be
practical to adhere strictly to the sequential order of neediest areas
when funding local WIC agencies for expansion.
At Sec. Sec. 246.5(c)(1) and (d)(2), emphasis is placed on
expanding the Program through the selection of local agencies that are
next in line on the basis of need as established by the State agency's
Affirmative Action Plan. Although State agencies should continue to
consider the relative need of certain areas for program expansion as
identified in the Affirmative Action Plan when selecting new local
agencies, we are aware that there are certain practical considerations
in expanding program operations that may override the choice
[[Page 71775]]
of a local agency in an area that is next in line according to the
Plan. For example, while it remains important to expand operations in
the ``neediest one-third of all areas unserved or partially served'',
as required in Sec. 246.4(a)(5)(i), it may be impossible to do so at a
particular point in time because of lack of funding. An inadequate
health care system infrastructure (public or private) to provide
health-related services to support the opening of a local agency is a
common situation that State agencies often face in attempting to expand
in remote areas. The cost of opening new WIC clinics in such areas,
even if those areas happen to be ``next in line'' for expanded services
may exceed the funds that the State agency has available for caseload
growth. By comparison, it may be more cost-effective and expeditious to
expand caseload in other areas that are also underserved, but possess
the health care infrastructure to support additional WIC services.
3. Mid-Certification Actions (Sec. 246.7(h))
The Department proposes several revisions to this section. The most
significant proposed change would require local agencies to reassess a
participant's income eligibility (including household composition)
during the certification period if information is received about a
change in circumstances, indicating possible ineligibility. Although
many State agencies require reassessment of income eligibility based on
receipt of information indicating a change, current regulations do not
mandate such reassessments. This proposal would strengthen Federal
requirements for local agencies to act on information about changes in
household circumstances that affect only the income eligibility of
participants, not the nutrition risk eligibility.
Income Eligibility Reassessments
Currently, WIC program regulations (Sec. 246.7(h)(1)) require
local agencies to disqualify an individual in the middle of a
certification period if, on the basis of a reassessment of Program
eligibility status, the individual is found to be ineligible. Because
of the ambiguity in the reference to reassessment of ``Program
eligibility'' during certification periods, the Department wishes to
exercise its interpretive discretion to specify that mid-certification
reassessments pertain to income eligibility, not to the participant's
nutrition risk status.
This proposed interpretation is consistent with the Department's
policy about mid-certification reassessments. Many State agencies
already specify in their formal policies that disqualifications due to
reassessments are appropriate only in response to information that
establishes ineligibility based on income. It has not been the
Department's position that local agencies should reassess nutrition
risk status during the certification period or disqualify a participant
based on a learned improvement in nutrition risk status. Provided that
the individual remains income-eligible for WIC benefits, the Department
believes that enrollment in the Program generally entails a commitment
to the participant for a full certification period. This policy
regarding nutrition risk status recognizes the preventive nature of the
WIC Program.
However, the Department also believes that local agencies should
follow up on information that a change in income or household size may
make a participant ineligible to continue to receive WIC benefits.
Current regulations only require State agencies to ensure that local
agencies disqualify participants who are found to be ineligible only if
a reassessment of program eligibility is conducted. The regulations do
not currently mandate that any reassessment be performed. This proposed
change would require that local agencies reassess income eligibility
when information is received indicating that a change in income
eligibility has occurred. Local agencies would not be required to seek
out information. However, if information comes to their attention,
either from the participant or from other sources, which suggests
ineligibility, this would trigger the regulatory requirement to
reassess WIC income eligibility.
For an adjunctively income-eligible participant, the trigger action
for income reassessment within a certification period would be
confirmation that the individual or other eligible family member is no
longer participating in any of the programs forming the basis for
adjunctive income eligibility. This proposed provision would require
local agencies to ask the adjunctively income-eligible participant for
proof of current eligibility to participate in another qualifying
program only when that local agency has reason to believe that the
original program participation has ended. If, on the basis of the
reassessment, the participant is no longer eligible to receive WIC
benefits because of income, then disqualification proceedings would be
initiated.
Disqualification based on a reassessment of income ineligibility
also applies to other household members currently receiving WIC
benefits. When one household member is reassessed for income
eligibility and determined ineligible based on household size and
income, in effect all participating members of that household have been
reassessed and are equally ineligible. Therefore, the regulations have
been revised to require that if one member of a household is reassessed
for income eligibility and determined ineligible, all other
participating household members in the economic unit must be
disqualified. This provision applies to normal income screenings as
well as to proof that a participant is no longer receiving benefits
under another program that confers adjunctive income eligibility.
The Department is not interested in limiting State agency
flexibility in this area, but is establishing clear Federal
requirements that are both reasonable and responsible. The Department
understands that many State agencies already have similar or even more
stringent policies in place regarding reassessing income eligibility
during the certification period. State agency policy need not be
changed as long as State requirements meet the minimum Federal
requirements.
The Department is aware that some State agencies oppose both
reassessment of income eligibility and program disqualification based
on such reassessment during a certification period. Some of the
arguments offered to FNS include the disparity of treatment among
participants according to their willingness to report income changes,
and the consideration that financial situations of many participants
are tenuous and subject to fluctuations. Another concern is the fact
that other family members who are also WIC participants will be
disqualified if a reassessment reveals the family to be over the income
standard.
The philosophical issue underlying the arguments for or against
mid-certification reassessments and disqualifications for income
ineligibility is whether WIC's commitment to improving an individual's
nutritional status during a period of time (e.g., during a 6-month
certification period) is more or less important than ensuring the
integrity of income eligibility standards. The Department can find no
statutory justification for allowing known income ineligible persons to
continue to receive WIC benefits. The Department agrees with the
rationale that because nutritional status may take at least a full
certification period to improve, a commitment to the participant is
implied. However, that commitment may not be extended to persons who no
longer meet the basic income eligibility requirements set forth
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in the Child Nutrition Act. A participant whose household income
clearly exceeds the income standards used by the State agency is no
longer eligible for WIC benefits. Federal policy should be unequivocal
regarding the ineligibility of known over-income participants.
Again, the Department is not requiring local agencies to seek out
information about the income status of participants during the
certification period. Rather, if information regarding a change in
income and/or family size is brought to the attention of the local
agency, action must be taken to reassess the participant's income
eligibility for program benefits. The proposed language represents a
reasonable approach that balances responsible action against
unnecessary paperwork burden.
The Department also proposes to indicate clearly the mandatory or
optional nature of other mid-certification actions addressed in this
section. As proposed, mandatory mid-certification actions would include
reassessment of income eligibility based on information received and
disqualification of participants, including family members, if found to
be over-income. Optional mid-certification disqualification actions
would include those necessitated by funding shortages or the failure to
pick up food instruments or supplemental foods for a number of
consecutive months as established by the State.
4. Requesting Pregnancy Tests, Checking Identification and Other Basic
Certification Procedures (Sec. 246.7(c))
We propose to expand Sec. 246.7(c) to address several basic
certification procedures, along with the delineation of eligibility
criteria, in an effort to highlight the importance of certain
procedures, such as providing proof of residency and proof of identity,
and ensuring that applicants are not charged for certification. To
accomplish this, the following changes are being made:
(a) The provisions currently found at Sec. Sec. 246.7 (l)(2) and
(m), addressing proof of residency/proof of identity, and program
certification without charge to the applicant, respectively, are being
moved to more prominent positions in the regulations;
(b) A new provision concerning pregnancy tests is proposed; and
(c) A reference is made to the application processing standards
contained in paragraph (f) of this section.
Pregnancy Tests
In response to questions that have arisen in recent years, we are
proposing basic guidelines that State and local agencies must observe
if documentation of pregnancy is part of the certification process.
Some State and local agencies have expressed an interest in requiring
proof of pregnancy to stem possible abuse from ineligible applicants
claiming categorical eligibility as pregnant women. We realize that
pregnancy in its very early stages may not be immediately apparent. We
also understand why a local agency may wish to obtain confirmation of
the pregnancy before it issues WIC benefits, especially if incidents of
possible fraud have been reported. For these reasons, we are proposing
in a new paragraph (c)(2)(ii) that State agencies may issue benefits to
applicants who claim to be pregnant (assuming that all other
eligibility criteria are met) but who do not have documented proof of
pregnancy at the time of the certification interview and determination.
The State agency should then allow a reasonable period of time, not to
exceed 60 days, for the applicant to provide the requested
documentation. If such documentation is not provided as requested, the
local agency would then be justified in terminating the woman's WIC
participation in the middle of a certification period.
5. Determining Income Eligibility (Sec. 246.7(d))
The Department proposes several changes to this section of the
regulations.
A. Use of State or Local Income Health Care Guidelines to Determine
Income Eligibility for WIC
The first proposed revision, at paragraph (d)(2)(iii) would require
State agencies using State or local income guidelines for free or
reduced-price health care to base the income eligibility determinations
of WIC applicants on the income and family definition and exclusions
outlined in paragraphs (d)(2)(iii) and (d)(2)(iv), respectively. This
change would continue to allow variation among the State agencies only
with regard to the actual income guidelines used (i.e., the percent of
gross income above the Federal poverty income guidelines, up to a
maximum of 185 percent), but not with the definition of income, family,
or exclusions from income. This proposed revision would continue the
WIC Program's current policy of excluding from these requirements
persons who are determined adjunctively or automatically income
eligible.
We are proposing this change for two reasons:
1. The number of WIC State agencies that use State or local free or
reduced-price income guidelines has declined over the years. At this
time, all 88 WIC State agencies use income guidelines which are set at
185 percent of the Federal poverty income guidelines, established and
updated annually by the Department of Health and Human Services.
2. Current WIC Program regulations at Sec. 246.7(d)(2)(iii) allow
State agencies using State or local free or reduced-price health care
income guidelines to use the State or local definition of income,
provided that the values of in-kind housing or other in-kind benefits
are not counted toward an applicant's income determination and that no
one with gross income over 185 percent of the Federal poverty income
guidelines is determined eligible for WIC. Because the local agency
must ensure that the applicant's income is within the Federal
guidelines after applying the State or local income definition,
procedurally it would be simpler for local agencies to apply the WIC
income definition and exclusions outlined in the regulations to all
applicants rather than apply two sets of income guidelines and family
definitions and exclusions.
B. Consideration of Loans as Income
Finally, this proposal would specify that funds from loans are
excluded from consideration as income when determining an applicant's
income eligibility. Program regulations have not specifically addressed
this issue; however, FNS Instruction 803-3, Rev. 1, clarifies that
funds from loans are not to be counted as income because they are only
temporarily available and must be repaid.
6. Limitation on the Use of Possibility of Regression as a Nutrition
Risk Criterion (Sec. 246.7(e)(1)(vi)
Historically, program regulations have permitted WIC participants
to remain on the program due to the possibility of regression, i.e.,
previously certified participants who might regress in nutritional
status if they are not allowed to continue to receive WIC benefits. The
possibility of regression has been allowed as a nutrition risk
criterion in order to prevent the ``revolving door'' situation in which
individuals improve their nutritional status as the result of
participation in the WIC Program and are therefore removed, only to
deteriorate in nutritional status at a later date and have to re-enter
the program.
