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Wisconsin WIC EBT Shared Delivery Assessment Deliverable

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Wisconsin WIC EBT Shared Delivery Assessment Deliverable Powered By Docstoc
					          Wisconsin WIC EBT

      Shared Delivery Assessment

            Deliverable 7.1.7



             January 4, 2010

               Version 1.1



              Prepared for:

      Department of Health Services
Bureau of Community and Health Promotion
   Nutrition and Physical Activity Section
               WIC Program
            1 West Wilson Street
            Madison, WI 53703


              Prepared by:
Deliverable 7.1.7                                                                                                     Shared Delivery Assessment




Table of Contents 
1     OVERVIEW OF THE SHARED DELIVERY ASSESSMENT ...............................................1 
2     APPROACH AND METHODOLOGY ...................................................................................2 
3     EVOLUTION OF CARD BENEFIT DELIVERY PROGRAMS ..............................................2 
   3.1     EBT Benefit Programs...................................................................................................2 
      3.1.1  Supplemental Nutrition Assistance Program (SNAP)............................................................................3 
      3.1.2  TANF.....................................................................................................................................................3 
      3.1.3  Other Cash Programs ...........................................................................................................................4 
      3.1.4  WIC .......................................................................................................................................................4 
   3.2     Branded Card Programs ...............................................................................................4 
   3.3     Co-Branded Card Programs..........................................................................................5 
   3.4     One Card Programs ......................................................................................................5 
   3.5     Single Platform Versus Single Card ..............................................................................6 
4     PRIMARY STAKEHOLDERS...............................................................................................6 
   4.1     Federal Government Role .............................................................................................7 
   4.2     State Role......................................................................................................................7 
   4.3     Potential Service Providers: EBT Processors and Financial Institutions......................7 
      4.3.1  EBT Providers .......................................................................................................................................7 
      4.3.2  EPC or Debit Card Providers ................................................................................................................8 
5     STATUS OF WISCONSIN’S CARD PROGRAMS...............................................................8 
   5.1     FoodShare Wisconsin ...................................................................................................8 
   5.2     ForwardHealth...............................................................................................................9 
   5.3     Child Support...............................................................................................................10 
   5.4     Unemployment Insurance ...........................................................................................12 
   5.5     WIC EBT .....................................................................................................................12 
   5.6     Child Care Time and Attendance ................................................................................13 
   5.7     Wisconsin Program Summary.....................................................................................13 
   5.8     Minnesota WIC EBT....................................................................................................14 
6     POTENTIAL FOR SHARED DELIVERY............................................................................15 
   6.1     Restricted Payment (Nutrition) Programs....................................................................16 
   6.2     Non-restricted Cash Programs....................................................................................18 
   6.3     Identification and Associated Applications ..................................................................18 
   6.4     Strategies Toward a One Card Solution......................................................................18 
      6.4.1  Executive Leadership..........................................................................................................................19 
      6.4.2  Lead Agency Designation ...................................................................................................................19 
      6.4.3  Establish a Cross-Agency Work Group...............................................................................................20 
      6.4.4  Develop Common Business and Operating Rules ..............................................................................20 
      6.4.5  Develop a Master Client Index ............................................................................................................21 
      6.4.6  Define the Procurement Approach ......................................................................................................21 
7     SUMMARY.........................................................................................................................22 
8     ACRONYMS ......................................................................................................................23 
9     APPENDIX A: US DEPARTMENT OF LABOR BEST PRACTICES FOR PAYMENT OF
UNEMPLOYMENT COMPENSATION BY DEBIT CARD ...........................................................23 




Wisconsin WIC EBT Feasibility                                                               -i -                                            January 4, 2010
Deliverable 7.1.7                                                 Shared Delivery Assessment




REVISION HISTORY
Date         Version            Description                           Author(s)
12/15/09    1.0               Initial draft of Shared Delivery        Owens, Glickman,
                              Assessment for submittal to State for   Melhem
                              review and comment.
01/04/10    1.1               Update references to MCI on pages       Owens
                              8, 12, 13, and 21. Change 2nd bullet
                              from “Child Care” to “Child Support”
                              on bottom of page 15.




Contact information: Cheryl Owens             cherylowens@imadgen.com

                       Margaret Melhem        margaretmelhem@imadgen.com

                       Gary Glickman          garyglickman@imadgen.com




Wisconsin WIC EBT Feasibility                       -ii-                      January 4, 2010
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1   Overview of the Shared Delivery Assessment

The implementation of electronic benefit transfer (EBT) in the 1990’s was revolutionary on
several levels. EBT enabled the co-issuance of Food Stamp and cash benefits by using one
payment instrument, simultaneously replacing paper Food Stamp coupons and Temporary
Assistance for Needy Families (TANF) checks. At the time other uses of the EBT card were
discussed, but for the most part technologies had yet to advance sufficiently to enable their
deployment and many programs, including the Special Supplemental Nutrition Program for
Women, Infants and Children (WIC), were labeled as the “Next Generation” of EBT. And while
EBT piggybacked on the existing debit/credit and automated teller machine (ATM) networks, in
its earliest stages many retailers, particularly grocers, were not yet accepting cards in-lane.

