COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss. Division of Administrative Law Appeals


Department of Public Health,

Petitioner

v. Docket No. PH-07-708

Rosa Supermarket, Inc., et al.,

Respondents


Appearance for Petitioner:

Madeline Piper, Esq.

Department of Public Health
250 Washington Street, 2nd floor
Boston, MA 02108

Appearance for Respondent:

Ethan Schaff, Esq.

3 Pearl Street, #3
Stoughton, MA 02072

Administrative Magistrate:

Maria A. Imparato, Esq.

DECISION

On September 5, 2007, the Department of Public Health issued a Notice of Termination of the WIC Vendor Agreement and Disqualification From the WIC Program/Right to Appeal to Rosa Supermarket, Inc. (WIC Vendor Number 0306), and T-Stop Market, Inc. (WIC Vendor Number 0308), their President, Jose R. Rosa, and their Manager, Yiriam Gonzalez. (Ex. 1)

The Respondents requested a hearing by letter of September 28, 2007. The hearing began on June 20, 2008. On that date, the parties entered into Stipulations in which the Respondents stipulated to "all of the facts enumerated and specified in the 'Notice of Termination of WIC Agreement and Disqualification from the WIC Program/Right of Appeal.'" I marked two exhibits. (Exs. 1 - 2) Post-hearing, I marked the WIC Vendor Agreement for Fiscal Years 2008-2009 as Exhibit 3.

The hearing did not go forward on June 20, 2008 because of a medical emergency involving Petitioner's counsel. The parties returned on September 23, 2008 when Mr. Schaff offered a closing argument on behalf of the Respondents.

The WIC program provides supplemental food, health care referrals and nutrition education to low income pregnant, breast-feeding and post-partum women, infants and children under the age of five. Each participant is given a food prescription to meet her specific needs. These prescriptions are WIC checks and may be spent at authorized stores known as WIC Vendors.

FINDINGS OF FACT

1. Jose R. Rosa is the President of both Rosa Supermarket, Inc., located at 430 Geneva Avenue, Dorchester, MA, and T-Stop Market, Inc., located at 481 Geneva Avenue, Dorchester, MA. (Ex. 1)

2. Yiriam Gonzalez is the Manager of both markets.

3. Both Rosa Supermarket, Inc. and T-Stop Market, Inc. are authorized WIC vendors. (Ex. 1)

4. The WIC Vendor Agreement requires the vendor, among other things, to: write on the WIC check a price no higher than the actual, current shelf price of an item actually purchased by the WIC shopper; not price WIC transactions by check type instead of pricing each check for the actual products purchased; comply with federal, state and local laws by affixing a price to any items offered for sale; fill in the WIC check price in the presence of the authorized WIC shopper after the authorized WIC shopper has countersigned the WIC check; and ensure that the authorized WIC shopper signs the WIC check only after the vendor personnel fills in the WIC check price. (Ex. 3, Vendor Agreement, sections 6, 9)

5. The Vendor Agreement sets forth a sanction policy for vendor non-compliance. Violations are classified in Classes I through IV. (Ex. 3, Vendor Agreement, p. 8; Appendix A, p. 21)

6. Class II violations include, among others, overcharging the WIC program by writing on the check an amount which is higher than the actual shelf price of the products actually purchased by the authorized WIC shopper and charging an authorized shopper or the WIC program a set price by check type instead of pricing each check for actual items purchased. (Ex. 3, pp. 21 - 22)

7. Vendors who commit a Class II violation shall be disqualified from the WIC program for three years. (Ex. 3, p. 21)

8. Class IV violations, also known as State Agency Violations, include, among others, violations of the Massachusetts WIC program regulations, violations of the Vendor Agreement, and irregularities in pricing and check acceptance and redemption. (Ex. 3, p. 23)

9. Vendors who commit a Class IV violation are assigned Sanction Points and may be disqualified depending on the cumulative value of the Sanction Points. Accumulation of twenty or more Sanction Points constitutes sufficient grounds to disqualify the vendor for one year. (Ex. 3, p. 23)

10. Where there are multiple violations in one investigation, the vendor shall be disqualified for the period corresponding to the most serious mandatory violation. (Ex. 3, p. 9)

11. The WIC program employs anonymous compliance buyers who go to WIC vendors with WIC checks to buy certain specified items to see whether the WIC vendor is in compliance with the Vendor Agreement. (Ex. 3, p. 9, fn. 5)

12. An anonymous compliance buyer visited Rosa Supermarket on June 22, 2007, June 29, 2007, July 19, 2007 and July 31, 2007, and made purchases. (Ex. 1)

13. For the checks used by the buyer in the compliance visit on June 22, 2007, the prices of authorized WIC food items actually purchased were $15.65 and $12.06 respectively. The vendor submitted these checks for payment with prices of $27.81 and $15.65 written in, resulting in a total overcharge of $15.75. (Stipulation, Ex. 1)