It has always been the Department's position, however, that the
possibility of regression should not be used excessively as a nutrition
risk criterion,
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because this practice may result in participants with no current
nutrition risk condition continuing to be served while other eligible
applicants who do have current nutritionally-related medical conditions
or deficient diets go unserved. To encourage the limited use of
regression, the Department confirmed the State agency's authority to
limit the number of times and circumstances under which a participant
may be certified for possible regression in a final rule published on
February 13, 1985 (50 FR 6108).
The use of regression as a basis for certification has continued to
cause concern, particularly as the Department has intensified its
efforts to encourage State agencies to target benefits to those persons
at greatest nutritional risk. Therefore, the Department issued further
guidance on the use of regression in FNS Instruction 803-2, Rev. 1,
which recommends that possibility of regression be employed as a reason
for certification one time at most. The Instruction also clarifies that
certification based on possible regression for Priority II infants is
generally inappropriate, because the infant's certification is based
upon the mother's nutrition risk condition, and there is no prior
condition on which to base the infant's supposed regression.
While the possibility of regression can be a legitimate basis for
certification, a regulatory limit on its use would ensure that
possibility of regression is not employed repeatedly as a basis of
continued program participation by persons who are not currently at
nutritional risk. Such a limit is consistent with the Department's
efforts to target benefits to those persons in greatest need and at
greatest nutritional risk. Further, a limit on the use of possibility
of regression as a basis for certification is logical because the term
itself implies that there must be a prior nutrition risk condition on
which the regression would be based. Therefore, it follows that once a
participant has been certified one time for possible regression to a
prior condition, there is no longer a prior nutrition risk condition to
justify an additional certification on this basis.
In view of these concerns, we propose to prohibit the use of
possibility of regression as the basis of nutrition risk eligibility
for consecutive certifications.
Example: A child might be initially certified for WIC based on
iron-deficiency anemia; at the end of that 6-month certification
period, s/he might have improved just enough to be barely outside
the definition of anemia established by the Centers for Disease
Control and Prevention (CDC), and could legitimately be certified
for another 6 months based on the possibility of regression to his/
her earlier anemic condition. At the end of this second
certification period, if this child does not exhibit some other
condition that is an allowed nutrition risk, s/he would no longer be
eligible to receive WIC benefits.
State agencies who elect to use the possibility of regression as a
basis for WIC certification would be expected to certify the WIC
participant either at the same priority level for which s/he was
initially certified (based on a specific medical, anthropometric, or
dietary condition) or at the Priority VII level (if the State agency is
using Priority VII). State agencies should also keep in mind that in
those situations where a waiting list must be used because funding
levels are limited, the certification of an applicant based on the
possibility of regression to a prior condition can exclude the
certification of another applicant who may be at greater nutritional
risk, and should make their decisions about the use of regression (as
well as the priority levels to which it applies) very carefully.
Commenters should note that this proposal would not place an
absolute limit on the number of times that regression can be used as
the nonconsecutive basis for certification. This provision would not
restrict, for example, the certification of a child on the basis of
possibility of regression several times during the years that s/he is
categorically eligible. The Department believes that this provision
places a reasonable limit on the use of possibility of regression but,
at the same time, recognizes instances in which a subsequently
developed nutrition risk condition may warrant an additional
certification period based on the real possibility of regression to
that condition. Finally, the provision in no way infringes upon the
State agency's authority to limit the circumstances under which a
participant may be certified for possible regression, as long as the
condition in question is one to which an individual can actually
regress. Because it is not possible for a woman who has been receiving
WIC benefits as a pregnant woman to regress to that pregnancy once it
has ended, it would not be appropriate to certify her as a postpartum
woman based on a condition that was caused by or unique to her
pregnancy, such as hyperemesis gravidum (morning sickness) or
pregnancy-induced hypertension.
7. Certification Periods (Sec. 246.7(g)(1))
In response to concerns cited by Congress, State agencies, and the
National WIC Association (NWA) (formerly known as the National
Association of WIC Directors (NAWD)), the Department proposes to modify
the timeframes for certification periods in order to make them more
consistent across participant categories. Current regulations establish
the following timeframes for certification:
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A/an: Is currently certified:
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Pregnant woman............... For the duration of her pregnancy, and up
to 6 weeks after the infant is born or
the pregnancy is ended.
Postpartum woman............. Up to 6 months after the baby is born or
the pregnancy is ended (postpartum).
Breastfeeding woman.......... Every 6 months ending with the infant's
first birthday.
Infant....................... Approximately every 6 months. The State
agency may permit its local agencies to
certify infants under 6 months of age up
to the last day of the month in which
the infant turns 1 year old, provided
the quality and accessibility of health
care services are not diminished.
Child........................ Approximately every sixth month ending
with the last day of the month in which
a child reaches his/her fifth birthday.
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Some State agencies have expressed concern that the timeframes for
establishing certification periods are complicated and administratively
burdensome. These State agencies contend that current regulations
require the frequent proration of monthly food benefits and special
data processing capabilities to accommodate specific cut-off dates.
NWA/NAWD has also expressed concern about the lack of consistency in
certification period timeframes.
The Department fully supports greater simplicity and consistency in
this area. Therefore, the Department proposes to adopt the
recommendation made by NWA/NAWD to allow certification periods for all
participant categories to be extended to the end of the month.
[[Page 71778]]
Specifically, the following maximum certification periods are proposed
in Sec. 246.7(g)(1):
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A/an: Will be certified:
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Pregnant woman............... For the duration of her pregnancy, and up
to the last day of the month in which
the infant becomes 6 weeks old. (For
example, if the infant is born June 4, 6
weeks after birth would be July 16, and
certification would end July 31.)
Postpartum woman............. Up to the last day of the sixth month
after the baby is born (postpartum).
Breastfeeding woman.......... Approximately every 6 months ending with
the last day of the month in which the
infant turns 1 year old.
Infant....................... Approximately every 6 months. The State
agency may permit its local agencies to
certify infants under 6 months of age up
to the last day of the month in which
the infant turns 1 year old, provided
the quality and accessibility of health
care services are not diminished.
Child........................ Approximately every sixth month ending
with the last day of the month in which
a child reaches his/her fifth birthday.
(No change from current regulations)
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The Department believes that these proposed timeframes will
alleviate concerns voiced by State agencies. However, we want to
emphasize that State and local agencies should continue to exercise
good judgment in assigning certification periods, particularly in the
case of pregnant participants. The current regulatory provision, which
limits the certification period for pregnant women to up to 6 weeks
postpartum, was designed to facilitate the scheduling of the mother's
and infant's visit to the clinic soon after delivery and to encourage
the prompt reassessment of continued program eligibility. Scheduling
the postpartum clinic visit within this timeframe best serves the
health care needs of the mother and the infant, and strengthens the
program's tie to health services. Commenters should note that this
proposed change would have the effect of extending a woman's
certification under the pregnant woman category to up to 9 weeks
postpartum. Some State and local agencies may not want to extend the
certification periods for these women, preferring instead to
concentrate their resources on women who are in the early months of
pregnancy.
Finally, the proration of program benefits for all participant
categories continues to be an effective means of targeting benefits and
managing program costs. State agencies should also be aware that these
proposed regulations would not remove their authority to maintain
current certification period lengths or to permit local agencies to
shorten certification periods on a case-by-case basis. The Department
encourages State agencies to exercise this authority as appropriate.
8. Certification Forms (Sec. 246.7(i))
The Department proposes to allow State agencies the option of
substituting simpler language in order to make the ``rights and
obligations'' statement contained in Sec. 246.7(i)(10) clearer to
applicants. State agencies would also have the option of modifying the
language at Sec. 246.7(j)(2)(i)-(iii), which must be read to or by the
participant (or parent/caregiver of a participating infant or child) at
the time of certification along with the statement of ``rights and
obligations'' contained in paragraph (i)(10). Modification of the
``rights and obligations'' statements would be subject to FNS approval
during the State Plan approval process. Approval of alternate language
would be contingent upon whether the language substitutions convey the
same meaning and intent as the existing regulatory text.
In addition, in Sec. 246.7(i)(11), the required content of the
certification form statement which acknowledges the potential
disclosure of applicant and participant information would be revised to
incorporate the changes proposed in Sec. 246.26(d) pertaining to
confidentiality and data sharing. These changes primarily pertain to
expansion of the types of programs with which information can be
shared. The proposed changes are discussed later in this preamble as
part of a larger discussion about confidentiality.
9. Continuation of Benefits During Fair Hearings (Sec. 246.9(g))
It has come to the Department's attention that current provisions
at Sec. 246.9(g) allow for the continuation of benefits for a
categorically ineligible participant who has appealed an adverse action
to terminate benefits and is waiting for a fair hearing decision. The
situation involves breastfeeding participants who continued to receive
WIC benefits although they had discontinued breastfeeding and were more
than 6 months postpartum. These participants, as postpartum non-
breastfeeding women, are no longer categorically eligible for program
benefits and should be terminated from the WIC Program. Under these
circumstances, when a change in the participant's breastfeeding status
becomes known to the WIC local agency and the participant is not
eligible to continue receiving benefits as a postpartum participant,
the agency would issue a notice of adverse action to terminate
benefits. Such written notice must be issued not less than 15 days
before the benefits are actually terminated. However, the language at
paragraph (g) of this section technically allows the categorically
ineligible individual to continue to receive WIC benefits during the
appeal process. To correct this minor inconsistency, the Department
proposes to revise paragraph (g) to prohibit any participants who have
become categorically ineligible from continuing to receive benefits
while a fair hearing decision is pending.
10. Prohibition Against the Use of Program Funds To Provide Retroactive
Benefits (Sec. 246.14(a))
This proposed rule would specify that WIC Program funds may not be
used to provide retroactive benefits to participants. Regulations have
not previously addressed the issue of retroactive benefits, although it
has been a long-standing policy in the WIC Program (based on
fundamental principles of appropriation law) that such benefits are
inappropriate. The WIC food package is designed to be consumed during
specified periods when participants are undergoing critical growth and
development. Providing WIC foods to persons after they have passed
through such periods is not consistent with the nutritional goals of
the WIC Program, nor is it appropriate to give participants more food
than they can reasonably consume within a given period of time. In
either case, it is not an effective use of program benefits. A
regulatory prohibition against the use of program funds to provide
retroactive benefits would clearly and formally establish the
[[Page 71779]]
inappropriateness of such benefits in WIC.
11. Transportation as Allowable Costs (Sec. 246.14(c)(7))
The Department has learned that a number of urban and suburban
localities experience difficulties in serving needy program eligibles
due to inadequate access to transportation by existing or potential WIC
participants. Limited, expensive, or nonexistent transportation has
been identified as a primary barrier that prevents or discourages
potentially eligible persons and participants from getting to WIC
clinics. To address this problem, several State agencies have purchased
mobile vans to deliver WIC services to participants in ``non-rural''
areas. State agencies have also requested approval to purchase vans to
transport participants to and from inner city and suburban clinics.
Currently, however, the allowability of such transportation costs is
limited to assisting rural participants. Because State agencies may
purchase vans to bring WIC services to participants, it seems only
reasonable to allow the transportation of WIC participants to WIC
clinic sites in any situation, rural or non-rural, where access is a
barrier. The Department wants to remove unnecessary barriers that
prevent State and local agencies from reaching potentially eligible
persons. Therefore, the Department proposes to revise Sec.
246.14(c)(7) by removing the limiting word ``rural'' from the
allowability of costs in transporting applicants and participants to
clinics.
