Medicaid Primary Payer for Exempt Infant Formulas and Medical Foods

This policy memorandum supersedes Reissue Final WIC Policy Memorandum #2001-6, Medicaid Primary Payer for Exempt Infant Formulas and Medical Foods. The purpose of this policy memorandum is to clarify the WIC regulatory requirement at 7 CFR 246.10(e)(3)(vi) that WIC state agencies must coordinate with the state Medicaid Program for the provision of exempt infant formulas and medical foods (i.e., WIC-eligible nutritionals, as defined by 7 CFR 246.2).

BACKGROUND

In September 2014, the U.S. Department of Agriculture, Office of Inspector General (OIG) issued Audit Report 27004-001-22 titled “State Agencies’ Food Costs for the Food and Nutrition Service’s Special Supplemental Nutrition Program for Women, Infants and Children.” The report included two recommendations regarding exempt infant formulas and medical foods:

1. In collaboration with the Department of Health and Human Services (HHS), clarify what coordination between WIC state agencies and Medicaid state offices means with regard to the provision of exempt infant formula and medical foods issued to mutual program participants. Record this clarification between HHS and the Food and Nutrition Service (FNS) in an appropriate decision document.
2. Provide technical assistance to WIC state agencies to assist in their coordination efforts, including sharing best practices from WIC state agencies that have successfully coordinated with Medicaid for the provision of exempt infant formula and medical foods.

WIC Food Package III provides exempt infant formulas and WIC-eligible nutritionals to infants, children and women participants who have a diagnosed medical condition that precludes or restricts the use of conventional foods. The provision of these products helps to prevent expensive health care costs, resulting in savings to health insurance providers, such as Medicaid.

Federal WIC regulations at 7 CFR 246.10(e)(3)(vi) require WIC state agencies to coordinate with federal, state or local government agencies or with private agencies that operate programs that also provide or could reimburse for exempt infant formulas and WIC-eligible nutritionals to mutual participants. At a minimum, the WIC state agency must coordinate with the state Medicaid program. The WIC state agency is responsible for providing up to the maximum amount of exempt infant formulas and WIC-eligible nutritionals under Food Package III in situations where reimbursement is not provided by another entity.

FNS Coordination with DHHS

In response to the OIG audit report, FNS held discussions with DHHS’ Centers for Medicare & Medicaid Services (CMS) on how to support state WIC and Medicaid programs collaboration efforts pertaining to the provision of exempt infant formula and medical foods to mutual program participants. During those discussions, CMS reaffirmed their role as the primary payer for exempt infant formulas and medical foods issued to WIC participants who are also Medicaid beneficiaries.

WIC state Agency Coordination with state Medicaid Counterparts Annually, WIC state agencies should contact their state Medicaid counterparts to determine coverage of exempt infant formulas and medical foods, and to work out the necessary details regarding referral or reimbursement procedures. WIC state agencies are expected to document the discussions with Medicaid in their administrative files. To assist WIC state agencies in their coordination efforts, the attached document, “Coordination with Medicaid - Helpful Tips for WIC state Agencies,” provides technical assistance as well as suggested coordination steps. The document was developed based on discussions with CMS and WIC state agencies that have been successful in communicating and establishing an agreement with their Medicaid counterparts.

Summary

The Medicaid program is the primary payer for exempt infant formulas and medical foods issued to WIC participants who are also Medicaid beneficiaries. Annually, WIC state agencies are expected to coordinate with their state Medicaid counterpart to ensure that the nutritional needs of mutual participants are met.

Please contact your respective FNS regional office for technical assistance or any questions regarding this memorandum or the attachment.

DEBRA R. WHITFORD
Director
Supplemental Food Programs Division