14. For the checks used by the buyer in the compliance visit on June 29, 2007, the prices of authorized WIC food items actually purchased were $15.65 and $11.66 respectively. The vendor submitted these checks for payment with prices of $27.81 and $15.65 written in, resulting in a total overcharge of $16.15. (Stipulation, Ex. 1)

15. For the checks used by the buyer in the compliance visit on July 19, 2007, the prices of authorized WIC food items actually purchased were $15.65 and $11.66 respectively. The vendor submitted these checks for payment with prices of $27.81 and $15.65 written in, resulting in a total overcharge of $16.15. (Stipulation, Ex. 1)

16. For the checks used by the buyer in the compliance visit on July 31, 2007, the prices of authorized WIC food items actually purchased were $15.65 and $9.06 respectively. The vendor submitted these checks for payment with prices of 27.81 and $15.65 written in, resulting in a total overcharge of $18.75. (Stipulation, Ex. 1)

17. On all four compliance visits, the vendor charged the compliance buyer a set price by check type instead of pricing each check for actual items purchased. All checks of one type were submitted for payment with $27.81 written in the amount, and all checks of another type were submitted with $15.65 written in the amount. The same amount was written on the checks regardless of what was actually purchased. (Stipulation, Ex. 1)

18. At the compliance visit of June 22, 2007, the vendor failed to affix the price to Deluxe cheese. At the compliance visit of July 31, 2007, the vendor failed to affix the price to Honey Bunches of Oats. The vendor accumulated 10 Sanction Points for each violation for a total of twenty Sanction Points. (Stipulation, Ex. 1)

19. On all four compliance visits, the vendor failed to fill in the WIC check price in the presence of the authorized WIC shopper after the authorized WIC shopper had obtained the WIC products and before the authorized WIC shopper has signed the WIC check. The vendor failed to ensure that the authorized WIC shopper signed the WIC check only after the Vendor personnel filled in the WIC check price. The vendor accumulated 10 Sanction Points for each violation for a total of forty Sanction Points. (Stipulation, Ex. 1)

20. The Vendor Agreement provides that the Massachusetts WIC program "shall pursue vendor disqualification as the most effective means to curtail vendor fraud, waste, and abuse to contain WIC food costs. The Massachusetts WIC Program shall consider civil monetary penalties in lieu of disqualification only as a last resort when there are no other means to provide adequate participant access." (Ex. 3, p. 11)

21. The Vendor Agreement provides that "[u]nder no circumstances shall the Massachusetts WIC Program consider the use of civil monetary penalties in lieu of disqualification in any of the following instances: … state sanction (See Appendix A: Class IV offenses)." (Ex. 3, p. 11)

CONCLUSION AND ORDER

The Department of Public Health has met its burden of proving that Rosa Supermarket, and its owner, Jose R. Rosa, and manager, Yiriam Gonzalez, violated the WIC Vendor Agreement with eight occurrences of Class II violations, and six occurrences of Class IV violations that resulted in the accrual of 60 Sanction Points. The Respondents are therefore disqualified from participating in the WIC program for three years. The disqualification of Jose R. Rosa from the WIC program results in the disqualification of Mr. Rosa's other store, the T-Stop Market.

Class II Violations

The Respondents committed Class II violations by writing on the WIC checks an amount that was higher than the actual shelf price of the products actually purchased by the compliance buyer at all four of the compliance visits. The Respondents committed Class II violations by charging the authorized compliance buyer a set price by check type rather than pricing each check for items actually purchased at all four of the compliance visits.

Class IV Violations

The Respondents committed Class IV violations on two occasions by failing to affix the purchase price on goods that were sold. The Respondents committed Class IV violations on four occasions by failing to fill in the WIC check price in the presence of the authorized WIC shopper after the authorized WIC shopper countersigned the WIC check, and failing to ensure that the authorized WIC shopper signed the WIC check only after the Vendor personnel filled in the WIC check price. The Class IV violations resulted in the accrual of a total of 60 Sanction Points.

According to the Vendor Agreement, accumulation of twenty or more Sanction Points shall constitute sufficient grounds to disqualify a Vendor for one year. A Class II violation shall result in disqualification from the WIC program for three years. Where there are multiple violations, the Vendor shall be disqualified for the period corresponding to the most serious mandatory violation. The Respondents shall therefore be disqualified from the WIC program for three years.

The Respondents argue that they are willing to pay a $10,000.00 fine rather than be disqualified from the WIC program. The Vendor Agreement, however, calls for use of civil monetary penalties in lieu of disqualification only as a last resort when there is no other means to provide adequate participant access. There has not been presented any evidence to demonstrate that there are no other means to provide participant access to the WIC program if this vendor is disqualified. Furthermore, the Vendor Agreement specifically prohibits the use of civil monetary penalties in lieu of disqualification where there have been Class IV violations. Because the instant Respondents have committed Class IV violations, civil monetary penalties are not a possible sanction.

The Respondents are disqualified from participation in the WIC program for three years.

SO ORDERED.

DIVISION OF ADMINISTRATIVE LAW APPEALS


/s/ Maria A. Imparato
Administrative Magistrate


DATED: 3/19/09