In developing policies to allow reimbursement to local agencies for
transportation costs, State agencies should consider other competing
demands for nutrition services and administration (NSA) funds. State
and local agencies should note that alternatives to providing
transportation to participants exist, such as establishing fixed-
location satellite clinics in strategic locations with sufficient
access to public transportation. State agencies may want to limit
approvals to those areas where transportation is urgently needed to
ensure access and where they stand to get the biggest return in terms
of increased participation. Finally, State agencies should be aware
that approving local use of NSA funds for transportation of some
participants may raise issues of fairness and civil rights concerns;
participants residing in areas where transportation to and from the WIC
clinic is not provided may argue that they too qualify or deserve such
a service given their circumstances. This underscores the need for
State agencies to develop a carefully-structured rationale for allowing
the provision of transportation assistance to certain participants that
cannot be perceived as a discriminatory policy.
Local agencies seeking to provide transportation must obtain prior
approval from the State agency, and must document that the
transportation service is essential to assure program access. A fee may
be charged for providing transportation services. The State agency must
advise participants that the provision of transportation is offered as
a convenience to the participant, and is not a condition of eligibility
or a standard program benefit. Finally, the Department proposes to
require that a State agency which elects to allow the provision of
transportation to participants must include its policy for approving
such costs in the portion of the State Plan that describes the State
agency's plans to provide program benefits to eligible persons most in
need of such benefits. Section 246.4(a)(21) would be revised
accordingly to reflect this requirement.
12. Capital Expenditures Which Require Agency Approval (Sec.
246.14(d))
The Department proposes three revisions to this section: A.
Paragraph (d)(1) would be deleted because the purchase of automated
information systems constitutes a capital expenditure and therefore is
subject to the requirements for prior approval from FNS. This
modification simplifies prior approval requirements.
B. Paragraph (d)(3) would also be deleted. Current WIC regulations
at Sec. 246.14(d)(3) require prior FNS approval for management studies
performed by agencies or departments other than the State or local
agency or those performed by outside consultants under contract with
the State or local agency. However, on May 17, 1995, the Office of
Management and Budget (OMB) published a revision to its Circular A-87,
Cost Principles for State, Local and Indian Tribal Governments. The
revision no longer requires prior approval of the cost of management
studies. To be consistent with revised OMB Circular A-87, prior
approval of the cost of management studies is no longer required for
WIC State agencies. State agencies were advised of this change through
WIC Policy Memorandum 98-8, issued by FNS on September 30, 1998.
C. The third revision to this section redesignates paragraph (d)(2)
as paragraph (d). The newly designated paragraph (d) would then be
revised to eliminate the specific dollar threshold for capital
expenditures above which State agencies must obtain the prior approval
of FNS. The dollar threshold is being eliminated in recognition of a
change in OMB Circular A-87 that allows Federal awarding agencies to
waive prior approval requirements in regard to capital expenditures for
equipment. Therefore, rather than specify a dollar threshold, newly
designated paragraph (d) will be revised to say that State agencies
must obtain prior approval for capital expenditures in accordance with
FNS policy and guidance. Please note, however, that FNS waiver
authority is applicable only to the requirement for prior approval.
Equipment costs that do not meet requirements or tests for allowability
(as determined by audits or other means) may still be disallowed.
The Department believes that these provisions are reasonable and
will not compromise accountability.
13. Other Program Income (Sec. 246.15(b))
The Department proposes to revise paragraph (b) of this section to
authorize the use of the addition method of applying program income. As
required at 7 CFR 3016.25(g)(1) and (2), the deduction method of
applying program income must be used unless the addition method is
authorized through program regulations. If the addition method is
authorized, program income may be added to the funds committed to the
grant agreement by the Federal agency and the grantee. The following
example describes the difference between the deduction and the addition
methods of applying program income:
If a State agency receives a WIC grant of $1 million and it
generates program income of $5,000, the deduction method would allow
the State to spend $1 million: $995,000 to be funded by the Federal
grant, and $5,000 to be funded by the program income. The remaining
$5,000 in Federal grant funds is returned to FNS for reallocation.
Using the same amounts, under the addition method the State agency
could spend a total of $1,005,000--its $1 million grant plus its
program income of $5,000.
The Department believes that State agencies should be authorized to
use the addition method of applying program income because the addition
method encourages State agencies and clinics to make the best use of
Program funds, including generating new revenues that are used for
Program purposes.
14. Closeout Procedures (Sec. 246.17(b)(2), Sec. 246.12(f)(2)(iv),
and Sec. 246.12(q))
To help ensure timely allocation of funds and closeout of WIC
expenditures for the previous fiscal year, the Department proposes that
the current 150-day reporting cycle, as described in
[[Page 71780]]
Sec. 246.17(b)(2), be reduced to 120 days. Under the current 150-day
reporting cycle, the participant has 30 days to redeem the food
instrument from the date it first becomes valid (as described in Sec.
246.12(q)), and the vendor has a maximum of 90 days from the first
valid date of the food instrument to submit it for payment (Sec.
246.12(f)(2)(iv)). Thus, in the first 90 days of the reporting cycle,
if the participant uses his/her full 30 days to redeem the food
instrument at an authorized vendor's place of business, that vendor
still has 60 days to submit the food instrument to the State agency for
payment. The State agency then has the remaining 60 days left in the
150-day cycle in which to review the food instrument for accuracy,
approve payment to the vendor, bill appropriate companies, and receive
payment of any negotiated rebates.
The Department notes that most State agencies are already reporting
99 percent of food outlays within 120 days or less. Conference Report
language from the Agriculture Appropriations Act for Fiscal Year 1998
(House Report 105-825) specifically directs the Department to reduce to
120 days the time period in which States are required to report on
monthly obligation of funds. To reduce the expenditure reporting cycle
from 150 days to 120 days, the Department proposes to revise Sec.
246.12(f)(2)(iv) to reduce the amount of time currently allowed for
redemption of the food instrument by authorized vendors from 90 days to
60 days. This reduction would still allow the vendor a minimum of 30
days to submit a food instrument for payment, even if a participant
took the entire allowable 30 days to redeem the food instrument. As it
is in the vendor's interest to receive payment for the food instruments
as soon as possible, the Department does not believe that this change
would impose a burden on vendors. Comments are welcomed on the impact
of the provision, and any specific problems that State agencies foresee
in meeting a shorter reporting cycle.
15. State Audit Responsibilities (Sec. Sec. 246.20(b)(1) and (2))
Proposed language at Sec. 246.20(b)(1) would direct State agencies
to the requirements of 7 CFR part 3052 for obtaining audits. State
agencies would be required to instruct local agencies, including
private nonprofit local agencies, that they must obtain audits in
accordance with 7 CFR part 3052. Further, State agencies would inform
local agencies that they may choose to obtain either an organization-
wide audit or a WIC Program-specific audit if allowed to do so under
the provisions of 7 CFR part 3052.
This proposed language is needed for two primary purposes:
First, it references Departmental audit requirements at 7 CFR part
3052. Second, the revised language establishes State agency
responsibility for ensuring that local agencies are appropriately
audited.
Consistent with the proposed revisions to paragraph (b)(1) of this
section as described above, the Department further proposes to delete
paragraph (b)(2). The references in paragraph (b)(1) to 7 CFR part 3052
which contain the requirements for organization-wide audits make the
specific listing of those requirements in paragraph (b)(2) redundant.
16. State Agency Reporting Requirements (Sec. Sec. 246.25(b) and (c))
The Department proposes a number of revisions to the State agency
reporting requirements at Sec. Sec. 246.25(b) and (c). A reporting
system should yield useful management tools for both Federal and State
program managers, and should be responsive to requests for program
information from Congress and the general public. The objectives of the
proposed revisions to Sec. 246.25 in this rulemaking are to encourage
faster reporting, better quality data, more efficient data collection,
and a reduction in the current paperwork burden on State agencies.
Participation Reporting
Under the regulatory requirements as detailed in Sec. 246.25,
State agencies should report actual and projected participation and
expenditure information on a monthly basis. In order to bring the
regulatory language up to date with current reporting practices, the
Department proposes several revisions to these monthly reporting
requirements, listed in paragraph (b)(1).
A. The stated purpose for reporting monthly financial and program
performance data is to support program management and funding
decisions.
B. Most of the items specified in paragraph (b)(1) as currently
requiring monthly reporting would be retained, except that the
requirement to report itemized NSA expenditures would be dropped;
instead, only the monthly totals of NSA expenditures would be reported.
C. Itemized NSA expenditures would be reported annually, as an
addendum to the fiscal year closeout report.
D. State agencies would also report actual and projected food funds
expenditures and available food and NSA funds, which would be listed by
the funding source year. This information is necessary in order to
improve monitoring of program expenditures as well as to keep FNS fully
informed about State agency plans to use available funds. It is, in
fact, the reporting of this data that alerts FNS to impending caseload
management problems. Early warning and prudent action based on this
information should avert the need for severe caseload fluctuations.
Section 17(i)(2) of the Child Nutrition Act of 1966 (CNA) as
amended, requires the Secretary to reallocate funds periodically, if a
State agency is unable to spend its full allocation. To fulfill this
obligation, FNS must make funding determinations that involve
continuous forecasting and reevaluation of State agencies' funding
needs through the analysis of reported data. The Department would
retain regulatory language at paragraphs (b)(1)(i) and (ii) of Sec.
246.25, which specifies additional information that State agencies may
be required to include in their monthly financial and participation
reports. This information pertains to the amount of excess cash
allowances held by local agencies and the actions taken by the State
agency to reduce such excess balance.
The Department proposes to revise paragraph (b)(2) of this section
to delete the quarterly report of participants by category (i.e.,
pregnant women, breastfeeding women, postpartum women, infants, and
children) and by priority level. This revision corresponds to reporting
changes made in Fiscal Year 2001 to reduce paperwork. Additionally, the
number of migrant participants, as well as itemized NSA funds
expenditures, which current regulations require to be reported monthly,
would be reduced to an annual reporting requirement.
Reporting quarterly on participation by priority and category
became a requirement with the May 3, 1988, publication of revised
program regulations. The Department's purpose in requiring State
agencies to report this information four times a year was two-fold.
First, it enabled FNS to determine how well State agencies were
targeting limited program benefits to persons eligible within the
highest priority groups. Second, the data were used in the formula for
allocation of food funds. In Fiscal Year 1993, State agencies began
reporting these data annually instead of quarterly. WIC funding
formulas no longer utilize priority data and priority participation is
relatively stable. Thus in Fiscal Year 2000, State agencies began
reporting these data every other year instead of annually.
[[Page 71781]]
The regulatory language would be revised to reflect the current
practice in which State agencies report participation by priority every
other year. While State agencies continue to track participation by
priority on a monthly basis for program management purposes, they only
have to report the data to FNS once every other year.
As previously mentioned, the regulatory language would be revised
to require that the itemized NSA expenditures are reported through an
addendum to the annual closeout report. The itemized NSA expenditures
are used to determine a State agency's compliance with the statutory
requirements (section 17(h)(3)(A)(i)(I) and (II) of the CNA) to spend
at least one-sixth of its NSA expenditures on nutrition education and
its proportionate share of the national minimum breastfeeding promotion
expenditures.
