12VAC5-195-340. Competitive pricing.

A. Authorized retailers and applicants shall submit pricing information to the state agency. Item pricing data is obtained from authorized retailers and applicants using prices that have been entered into a WIC-approved Internet-based application.

B. The state agency shall collect pricing information for specific food items at least twice a year (7 CFR 246.12). Prices may be collected more frequently from authorized retailers for reasons including:

1. A retailer's prices are determined to be noncompetitive;

2. A retailer is designated as a high-risk retailer;

3. An administrative review is being conducted as part of a compliance investigation, onsite monitoring visit, participant access analysis, inventory audit, or post payment analysis; or

4. Other operational considerations that may occur including a change of contract formula company, a change of infant food company, food industry price fluctuations, and manufacturer's price increases for selected WIC-approved products, such as baby foods, contract formula, and infant cereal.

C. Retailers and applicants must submit the highest shelf price for all mandatory foods and formula brands, unless stated otherwise, that are available and eligible to be sold to participants. For milk items only, retailers must submit the price for their WIC designated brand. All prices submitted via the Internet-based application shall be used for calculating the reimbursement maximums. Retailers must use the approved food list and the minimum stocking requirement to identify all eligible brands and foods.

D. Retailers failing to submit their prices within 14 days of the due date stated in the retailer manual shall receive one warning letter. After receiving the letter, retailers that fail to respond within the time period stated in the letter may have their WIC Program authorization terminated unless the state agency determines that inadequate participant access would exist if the retailer's authorization were terminated.

E. Applicants whose prices are determined to be noncompetitive when compared with other authorized retailers in the same peer group shall be denied WIC Program authorization. These applicants shall not be given a second opportunity to resubmit their prices unless the state agency determines that inadequate participant access would exist if the application was not considered.

F. Authorized retailers whose prices are determined to be noncompetitive when compared with other retailers assigned to the same peer group shall be given one opportunity to resubmit their prices. After analyzing the prices submitted from this second submission, the state agency shall determine if the retailer qualifies to remain authorized. The state agency shall terminate the retailer's authorization if its prices are noncompetitive unless the state agency determines that inadequate participant access would exist if the retailer's authorization were terminated.

G. The applicant's physical retailer address shall be classified as being located either in an urban or rural location based on the county or city where the retailer is located. Retailer applicants located outside of Virginia shall be assigned to the rural category.

Rural Areas¹

Cities:
Norton, Suffolk

Counties:
Accomack, Albemarle, Alleghany, Amelia, Amherst, Appomattox, Augusta, Bath, Bedford, Bland, Botetourt, Brunswick, Buchanan, Buckingham, Campbell, Caroline, Carroll, Charles City, Charlotte, Clarke, Craig, Culpeper, Cumberland, Dickenson, Dinwiddie, Essex, Fauquier, Floyd, Fluvanna, Franklin, Frederick, Giles, Gloucester, Goochland, Grayson, Greene, Greensville, Halifax, Hanover, Henry, Highland, Isle of Wight, King and Queen, King George, King William, Lancaster, Lee, Louisa, Lunenburg, Madison, Mathews, Mecklenburg, Middlesex, Montgomery, Nelson, New Kent, Northampton, Northumberland, Nottoway, Orange, Page, Patrick, Powhatan, Pittsylvania, Prince Edward, Prince George, Pulaski, Rappahannock, Richmond, Rockbridge, Rockingham, Russell, Scott, Shenandoah, Smyth, Southampton, Spotsylvania, Surry, Sussex, Tazewell, Warren, Washington, Westmoreland, Wise, Wythe

Urban Areas¹

Cities:
Alexandria, Bedford, Bristol, Buena Vista, Charlottesville, Chesapeake, Clifton Forge, Colonial Heights, Covington, Danville, Emporia, Fairfax, Falls Church, Franklin, Fredericksburg, Galax, Hampton, Harrisonburg, Hopewell, Lexington, Lynchburg, Manassas, Manassas Park, Martinsville, Newport News, Norfolk, Petersburg, Poquoson, Portsmouth, Radford, Richmond, Roanoke, Salem, Staunton, Virginia Beach, Waynesboro, Williamsburg, Winchester

Counties:
Arlington, Chesterfield, Fairfax, Henrico, James City, Loudoun, Prince William, Roanoke, Stafford, York

¹The state agency uses the Isserman model for determining what cities and counties are considered urban and rural settings. This model was created for the U.S. Department of Agriculture and was published in "In the National Interest: Defining Rural and Urban Correctly in Public Policy" (International Regional Science Review, 28, 4:465 - 499 (2005))

Authorized retailers are assigned to a peer group based on their designation of rural or urban and the number of cash registers located in the retailer. Peer groups are defined as follows:

Peer Group	Description	Location
06	Special formula contractor	Other
50	One to four cash registers	Rural
51	Five to nine cash registers	Rural and under $100,000 in annual WIC sales
52	Five to nine cash registers	Rural and over $100,000 in annual WIC sales
53	10 and above cash registers	Rural
60	One to four cash registers	Urban
61	Five to nine cash registers	Urban and under $100,000 in annual WIC sales
62	Five to nine cash registers	Urban and over $100,000 in annual WIC sales
63	10 and above cash registers	Urban

H. For newly authorized retailers and applicants, the peer group designation assigned during the first three months shall be determined by the retailer's location and number of cash registers. For the peer group designation of newly authorized retailers that have five to nine cash registers, the state agency shall assume the retailer had less than $100,000 in annual WIC sales.

I. All retailers that have five to nine cash registers shall have their WIC sales data calculated by the state agency every six months to determine if the retailer's annual WIC sales are projected to be under or over $100,000. If the retailer's WIC sales have changed, then the retailer's assigned peer group shall change to reflect its redemption status.

J. Retailers that increase or decrease the number of cash registers must notify the state agency in writing within 15 calendar days. An onsite visit may be conducted by the state agency to confirm the number of operational cash registers. Retailers that knowingly misrepresent the number of cash registers may have their authorization status terminated unless the state agency determines that inadequate participant access would exist if the retailer's authorization were terminated.

Statutory Authority

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

Historical Notes

Derived from Virginia Register Volume 24, Issue 19, eff. May 26, 2008; amended, Virginia Register Volume 25, Issue 22, eff. July 6, 2009; Volume 29, Issue 12, eff. March 13, 2013; Volume 35, Issue 22, eff. July 24, 2019.

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