Section 17(g)(4) of the CNA requires that not less than nine-tenths
of one percent of the annual WIC Program appropriation shall be
available first for services to eligible members of migrant
populations. In order to determine the migrant expenditure target
amount each year, FNS needs documentation of each State agency's annual
average migrant participation. To calculate each State's share of the
migrant expenditure target, FNS uses a 12-month average of State
migrant participation. Because a 12-month average is used for
establishing the annual migrant expenditure target, yearly submission
of the average of 12 months of data is sufficient.
Racial/Ethnic Group Reporting
The Department also proposes revisions to Sec. Sec. 246.25(b)(3)
and (c) to reflect current reporting practices that have reduced
reporting of participant category by priority level and racial and
ethnic participation data to a biennial basis. Prior to Fiscal Year
1993, racial and ethnic participation information had been collected
and reported annually by all local agencies, through the State
agencies, on the form FNS-191 (Racial/Ethnic Group Participation
Report). Not only did the FNS-191 constitute a significant reporting
burden, but it was also duplicative. Racial and ethnic data are
captured by the Participant Characteristics (PC) Minimum Data Set
(MDS), a comprehensive reporting format designed by FNS to provide
information for the biennial report provided to the Secretary of
Agriculture and to Congress on income and nutritional risk
characteristics, migrant farmworker status, and other matters
determined by the Secretary. Beginning with the 1992 PC report, WIC
State agencies have provided an MDS using a census or a State-
representative sample of WIC participants, making use of ongoing data
collection routinely conducted as a component of WIC certification. The
racial/ethnic group data collected on the MDS is identical to the data
collected on the FNS-191. Therefore, the Department proposes the
following revisions to the biennial reports at Sec. 246.25(b)(3) that
reflect the current reporting practices:
A. Add a new paragraph (b)(3)(i) that names and describes the
participant characteristics reporting requirements;
B. Redesignate paragraph (c) of this section as paragraph
(b)(3)(ii); and
C. Specify that racial and ethnic participation data submitted for
the Report on Participant Characteristics will also be used to fulfill
civil rights reporting requirements.
Finally, the Department proposes to add a new paragraph (c) to this
section to collect data that were previously only reported on the FNS-
191. In addition to racial/ethnic data provided by the FNS-191, the
name, address, telephone number, and number of clinics of all WIC local
agencies were reported. FNS has compiled this information into an
annual directory of local agencies, and it has become an indispensable
resource for program communications. The local agency directory has
been used to provide referrals to participants inquiring about the
availability of WIC Program services, to maintain continuity of program
services for migrants and other transient participants, and to provide
a cross-reference for the PC MDS data to ensure complete coverage of
all local agencies. To prevent the loss of this valuable local agency
information, the Department proposes to revise the regulatory language
to require State agencies to submit additions and deletions of local
agencies administering the WIC Program, as well as local agency address
changes, when such changes occur.
17. Confidentiality of Participant Information (Sec. Sec. 246.26(d)
through (i)
The Department proposes several revisions to the participant
confidentiality provisions in Sec. 246.26(d) of the current
regulations. This rule would completely revise paragraphs (d) and (g)
and add new paragraphs (h) and (i) to address the use and disclosure of
confidential information. The Department proposes these changes in
order to remove barriers to coordination among programs caused by
restrictions on sharing participant information, and to provide
regulatory clarification and guidance on legal issues pertaining to the
release of confidential applicant and participant information in
connection with court proceedings, criminal investigations, or
instances of known or suspected child abuse or neglect.
State agencies are reminded that under both the current and
proposed confidentiality provisions, confidential applicant and
participant information may be used or disclosed only to the extent
permitted by those provisions. Any other use or disclosure is not
permitted. Additionally, State agencies should be aware that
information obtained from WIC applicants or participants is protected
by these provisions regardless of the manner in which the information
is recorded or stored. For example, confidential information that is
written in a participant case file, confidential information that is
stored on a magnetic medium, such as computer tape or disk, or as part
of a general office record such as a sign-in sheet, are equally
protected. State agencies must ensure that confidential information
stored on computer disks or tapes will not be available to persons or
programs that are not authorized to receive such data.
The additional flexibility afforded by this proposed rule would not
disturb the balance between sharing information in the interest of
enhanced services and safeguarding information so that barriers to
Program participation are not created. We are fully committed to the
principle that the integration of health care and social service
programs must proceed with careful regard for an individual's right to
privacy.
A. Definition of Confidential Applicant and Participant Information
Current Program regulations, at Sec. 246.26(d), limit the use and
disclosure of information obtained from applicants and participants.
The current confidentiality provisions do not differentiate between the
treatment of information about applicants and participants obtained
from other sources or generated as a result of WIC application,
certification, or participation. This rule would make clear in proposed
Sec. 246.26(d)(1) that confidential applicant and participant
information is any information about an applicant or participant
(whether it is obtained from the applicant or participant, another
source, or generated as a result of WIC application, certification, or
participation) that individually identifies those individuals and/or a
family member(s).
[[Page 71782]]
B. Use in the Administration and Enforcement of the WIC Program
Presently, applicant/participant information may be used and
disclosed to only the following:
1. Persons directly connected with the administration or
enforcement of the WIC Program;
2. Representatives of public organizations designated by the chief
State health officer (or the governing authority in the case of Indian
State agencies) which administer health or welfare programs that serve
persons categorically eligible for the WIC Program; and
3. The Comptroller General of the United States, for audit and
examination.
In addition, current Sec. 246.25(a)(4) requires State agencies to
provide the Department and the Comptroller General of the United States
access to all Program records, except medical care records of
individual participants unless they are the only source of
certification data.
This rule would clarify the scope of the first category by
emphasizing that even when confidential applicant/participant
information is used for the administration or enforcement of the WIC
Program, it may only be used by persons who have a need to know the
information. Confidential applicant/participant information may include
sensitive financial and medical information and not all State agency or
local agency personnel need access to this information. Also, the
proposed rule makes clear that this information may be used for the
administration and enforcement of any WIC Program, not just by the
State agency or local agency where the applicant or participant is
certified. This clarification is necessary to facilitate the transfer
of participants from one State agency or local agency to another and
for Program oversight.
C. Use and Disclosure for non-WIC purposes
Currently, State agencies choosing to disclose applicant/
participant information to public organizations designated by the chief
State health officer pursuant to the second category discussed above
must execute a written agreement with each agency. The agreement must
limit the use of the information by the receiving agency to
establishing eligibility for their own programs and conducting outreach
for such programs. The organizations must assure that WIC applicant/
participant information will not be disclosed to a third party. Also,
Sec. 246.7(i)(9) in current regulations requires State agencies to
inform WIC applicants on the WIC certification form that information
they provide may be disclosed to public organizations that administer
other health or welfare programs for purposes of determining
eligibility and conducting outreach.
Although section 17 of the CNA does not address the confidentiality
of WIC information, the current regulations at Sec. 246.26(d) and the
guidance provided in FNS Instruction 800-1 reflect the Department's
commitment to maintaining the confidentiality of the financial and
health information of WIC applicants and participants. The current
narrow avenues of disclosure of confidential applicant/participant
information reflect the Department's position that an individual's
right to privacy interests should not be surrendered as a condition of
Program participation. Even more fundamentally, the Department
understands that individuals may refuse to apply or participate in the
WIC Program if they fear that their privacy will not be safeguarded.
At the same time, the Department recognizes that there are
legitimate reasons for disclosing confidential information, many of
which directly benefit the applicant or participant. One important
reason is to facilitate the delivery of health services and other
benefits for which WIC applicants or participants are eligible.
Coordination among programs and ``one-stop shopping'' represent a
dynamic area of growth and development in public service delivery.
Requests for access to WIC applicant and participant information as a
practical means of facilitating services have increased as States and
local agencies strengthen coordination efforts with other agencies or
persons delivering benefits or services to WIC applicants/participants.
Members of Congress have also encouraged greater coordination among
health, education, and social service programs as an effective means of
maximizing funds and reaching individuals who are eligible for several
programs. Finally, there are indications that the ``users'' of public
health, education, and social service programs desire a more
convenient, coordinated, integrated system of service delivery.
The Department's goal is to facilitate these coordination efforts
without sacrificing the privacy interests of applicants and
participants. We are committed to maintaining the confidentiality of
applicant/participant information as programs coordinate services and
share information, although the task becomes more challenging. One way
to control the access of confidential information while promoting
coordination is through the use of a written agreement between
programs, specifying how and with whom data may be disclosed, and the
proposed use of such information.
For these reasons, the Department proposes to allow State agencies
greater flexibility in determining organizations to which they may
disclose confidential applicant/participant information pursuant to
written agreements as well as the permissible uses of such information.
Specifically, in proposed Sec. 246.26(d)(2) the reference to ``health
or welfare'' programs would be removed. This would provide State
agencies greater latitude in choosing appropriate programs with which
to coordinate and share information. Additionally, proposed Sec.
246.26(h)(3)(i) would expand the permitted uses of confidential
applicant/participant information to add three new categories. As noted
above, currently applicant/participation information may be used by
another public organization only for the purpose of establishing
eligibility and conducting outreach for the programs administered by
that organization. The three new categories of permissible use proposed
by this rule are:
[sbull] Enhancing the health, education, or well-being of WIC
applicants or participants;
[sbull] Streamlining administrative procedures in order to minimize
burdens on staff and applicants or participants; and
[sbull] Assessing and evaluating a State's health system in terms
of responsiveness to participants' health care needs and health care
outcomes.
However, as a balance to this proposed expansion, the Department
proposes a new Sec. 246.4(a)(24) that would require State agencies to
include in their State Plan a list of the programs with which the State
agency or its local agency has or intends to execute written agreements
for the disclosure and use of confidential applicant/participant
information and planned use of the information, consistent with the
uses authorized in proposed Sec. 246.26(d). This rule includes a
cross-reference to the State plan requirement in proposed Sec.
246.26(h)(3). This list is to be included in the State Plan for
informational purposes only; FNS does not need to approve State
agencies' decisions in this matter as long as the reasons for sharing
information are consistent with the authorized uses in the proposed
rule.
This broader language would address some situations that State
agencies have cited as examples of administrative inefficiency or as
barriers to the health
[[Page 71783]]
and well-being of WIC applicants and participants resulting from the
current confidentiality provisions. For example, these proposed changes
would:
[sbull] Permit streamlining of duplicative administrative and
health procedures among programs;
[sbull] Make it easier to coordinate with public educational
programs, such as the Expanded Food and Nutrition Education Program
(EFNEP), or with educational organizations that provide health services
to WIC applicants or participants;
[sbull] Encourage sharing information with other programs in which
WIC participants are currently enrolled, such as Head Start; and
[sbull] Permit sharing with child protective service programs
certain information that is deemed to be critical to the health and
well-being of WIC participants.
This proposed rule also would make clear in proposed Sec. Sec.
246.26(d)(2) and (h)(3) that the conditions for disclosing confidential
applicant/participant information extend to non-WIC use of the
information by the State agency and its local agencies. In these cases,
the written agreement would be between the WIC State agency or local
agency and the unit of the WIC State agency or local agency that will
be using the information for non-WIC purposes. The rule proposes to
require a written agreement in these instances because the State or
local agency personnel who will be using the information for non-WIC
purposes may be unfamiliar with the limits on the use of the
information. Requiring a written agreement in these cases provides an
additional safeguard for this sensitive information.
Some State agencies have objected to the requirement of written
agreements prior to disclosing applicant/participant information
because of the amount of paperwork that can be involved, especially
when programs are not administered at the State level. The Department
agrees that written agreements may not always be practical for sharing
information, and later in this preamble we discuss the situations in
which release forms may be used. However, there are ways to limit the
amount of paperwork involved in written agreements in some situations.
For example, FNS Instruction 800-1 states that separate agreements do
not have to be executed for each program. Instead, the chief State
health officer (or his equivalent) may list in one agreement all of the
programs with which information is to be disclosed. Responsible
officials for each of the programs listed would then sign the written
agreement. This rule would retain the requirement for written
agreements between WIC and other program providers because such
agreements establish accountability. They also provide a protocol for
sharing data, thus protecting confidential information.
State agencies that choose to share information as authorized by
Program regulations are not required to obtain a separate release form
signed by the applicant or participant. However, this rule would
require State and local agencies that choose not to use release forms
to notify applicants and participants at the time of application or
through a subsequent notice that information about their participation
in the WIC Program may be used by State and local WIC agencies and
public organizations in the administration of their programs that serve
persons eligible for the WIC Program. This requirement is contained in
proposed Sec. Sec. 246.7(i)(11) and 246.26(h)(2) of this proposed
rule.
D. Child Abuse and Neglect Reporting
In the past, questions have arisen about the disclosure of
applicant/participant information to child protective services or other
State or local officials in cases of known or suspected child abuse or
neglect. The Department's current policy, as detailed in FNS
Instruction 800-1, is determined by Federal and State law. The
Department's policy stems from a requirement in Section 106 of the
Child Abuse Prevention and Treatment Act (42 U.S.C. 5106a). This Act
authorizes the Secretary of Health and Human Services to make grants to
States to assist them in developing and implementing child abuse and
neglect prevention and treatment programs. A State's statute must
require that known or suspected child abuse or neglect be reported to
specified persons in order for that State to receive such grants.
Generally, the Department's regulations take precedence over State laws
or regulations. However, in this case State laws requiring the
reporting of suspected child abuse reflect federal statutory intent
designed to safeguard the health and well-being of the nation's
children.
If a State statute requires known or suspected child abuse or
neglect to be reported, then WIC staff must report or release
applicant/participant information to State or local officials who have
requested such information. If State law does not require that known or
suspected child abuse be reported by public programs, such as WIC, the
guidance in FNS Instruction 800-1 encourages WIC State agencies to
consult with State legal counsel to determine the appropriateness of
reporting such information. The Department's position remains the same
as that stated in guidance. However, we propose to codify the current
policy as stated in FNS Instruction 800-1 in proposed Sec.
246.26(d)(3).
In the absence of State reporting laws, the proposed language at
Sec. 246.26(h)(3)(i)(C) would allow State agencies the option to
disclose such information if a written agreement has been executed
between the WIC State or local agency and the appropriate child
protective service organization. The written agreement could also be
used to strengthen ties between WIC and agencies that provide child
abuse counseling.
E. Release Forms
State agencies have requested latitude to allow medical information
to be disclosed to private parties such as physicians treating WIC
applicants or participants. After examining the issue, we concluded
that permitting a general or blanket release form under which an
applicant or participant would permit a local or State agency to
release confidential information to unidentified parties would be
inappropriately broad. At the same time, the Department recognizes that
some increased flexibility in disclosing medical information can be
beneficial to the applicant or participant, as well as the respective
party.
As a result, this rule proposes in Sec. 246.26(d)(4) to allow
disclosure of confidential applicant/participant information when an
applicant or participant signs a form authorizing disclosure and
specifying the parties to which the information may be disclosed. In
addition, the applicant or participant must be given the right to
refuse to sign the release form and notified that consent is not a
condition of WIC Program participation and that refusal to sign the
release form will not affect the application or participation in the
WIC Program. To underscore the voluntary nature of the release form,
the proposed rule would permit only release forms authorizing
disclosure to the applicant or participant's physicians or other health
care providers at the time of application or certification for the WIC
Program. All other requests for signature of release forms would be
required to take place after the application and certification process
is completed. In addition, to the extent that an applicant or
participant voluntarily signs a release form, agreeing that
confidential information may be disclosed, the restrictions in
[[Page 71784]]
proposed Sec. Sec. 246.26(d) and (h) would not apply.
F. Access by Applicants and Participants
This rule would codify in proposed Sec. 246.26(d)(5) the current
policy of requiring State and local agencies to provide applicants and
participants access to the information they provide. In the case of an
applicant or participant who is an infant or child, the State or local
agency would be required to provide access to the parent or guardian of
the infant or child, assuming that any issues regarding custody of
guardianship are resolved. This rule would not require State and local
agencies to provide access to any other information concerning an
applicant or participant, such as documentation of income provided by
third parties and staff assessments of the participant's condition or
behavior, unless required by Federal, State, or local law or policy or
unless the information supports a State or local agency decision that
is being appealed by the applicant or participant pursuant to Sec.
246.9.
G. Access by the USDA and the Comptroller General of the United States
This rule would also revise paragraph (g) in Sec. 246.26 to
clarify that access to Program records by the Department and
Comptroller General of the United States includes confidential
applicant and participant information. This rule also proposes to amend
Sec. 246.25(a)(4) to require State and local agencies to make
available to the Department and the Comptroller General all Program
records, including confidential applicant and participant information.
However, the proposed rule would prohibit any reports or other
documents resulting from the examination of such records that are
publicly released from including confidential applicant or participant
information. We also want to point out that the provisions providing
access to the Department and the Comptroller General extend to
contractors and other agents of the Department or the Comptroller
General who may be performing research or other activities on behalf of
the Department, so long as those activities relate to the
administration or enforcement of the WIC Program.
H. Subpoenas and Search Warrants
The Department additionally proposes to add a new paragraph (i) to
Sec. 246.26 that would specify the procedures State and local agencies
must follow in responding to requests from courts for confidential
information pertaining to WIC applicants, participants, and vendors.
The Department proposes to add these procedures to the WIC regulations
in response to an increase in instances in which State and local
agencies are presented with subpoenas or search warrants for
confidential applicant and participant information. This rule proposes
step-by-step procedures that State and local agencies, in consultation
with legal counsel, would be required to follow in handling these
requests. The proposed procedures are intended to create a basic,
standard approach that emphasizes the importance of preserving
confidentiality within the scope of the Federal regulations governing
the WIC Program. At the same time, these procedures would protect WIC
staff from adverse legal action for refusals to release confidential
information.
In proposed Sec. 246.6(i), the Department proposes to identify the
situations in which State or local agencies must release information:
when served with a search warrant or when served with a subpoena which
the court has already denied the State or local agency's attempt to
quash or which the local agency and legal counsel have reviewed and
determined not to attempt to quash. If the State or local agency fails
to comply in these situations, WIC staff may face adverse legal action,
including imprisonment.
This rule proposes different procedures for responding to subpoenas
as opposed to search warrants in recognition of the differences between
these legal documents. A subpoena is a written directive for
information to be provided by an individual or entity. Generally, a
subpoena directs an individual or entity to appear at a stated time and
place and give information on a topic about which the individual or
entity is knowledgeable. One type of subpoena is a ``subpoena duces
tecum.'' A subpoena duces tecum is a written directive that orders the
production and delivery of documents. Documents may be requested by
type, e.g., all records for participants of a certain age and gender,
or by topic, e.g., all documents which deal with immunization. The
deadline for delivery, as well as the site for delivery, is generally
specified. Search warrants are issued by the courts and are used by law
enforcement officers to obtain information, and sometimes objects, from
specific premises. Compliance with a search warrant is required at the
time the search warrant is served.
Compared to a search warrant, with which State or local agency
compliance must be immediate, a response to a subpoena may involve a
process of several steps. This process, as outlined at proposed
paragraph (i)(2), would allow State and local agencies, in consultation
with legal counsel, to determine how to respond to a subpoena when it
is initially received. However, if efforts to quash the subpoena (i.e.,
receive court approval not to comply with the directive) have been
denied by the court, then the State or local agency must comply.
Subpoenas duces tecum for information about Program participants
have been the most common type of court-ordered directive. Subpoenas,
whether directed to an individual or an entity, generally do not
initially represent a court's ruling that a WIC State or local agency
must release the requested information. However, subpoenas cannot be
ignored. The Department proposes that the primary consideration in
deciding how to respond to subpoenas follows the provisions of proposed
Sec. 246.26(i). Under the proposed procedures, State and local
agencies, acting on the advice of legal counsel, would first determine
whether the requested information is in fact confidential applicant or
participant information prohibited from release under the federal
regulations. If not, the state or local agency would provide the
information requested. If so, however, we propose that the State or
local agency, or legal counsel acting on its behalf, must proceed to
attempt to quash the subpoena. In doing so, the State/local agency or
legal counsel may be required to appear before the court to argue
against the release of information. The Department further proposes
that at a minimum in attempting to quash a subpoena, the State/local
agency or legal counsel acting on its behalf must inform the court of
the federal regulatory prohibitions against providing the requested
information. If the court denies the motion to quash the subpoena and
rules that the information must be released, then, as proposed in this
rule, the State/local agency or legal counsel would attempt to limit
the extent of the disclosure of confidential WIC Program information
by:
[sbull] Ensuring that the information released is only what is
essential to respond to the subpoena; and
[sbull] Limiting to the greatest extent possible the public access
to the confidential WIC information disclosed.
Occasionally, State and local agencies have confronted serious
dilemmas when requested confidential applicant or participant
information was key to the solution of criminal investigations of
felonies. Program regulations prohibited disclosure of the information,
even
[[Page 71785]]
though Program interests would have been well served in furthering the
investigations. The Department therefore proposes to recognize, in new
Sec. 246.26(i)(2)(iii), that in rare instances a State or local agency
in consultation with legal counsel could decide that disclosing
confidential applicant or participant information would be in the best
interest of the Program. Because requests arising from investigations
of this caliber and seriousness are rare, we expect State and local
agencies to conclude only infrequently that such disclosure is
necessary.
In Sec. 246.26(i)(3), the Department proposes to set forth
procedures for State and local agencies to follow when they are served
with search warrants. As proposed, the State and local agency are
required to:
[sbull] If a local agency, immediately notify the State agency;
[sbull] Immediately notify legal counsel;
[sbull] Comply with the search warrant;
[sbull] Inform the individual(s) producing the search warrant of
the confidential nature of WIC information; and
[sbull] Review the search warrant and provide only the specific
information requested in the warrant and no other information.
Search warrants differ from subpoenas in that generally, they are
issued or approved by a court in criminal matters only when law
enforcement officials have made an adequate showing of the need for the
search. Failure to comply with a search warrant at the time it is
served could result in the immediate imprisonment of WIC State or local
agency staff. As stated above, State or local legal counsel should be
alerted to the request for the provision of the information required in
the search warrant immediately upon service of the warrant. WIC clinic
staff should retain a copy of the search warrant for their files as
evidence of the cause of the specific information's being released.
The proposed process for responding to court-ordered requests for
confidential WIC Program information will assist State and local
agencies in handling future requests. These proposed procedures are
intended to achieve two objectives. First, the Department intends to
clarify through regulations the primacy of Federal authority to limit
disclosure of information in the interest of preserving the
confidentiality of WIC applicant/participant information. The
Department further intends to communicate a national, uniform approach
to disclosure of WIC records that will assist the courts in handling
matters related to the confidentiality of Program information. Because
of variation in State law, however, the Department encourages legal
counsel for State and local agencies to consider these proposed
revisions carefully, and to provide comments that will assist the
Department in issuing final regulations that are sufficiently flexible
to accommodate State laws in this area.
18. Conflict of Interest
One of the recommendations included in an August 1999 Report by the
General Accounting Office (GAO) addressing fraud and abuse in the WIC
Program (``FOOD ASSISTANCE: Efforts to Control Fraud and Abuse in the
WIC Program Can Be Strengthened'') stated that WIC State agencies
should be required to have policies and procedures for addressing
employee conflicts of interest at the local agency level. Conflicts of
interest may arise when local agency employees who participate in the
WIC Program are in a position to certify their own eligibility and
issue their own benefits. They may also arise when there is no
separation of duties within the local agency staff so that an employee
can certify and issue benefits to the same individual. The GAO report
indicated that 45 percent of the local WIC agencies do not have
conflict-of-interest policies in place for employees who also receive
WIC benefits. Furthermore, an estimated 30 percent of the local
agencies do not separate duties within the certification process. In
this latter case, employees could certify and issue WIC benefits to
relatives and friends.
The Department realizes that in many local agencies, the WIC
clinics do not have enough employees on site to separate these
essential duties. However, GAO reminds the Department that even in such
understaffed situations, prudent precautions can and should be taken.
For example, one agency uses a separate agency number for issuing WIC
benefits to employee participants. Another agency requires a
supervisor's sign-off whenever an employee is going to both certify and
issue benefits to the same individual because staffing levels are low.
Consistent with GAO's recommendation, a new paragraph (a)(25) would
be added to Sec. 246.4 to require that State agencies develop and
implement reasonable policies and procedures to prevent conflicts of
interest within the local agency staffs.
19. Participant and Employee Fraud and Abuse (Sec. 246.4(a))
The GAO study on fraud and abuse in the WIC Program also noted that
consistent and reliable information regarding participant fraud and
abuse--who is committing the fraud and how often, what types of fraud
are being committed, and how much program funding is lost--is important
in evaluating the effectiveness of both Federal and State agency
efforts aimed at preventing and detecting these problems. Currently,
State agencies do not collect information on the number and
characteristics of participants who engage in participant fraud and
abuse. In fact, nearly half of the states that were included in the GAO
study reported that they do not maintain such data. Without this
information, FNS is not able to assess the extent of participant fraud
and abuse, evaluate State and local agencies' efforts to control it, or
identify the changes needed to improve program integrity.
GAO suggests that not collecting such information may send an
unintentional message to agency officials and other stakeholders that
preventing and detecting participant/employee fraud and abuse is a low
priority, thus damaging the public's trust in the WIC Program.
Therefore, this rule proposes that State agencies include as part of
the annual State Plan of Operation a description of the system(s) that
are in place at the local agency level for collecting and maintaining
information on cases of fraud and abuse by participants as well as by
employees (including any violations caused by employee conflicts of
interest described above). The information should include the nature of
the fraud detected and the associated dollar losses that are the actual
or estimated result of such fraud and abuse. This requirement would be
added to Sec. 246.4 of the regulations as a new paragraph (a)(26).
20. State Plan Requirements (Sec. 246.4(a))
The proposed revisions described above will also require several
changes to the State Plan. Therefore, Sec. 246.4(a)(11)(i) would be
revised to incorporate the following provisions:
(1) State agencies which allow local agencies the option of
requesting documentation of pregnancy from applicants would specify in
their State Plans the type of documentation that is requested, and
would also provide assurance that the request for documentation will
not constitute a barrier to participants.
(2) States would specify any alternate language, developed at their
option, that will be used to inform WIC applicants of their rights and
responsibilities, as provided in Sec. 246.7(i)(10) of this proposed
rule. The alternate language must be approved by FNS before it can be
used by WIC local agencies.
[[Page 71786]]
(3) State agencies must describe their policies concerning the
approval of local agency costs for transporting participants to and
from WIC clinics, as provided in Sec. 246.4(a)(18).
(4) A new paragraph (a)(24) would be added to this section to
require that State agencies list all programs with which written
agreements for sharing participant information have been or will be
executed. State agencies would also be required to specify the
reason(s), as specified by Sec. 246.26(d)(2)(i), for sharing
information with each program.
Procedural Matters
Executive Order 12866
This rule has been determined to be ``not significant'' for
purposes of Executive Order 12866, and therefore has not been reviewed
by the Office of Management and Budget (OMB).
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). Pursuant to that review,
Roberto Salazar, Administrator of the Food and Nutrition Service (FNS),
has certified that this rule will not have a significant effect on a
substantial number of small entities. State and local WIC agencies
would be most affected because there are several additional program
administration requirements. However, this rule also reduces
considerably more program administration requirements. The net effect
on State and local agencies is expected to result in reduced and
streamlined administrative procedures. Participants and applicants
would also be affected by changes in application processing,
certification, and the disclosure of information.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the Food
and Nutrition Service (FNS) is submitting for public comment the change
in the information collection burden that would result from the
adoption of the proposals in this rule, as indicated below.
Estimated Annual Reporting Burden
----------------------------------------------------------------------------------------------------------------
Annual number
Section of regulations of Annual Average burden Annual burden
respondents frequency per response hours
----------------------------------------------------------------------------------------------------------------
Reporting:
246.4(a)(11)(i)............................. 88 1 1.00 88.00
246.4(a)(11)(ii)............................ 88 1 .50 44.00
246.4(a)(18)................................ 88 1 1.00 88.00
246.4(a)(24)................................ 88 1 1.00 88.00
-----------------
Total Reporting Burden.................. 88 .............. 3.50 308.00
----------------------------------------------------------------------------------------------------------------
Comments are invited on:
[sbull] Whether the proposed collection of information is necessary
for the proper performance of the Agency's functions, including whether
the information will have practical utility;
[sbull] The accuracy of the Agency's estimate of the proposed
information collection burden, including the validity of the
methodology and the information to be collected; and
[sbull] Ways to minimize the burden of information collection on
those who are required to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology.
In addition to the proposed reporting requirements noted above,
this rulemaking would also update regulatory language at section 246.25
regarding the State agency reporting requirements to reflect the
current reporting requirements that began in Fiscal Year 1993.
Revisions to the information collection burden associated with these
reporting changes have been previously approved by OMB as follows:
[sbull] FNS-798 and -798A, WIC Financial Management and
Participation Report with Addendum (OMB 0584-0045);
[sbull] FNS-648, WIC Local Agency Directory Report (OMB
0584-0431).
Comments may be sent to Laura Wittenberg, Desk Officer for
Agriculture, Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), Washington, DC 20503. (A copy may also be
sent to Debra Whitford at the address below.) For further information,
or for copies of the information collection, please contact Debra R.
Whitford, Chief, Policy and Program Development Branch, Supplemental
Food Programs Division, Food and Nutrition Service, U.S. Department of
Agriculture, 3101 Park Center Drive, Room 540, Alexandria, VA 22302, or
telephone (703) 305-2730.
Comments and recommendations on the proposed information collection
must be received by January 31, 2003. A comment to OMB is best assured
of having its full effect if OMB receives it within 30 days of
publication.
Executive Order 12372
The Special Supplemental Nutrition Program for Women, Infants and
Children (WIC) is listed in the Catalog of Federal Domestic Assistance
Programs under No. 10.557, and is subject to Executive Order 12372,
which requires intergovernmental consultation with State and local
officials (7 CFR part 3015, subpart V, and final rule-related notice
published June 24, 1983 (48 FR 29114)).
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is intended to have preemptive effect with
respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the EFFECTIVE DATE paragraph of the preamble to
the final rule. Prior to any judicial challenge to the application of
the provisions of this rule, all applicable administrative procedures
must be exhausted.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 10404, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, the
Food and Nutrition Service generally must prepare a written statement,
including a cost-benefit analysis, for proposed and final rules with
``Federal mandates'' that may result in expenditures to State, local,
or tribal governments, in the aggregate, or to the private sector, of
$100 million or
[[Page 71787]]
more in any one year. When such a statement is needed for a rule,
section 205 of the UMRA generally requires the Food and Nutrition
Service to identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, more cost-effective, or least
burdensome alternative that achieves the objectives of that rule.
This rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or more in any one
year. Thus today's rule is not subject to the requirements of sections
202 and 205 of the UMRA.
List of Subjects in 7 CFR Part 246
Food assistance programs, Food donations, Grant programs-social
programs, Indians, Infants and children, Maternal and child health,
Nutrition, Nutrition education, Public assistance programs, WIC, Women.
For the reasons set forth in the preamble, 7 CFR part 246 is
proposed to be amended as follows:
PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS
AND CHILDREN
1. The authority citation for part 246 continues to read as
follows:
Authority: 42 U.S.C. 1786.
2. In Sec. 246.2, add new definitions of ``Electronic signature''
and ``Sign or signature'' in alphabetical order to read as follows:
Sec. 246.2 Definitions.
* * * * *
Electronic signature means an electronic sound, symbol, or process,
attached to or associated with an application or other record and
executed and or adopted by a person with the intent to sign the record.
* * * * *
Sign or signature means a handwritten signature on paper or an
electronic signature. If the State agency chooses to use electronic
signatures, the State agency must ensure the reliability and integrity
of the technology used and the security and confidentiality of
electronic signatures collected in accordance with sound management
practices and the confidentiality requirements in Sec. 246.26.
* * * * *
3. In Sec. 246.4:
a. Revise paragraphs (a)(11)(i) and (a)(11)(ii);
b. Add a sentence to the end of paragraph (a)(21); and
c. Add new paragraphs (a)(24), (a)(25), and (a)(26).
The revision and additions read as follows:
Sec. 246.4 State plan.
(a) * * *
(11) * * *
(i) Certification procedures, including:
(A) a list of the specific nutritional risk criteria by priority
level which explains how a person's nutritional risk is determined;
(B) hematological data requirements including timeframes for the
collection of such data;
(C) the State agency's income guidelines for Program eligibility;
(D) adjustments to the participant priority system (see Sec.
246.7(e)(4)) to accommodate high-risk postpartum women or the addition
of Priority VII; and
(E) alternate language for the statement of rights and
responsibilities which is provided to applicants, parents, or
caretakers when applying for benefits as outlined in Sec. 246.7(i)(10)
and (j)(2)(i) through (j)(2)(iii). This alternate language must be
approved by FNS before it can be used in the required statement.
(ii) Methods for providing nutrition education to participants, and
criteria for deciding who will be offered individual care plans.
Nutrition education will include drug abuse information. Participants
will include homeless individuals.
* * * * *
(21) * * * The State agency will also describe its policy for
approving transportation of participants to and from WIC clinics.
* * * * *
(24) A list of all organizations with which the State agency or its
local agencies has executed or intends to execute a written agreement
pursuant to Sec. 246.26(h) authorizing the use and disclosure of
confidential applicant and participant information for non-WIC
purposes.
(25) The State agency's plan to prevent conflicts of interest at
the local agency or clinic level. At a minimum, this plan must address
situations in which local agency or clinic staff:
(i) are also WIC participants;
(ii) certify relatives or close friends; or
(iii) perform both certification and food instrument issuance
functions.
(26) The State agency's plan for collecting and maintaining
information on cases of participant and employee fraud and abuse. Such
information should include the nature of the fraud detected and the
associated dollar losses.
* * * * *
4. In Sec. 246.5:
a. Revise the first sentence of paragraph (c)(1) and remove the
last sentence; and
b. Revise paragraph (d)(2).
The revisions read as follows:
Sec. 246.5 Selection of local agencies.
* * * * *
(c) * * *
(1) The State agency will consider the Affirmative Action Plan (see
Sec. 246.4(a)(5)) when funding local agencies and expanding existing
operations, and may consider how much of the current need is being met
at each priority level. * * *
* * * * *
(d) * * *
(2) The State agency will, when seeking new local agencies, publish
a notice in the local media (unless it has received an application from
a local public or nonprofit private health agency which can provide
adequate services). The notice will include a brief explanation of the
Program, a description of the local agency priority system (outlined in
this paragraph (d)), and a request that potential local agencies notify
the State agency of their interest. In addition, the State agency will
contact all potential local agencies to make sure they are aware of the
opportunity to apply. If no agency submits an application in 30 days,
the State agency may then select a local agency in another area. If
sufficient funds are available, a State agency will give notice and
consider applications outside the local area at the same time.
* * * * *
5. In Sec. 246.7:
a. Revise the heading of paragraph (c) and revise paragraph (c)(1);
b. Redesignate paragraph (c)(2) as paragraph (c)(3) and add new
paragraphs (c)(2) and (c)(4);
c. Revise paragraph (d)(2)(iii);
d. Redesignate paragraph (d)(2)(iv)(C) as paragraph (d)(2)(iv)(D)
and add a new paragraph (d)(2)(iv)(C);
e. Revise paragraph (e)(1)(vi);
f. Revise paragraph (g)(1);
g. Revise paragraph (h);
h. Revise paragraph (i)(10) introductory text;
i. Revise paragraph (i)(11);
j. Revise paragraph (j)(2) introductory text;
k. Redesignate paragraph (l)(1) as paragraph (l) introductory text,
and remove paragraph (l)(2);
l. Redesignate paragraphs (l)(1)(i) through (l)(1)(iv) as (l)(1)
through (l)(4), respectively; and
m. Remove paragraph (m), and redesignate paragraphs (n), (o), (p),
and
[[Page 71788]]
(q) as paragraphs (m), (n), (o), and (p), respectively.
The revisions and additions read as follows:
Sec. 246.7 Certification of participants.
* * * * *
(c) Eligibility criteria and basic certification procedures. (1) To
qualify for the Program, infants, children, and pregnant, postpartum,
and breastfeeding women must:
(i) Reside within the jurisdiction of the State (except for Indian
State agencies). Indian State agencies may establish a similar
requirement. All State agencies may determine a service area for any
local agency, and may require that an applicant reside within the
service area. However, the State agency may not use length of residency
as an eligibility requirement.
(ii) Meet the income criteria specified in paragraph (d) of this
section.
(iii) Meet the nutritional risk criteria specified in paragraph (e)
of this section.
(2)(i) At certification, the State or local agency must require
each applicant to present proof of residency (i.e., location or address
where the applicant routinely lives or spends the night) and proof of
identity. The State or local agency must also check the identity of
participants, or in the case of infants or children, the identity of
the parent or guardian, or proxies when issuing food or food
instruments. The State agency may authorize the certification of
applicants when no proof of residency or identity exists (such as when
an applicant or an applicant's parent is a victim of theft, loss, or
disaster; a homeless individual; or a migrant farmworker). In these
cases, the State or local agency must require the applicant to confirm
in writing his/her residency or identity. Further, an individual
residing in a remote Indian or Native village or an individual served
by an Indian tribal organization and residing on a reservation or
pueblo may establish proof of residency by providing the State agency
their mailing address and the name of the remote Indian or Native
village.
(ii) The State agency may issue benefits to applicants who claim to
be pregnant (assuming that all other eligibility criteria are met) but
who do not have documented proof of pregnancy at the time of the
certification interview and determination. The State agency should then
allow a reasonable period of time, not to exceed 60 days, for the
applicant to provide the requested documentation. If such documentation
is not provided as requested, the woman can no longer be considered
categorically eligible, and the local agency would then be justified in
terminating the woman's WIC participation in the middle of a
certification period.
* * * * *
(4) The certification procedure shall be performed at no cost to
the applicant.
(d) * * *
(2) * * *
(iii) Use of a State or local health care definition of ``Income''.
If the State agency uses State or local free or reduced-price health
care income guidelines, it will ensure that the definitions of income
(see paragraph (d)(2)(ii) of this section), family (see Sec. 246.2)
and allowable exclusions from income (see paragraph (d)(2)(iv) of this
section) are used uniformly to determine an applicant's income
eligibility. This ensures that households with a gross income in excess
of 185 percent of the Federal income guidelines (see paragraph (d)(1)
of this section) are not eligible for Program benefits. The exception
to this requirement is persons who are also income eligible under other
programs (see paragraph (d)(2)(vi) of this section).
(iv) * * *
(C) Short term, unsecured loans that are expected to be repaid in a
reasonably short period of time, and to which the applicant does not
have constant or unlimited access.
* * * * *
(e) * * *
(1) * * *
(vi) Regression. A WIC participant who is reapplying for WIC
benefits may be considered to be at nutritional risk in the next
certification period if the competent professional authority determines
that his/her nutritional status will worsen (regress) without
supplemental foods. However, such participants may not be considered at
nutritional risk for this reason (regression) for more than one
certification period immediately following the initial certification.
Individuals who are certified based on the possibility of regression
should be placed either in the same priority for which they were
initially certified, or in Priority VII, if the State agency is using
that priority level.
* * * * *
(g) * * *
(1) Program benefits will be based upon certifications established
in accordance with the following timeframes:
------------------------------------------------------------------------
A/an: Will be certified:
------------------------------------------------------------------------
(i) Pregnant woman........... For the duration of her pregnancy, and up
to the last day of the month in which
the infant becomes six weeks old or the
pregnancy ends (for example, if the
infant is born June 4, six weeks after
birth would be July 16, and
certification would end July 31).
(ii) Postpartum woman........ Up to the last day of the sixth month
after the baby is born or the pregnancy
ends (postpartum).
(iii) Breastfeeding woman.... Approximately every six months ending
with the last day of the month in which
the infant turns 1 year old.
(iv) Infant.................. Approximately every six months. The State
agency may permit its local agencies to
certify infants under six months of age
up to the last day of the month in which
the infant turns 1 year old, provided
the quality and accessibility of health
care services are not diminished.
(v) Child.................... Approximately every sixth months ending
with the last day of the month in which
a child reaches his/her fifth birthday.
------------------------------------------------------------------------
* * * * *
(h) Mid-certification period disqualifications. Participants may be
disqualified from the Program during a certification period for:
(1) Income ineligibility. If the local agency finds out that an
individual's household income level has changed, the local agency will
reassess the individual's income eligibility during the current
certification period. The local agency will disqualify an individual
and any other household members currently receiving WIC benefits
determined ineligible based on the new information. However,
adjunctively-eligible WIC participants (as defined in paragraphs
(d)(2)(vi)(A) or (d)(2)(vi)(B) of this section) may not be disqualified
from the WIC Program solely because they, or certain family members, no
longer participate in one of
[[Page 71789]]
the other specified programs. The State agency will ensure that such
persons, and other household members currently receiving WIC benefits,
are disqualified during a certification period only after their income
eligibility has been reassessed based on the income screening
procedures used for applicants who are not adjunctively eligible.
(2) Other (optional) reasons. Local agencies may disqualify an
individual during a certification period for the following reasons:
(i) Failure to obtain food instruments or supplemental foods for
several consecutive months. Proof of such failure includes failure to
pick up supplemental foods or food instruments, nonreceipt of food
instruments (when mailed instruments are returned), or failure to have
an electronic benefit transfer card revalidated for purchase of
supplemental foods; or
(ii) If a State agency experiences funding shortages, it may be
necessary to discontinue Program benefits to some certified
participants. The State agency must explore alternatives (such as
elimination of new certifications) before taking such action. Reduction
of food benefit quantities for cost reasons is not an acceptable
alternative action. In discontinuing benefits, the State agency will
affect the least possible number of participants and those whose
nutritional and health status would be least impaired by the action.
When a State agency elects to discontinue benefits due to insufficient
funds, it will not enroll new participants during that period. The
State may discontinue benefits by:
(A) Disqualifying a group of participants; and/or
(B) Withholding benefits of a group with the expectation of
providing benefits again when funds are available.
(i) * * *
(10) A statement of the rights and obligations under the Program.
The statement must contain a signature space, and must be read by or to
the applicant, parent, or caretaker. It must contain the following
language or alternate language as approved by FNS (see Sec.
246.4(a)(11)(i)), and be signed by the applicant, parent, or caretaker
after the statement is read:
* * * * *
(11) If the State agency exercises the authority to use and
disclose confidential applicant and participant information for non-WIC
purposes pursuant to Sec. 246.26(d)(2), a statement that:
(i) Notifies applicants that the chief State health officer (or the
governing authority, in the case of an Indian State agency) may
authorize the use and disclosure of information about their
participation in the WIC Program for non-WIC purposes;
(ii) Must indicate that such information will be used by State and
local WIC agencies and public organizations only in the administration
of their programs that serve persons eligible for the WIC Program; and
(iii) Will be added to the statement required under paragraph
(i)(10) of this section. This statement must also indicate that such
information can be used by the recipient organizations only for the
following:
(A) To determine the eligibility of WIC applicants and participants
for programs administered by such organizations;
(B) To conduct outreach for such programs;
(C) To enhance the health, education, or well-being of WIC
applicants and participants currently enrolled in those programs;
(D) To streamline administrative procedures in order to minimize
burdens on participants and staff; and
(E) To assess and evaluate a State's health system in terms of
responsiveness to participants' health care needs and health care
outcomes.
(j) * * *
(2) At the time of certification, each Program participant, parent
or caretaker must read, or have read to him or her, the statement
provided in paragraph (i)(10) of this section (or an alternate
statement as approved by FNS). In addition, the following sentences (or
alternate sentences as approved by FNS) must be read:
* * * * *
6. In Sec. 246.9, revise paragraph (g) to read as follows:
Sec. 246.9 Fair hearing procedures for participants.
* * * * *
(g) Continuation of benefits. Participants who appeal the
termination of benefits within the period of time provided under
paragraph (e) of this section must continue to receive Program benefits
until the hearing official reaches a decision or the certification
period expires, whichever occurs first. This does not apply to
applicants denied benefits at initial certification, participants whose
certification period has expired or participants who become
categorically ineligible for benefits. Applicants who are denied
benefits at initial certification, or participants who become
categorically ineligible during a certification (or whose certification
period expires), may appeal the denial or termination, but must not
receive benefits while awaiting the hearing.
* * * * *
Sec. 246.12 [Amended]
7. In Sec. 246.12:
a. Amend paragraph (f)(2)(iv) by removing the words ``90 days''
wherever they appear and by adding in their place the words ``60
days''; and
b. Amend paragraph (q) by removing the words ``150 days'' and by
adding in their place the words ``120 days''.
8. In Sec. 246.14:
a. Add a new sentence at the beginning of paragraph (a)(2);
b. Amend the first sentence of paragraph (c)(7) by removing the
word ``rural''; and
c. Revise paragraph (d).
The addition and revision read as follows:
Sec. 246.14 Program costs.
(a) * * *
(2) Program funds may not be used to pay for retroactive benefits.
* * *
* * * * *
(d) Costs allowable with approval. The costs of capital
expenditures exceeding the dollar threshold established in Agency
policy and guidance are allowable only with the approval of FNS prior
to the capital investment. These expenditures include the costs of
facilities, equipment (including medical equipment), automated data
processing (ADP) projects, other capital assets, and any repairs that
materially increase the value or useful life of such assets.
* * * * *
9. In Sec. 246.15, revise the first sentence of paragraph (b) to
read as follows:
Sec. 246.15 Program income other than grants.
* * * * *
(b) Other Program income. The State agency may use current program
income (applied in accordance with the addition method described in
Sec. 3016.25(g)(2) of this title) for costs incurred in the current
fiscal year and, with the approval of FNS, for costs incurred in
previous years or subsequent fiscal years. * * *
Sec. 246.17 [Amended]
10. In Sec. 246.17, remove the words ``150 days'' in paragraph
(b)(2), and add in their place the words ``120 days''.
11. In Sec. 246.20:
a. Revise paragraph (b)(1); and
b. Remove paragraph (b)(2), and redesignate paragraph (b)(3) as
paragraph (b)(2).
The revision reads as follows:
[[Page 71790]]
Sec. 246.20 Audits.
* * * * *
(b) * * * (1) State agencies must obtain annual audits in
accordance with part 3052 of this title. In addition, States must
require local agencies under their jurisdiction to obtain audits in
accordance with part 3052 of this title.
* * * * *
12. In Sec. 246.25, revise paragraphs (a)(4), (b) and (c) to read
as follows:
Sec. 246.25 Records and reports.
(a) * * *
(4) All records shall be available during normal business hours for
representatives of the Department and the Comptroller General of the
United States to inspect, audit, and copy. Any reports or other
documents resulting from the examination of such records that are
publicly released may not include confidential applicant or participant
information.
(b) Financial and participation reports.
(1) Monthly reports. (i) State agencies must submit financial and
program performance data on a monthly basis, as specified by FNS, to
support program management and funding decisions. Such information must
include, but may not be limited to:
(A) Actual and projected participation;
(B) Actual and projected food funds expenditures;
(C) A listing by source year of food and NSA funds available for
expenditure; and
(D) NSA expenditures.
(ii) State agencies must require local agencies to report such
financial and participation information as is necessary for the
efficient management of food and NSA funds expenditures. When
considered necessary and feasible by FNS, State agencies may be
required to:
(A) Show in the ``Remarks'' section of the WIC Financial Management
and Participation Report the amount of cash allowances exceeding three
days' need being held by their local agencies or contractors; and
(B) Provide short narrative explanations of actions taken by the
State agency to reduce such excess balances.
(2) Annual reports. (i) Every year, State agencies must report to
FNS the average number of migrant farmworker household members
participating in the Program during a 12-month period of time specified
by FNS.
(ii) State agencies must submit itemized NSA expenditure reports
annually as an addendum to their WIC Program closeout reports, as
required by Sec. 246.17(b)(2).
(3) Biennial reports. (i) Participant characteristics report. State
and local agencies must provide such information as may be required by
FNS to provide a biennial participant characteristics report to
Congress. This includes, at a minimum, information on income and
nutritional risk characteristics of participants, information on
breastfeeding incidence and duration, and participation in the Program
by category (i.e., pregnant, breastfeeding and postpartum women,
infants and children) within each priority level (as established in
Sec. 246.7(e)(4)) and by migrant farmworker households.
(ii) Civil rights report. Racial and ethnic participation data
contained in the participant characteristics report that is submitted
biennially to Congress will also be used to fulfill civil rights
reporting requirements.
(c) Other reports. State agencies must submit reports to reflect
additions and deletions of local agencies administering the WIC Program
and local agency address changes as these events occur.
* * * * *
13. In Sec. 246.26, revise paragraphs (d) and (g) and add new
paragraphs (h) and (i) to read as follows:
Sec. 246.26 Other provisions.
* * * * *
(d) Confidentiality of applicant and participant information.
(1) WIC purposes. Confidential applicant and participant
information is any information about an applicant or participant
(whether it is obtained from the applicant or participant, another
source, or generated as a result of WIC application, certification, or
participation) that individually identifies those individuals and/or a
family member(s). Except as otherwise permitted by this section, the
State agency must restrict the use and disclosure of confidential
applicant and participant information to persons directly connected
with the administration or enforcement of the WIC Program whom the
State agency determines have a need to know the information for WIC
Program purposes. These persons may include personnel from its local
agencies and other WIC State and local agencies, persons under contract
with the State agency to perform research regarding the WIC Program,
and persons investigating or prosecuting WIC Program violations under
Federal, State or local law.
(2) Non-WIC purposes. (i) Use by WIC State and local agencies. Any
WIC State or local agency may use confidential applicant and
participant information in the administration of its other programs
that serve persons eligible for the WIC Program in accordance with
paragraph (h) of this section.
(ii) Disclosure to public organizations. The State agency and its
local agencies may disclose confidential applicant and participant
information to public organizations for use in the administration of
their programs that serve persons eligible for the WIC Program in
accordance with paragraph (h) of this section.
(3) Child abuse and neglect reporting. Staff of the State agency
and its local agencies who are required by State law to report known or
suspected child abuse or neglect may disclose confidential applicant
and participant information to the extent necessary to comply with such
law.
(4) Release forms. Except in the case of subpoenas or search
warrants (see paragraph (i) of this section), the State agency and its
local agencies may disclose confidential applicant and participant
information to individuals or entities not listed in this section only
if the affected applicant or participant signs a release form
authorizing the disclosure and specifying the parties to which the
information may be disclosed. The State or local agency must permit
applicants and participants to refuse to sign the release form and must
notify the applicants and participants that signing the form is not a
condition of eligibility and refusing to sign the form will not affect
the applicant's or participant's application or participation in the
WIC Program. Release forms authorizing disclosure to private physicians
or other health care providers may be included as part of the WIC
application or certification process. All other requests for applicants
or participants to sign voluntary release forms must occur after the
application and certification process is completed.
(5) Access to information by applicants and participants. The State
or local agency must provide applicants and participants access to all
information they have provided to the WIC Program. In the case of an
applicant or participant who is an infant or child, the access may be
provided to the parent or guardian of the infant or child, assuming
that any issues regarding custody or guardianship have been settled.
However, the State or local agency need not provide the applicant or
participant (or the parent or guardian of an infant or child) access to
any other information in the file or record such as documentation of
income provided by third parties and staff assessments of the
participant's condition or behavior, unless required by Federal, State,
or local law or policy or unless the
[[Page 71791]]
information supports a State or local agency decision being appealed
pursuant to Sec. 246.9.
* * * * *
(g) USDA and the Comptroller General. The State agency must provide
the Department and the Comptroller General of the United States access
to all WIC Program records, including confidential vendor, applicant
and participant information, pursuant to Sec. 246.25(a)(4).
(h) Requirements for use and disclosure of confidential applicant
and participant information for non-WIC purposes. The State or local
agency must take the following steps before using or disclosing
confidential applicant or participant information for non-WIC purposes
pursuant to paragraph (d)(2) of this section.
(1) Designation by chief State health officer. The chief State
health officer (or, in the case of an Indian State agency, the
governing authority) must designate in writing the permitted non-WIC
uses of the information and the names of the organizations to which
such information may be disclosed.
(2) Notice to applicants and participants. The applicant or
participant must be notified either at the time of application (in
accordance with Sec. 246.7(i)(11)) or through a subsequent notice that
the chief State health officer (or, in the case of an Indian State
agency, the governing authority) may authorize the use and disclosure
of information about their participation in the WIC Program for non-WIC
purposes. This statement must also indicate that such information will
be used by State and local WIC agencies and public organizations only
in the administration of their programs that serve persons eligible for
the WIC Program.
(3) Written agreement and State plan. The State or local agency
disclosing the information must enter into a written agreement with the
other public organization or, in the case of a non-WIC use by a State
or local WIC agency, the unit of the State or local agency that will be
using the information. The State agency must also include in its State
plan, as specified in Sec. 246.4(a)(24), a list of all organizations
(including units of the State agency or local agencies) with which the
State agency or its local agencies has executed or intends to execute a
written agreement. The written agreement must:
(i) Specify that the receiving organization may use the
confidential applicant and participant information only for:
(A) Establishing the eligibility of WIC applicants or participants
for the programs that the organization administers;
(B) Conducting outreach to WIC applicants and participants for such
programs;
(C) Enhancing the health, education, or well-being of WIC
applicants or participants who are currently enrolled in such programs,
including the reporting of known or suspected child abuse or neglect
that is not otherwise required by State law;
(D) Streamlining administrative procedures in order to minimize
burdens on staff, applicants, or participants in either the receiving
program or the WIC Program; and/or
(E) Assessing and evaluating the responsiveness of a State's health
system to participants' health care needs and health care outcomes; and
(ii) Contain the receiving organization's assurance that it will
not use the information for any other purpose or disclose the
information to a third party.
(i) Subpoenas and search warrants. (1) General. The State agency
may disclose confidential applicant, participant, or vendor information
pursuant to a valid subpoena or search warrant only if it has been
reviewed in accordance with this paragraph (i).
(2) Subpoena procedures. In determining how to respond to a
subpoena duces tecum (i.e., a subpoena for documents) or other subpoena
for confidential information, the State or local agency must use the
following procedures:
(i) Upon receiving the subpoena, immediately notify its State
agency;
(ii) Consult with legal counsel for the State or local agency and
determine whether the information requested is in fact confidential and
prohibited by this section from being used or disclosed as stated in
the subpoena;
(iii) If the State or local agency determines that the information
is confidential and prohibited from being used or disclosed as stated
in the subpoena, attempt to quash the subpoena unless the State or
local agency determines that disclosing the confidential information is
in the best interest of the Program. The determination to disclose
confidential information without attempting to quash the subpoena
should be made only infrequently; and
(iv) If the State or local agency seeks to quash the subpoena or
decides that disclosing the confidential information is in the best
interest of the Program, inform the court or the receiving party that
this information is confidential and seek to limit the disclosure by:
(A) Providing only the specific information requested in the
subpoena and no other information; and
(B) Limiting to the greatest extent possible the public access to
the confidential information disclosed.
(3) Search warrant procedures. In responding to a search warrant
for confidential information, the State or local agency must use the
following procedures:
(i) Upon receiving the search warrant, immediately notify its State
agency;
(ii) Immediately notify legal counsel for the State or local
agency;
(iii) Comply with the search warrant; and
(iv) Inform the individual(s) serving the search warrant that the
information being sought is confidential and seek to limit the
disclosure by:
(A) Providing only the specific information requested in the search
warrant and no other information; and
(B) Limiting to the greatest extent possible the public access to
the confidential information disclosed.
14. In Sec. 246.27, paragraph (c) is revised to read as follows:
Sec. 246.27 Program information.
* * * * *
(c) Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee: U.S. Department of Agriculture,
FNS, Southeast Region, 61 Forsyth Street, SW., Room 8T36, Atlanta,
Georgia 30303.
* * * * *
Dated: November 22, 2002.
Roberto Salazar,
Administrator, Food and Nutrition Service.
[FR Doc. 02-30223 Filed 11-29-02; 8:45 am]
BILLING CODE 3410-30-P