Wisconsin was one of the later states to deploy EBT for Food Stamps, joining
Minnesota in an EBT procurement in 1998, resulting in separate contracts with
Citibank for EBT services. Wisconsin subsequently piloted EBT for its Food
Stamp Program, titled FoodShare, in 1999 and implemented FoodShare EBT
statewide in 2000. Since that time additional Wisconsin agencies have         Figure 1: The Original
implemented other card programs, leveraging advances in technologies,         Wisconsin QUEST Card
specifically card-based applications and retail point-of-sale (POS) software,
and the cost savings of debit card programs. Wisconsin’s agencies now authorize card
issuance for:

    •     Electronic access to FoodShare benefits (EBT)
    •     Electronic access to pre-funded cash for child support (debit cards)
    •     Verification of eligibility for the state’s health care programs (ID cards)

Each of these programs uses a different vendor for card services and some of Wisconsin’s
citizens carry multiple cards as they receive services, payments, and/or benefits from multiple
programs. Additional Wisconsin programs are planning for card services. Workforce
Development will be issuing a request for proposals (RFP) in 2010 for debit card services to
support Unemployment Insurance (UI) payments and the Wisconsin WIC Program is
undertaking a Feasibility Study in preparation for WIC EBT. Child Care is also considering
issuing a card to use for child time and attendance tracking at subsidized child care facilities.

The prospect of current and future card programs, combined with the current economic climate,
raises the question of whether the state is achieving the maximum economies of scale, the
lowest costs, and the greatest convenience for its citizens by maintaining separate and distinct
contracts for card-based services. The technical and programmatic barriers of implementing
and maintaining a Wisconsin “One Card” solution, as well as the opportunities for sharing cards
and card platforms are the focus of this assessment.




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2     Approach and Methodology

This assessment was prepared by obtaining and analyzing information from multiple sources,
including:

      •    Interviews with applicable Wisconsin Programs
               o Interview with Ken Dybevik and Joan Jeglum of Wisconsin Health Care
                   Programs, October 29, 2009
               o Interview with Troy Sterr and Tom McHugh of Workforce Development,
                   November 10, 2009
               o Interview with Tim Burnett, Jim Jones and Paul Michael of the FoodShare
                   Program, November 9, 2009
      •    Interview with Betsy Clark, Director, and Carol Rowe, Operations, of the Minnesota WIC
           Program, December 1, 2009
      •    Review of Wisconsin agency materials and web-sites
      •    Review of best practices in multi-application cards deployed for state government
      •    Interviews with appropriate subject matter experts

3     Evolution of Card Benefit Delivery Programs

EBT enables the delivery of government benefits electronically using a plastic card to access
cash and food benefits at ATM and POS terminal locations. EBT was introduced in the 1980’s
as a replacement for Food Stamp coupons, checks and other paper benefit delivery processes.
In addition to increased convenience and dignity for beneficiaries, EBT reduces theft, fraud, and
abuse in benefits delivery because there are fewer steps in the issuance, redemption and
settlement processes, and patterns of abuse can be detected electronically. Growing out of
Vice President Gore’s National Performance Review, the Federal EBT Task Force was created
in November 1993 to serve as the catalyst for rapid implementation of nationwide EBT. In May
1994, Vice President Gore approved the EBT Task Force's report “From Paper to Electronics:
Creating a Benefit Delivery System That Works Better & Costs Less -- An Implementation Plan
for Nationwide EBT”. That plan provided a blueprint for the rapid implementation of EBT by
piggybacking on the growing commercial financial network and retail POS infrastructure and
today EBT is operational nationwide.

3.1       EBT Benefit Programs

In developing the plan for the rapid deployment of EBT, the Task Force conducted an
assessment of Federal benefit programs to determine which programs were well suited and
could benefit most from a conversion from paper to electronic benefit delivery. The assessment
focused on the following measures:

      •    Reduce the cost of benefit delivery for the government;
      •    Reduce the cost of participation for benefit recipients;
      •    Reduce fraud, waste and abuse; and
      •    Reduce the stigma of program participation.


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At that time, two programs emerged as primary candidates: The Supplemental Nutrition
Assistance Program (SNAP)1 and Aid to Families with Dependent Children later renamed
Temporary Assistance for Needy Families (TANF). Since then additional cash programs, and
more recently WIC, have been added to the EBT platform.

EBT services providers charge states on a cost per case per month (CPCM) basis for active
cases, separating the CPCM fees for food stamp, cash, combined food stamp and cash, and
WIC cases. Some states have elected to break out and pay separately some of the EBT
services and hardware, such as PIN terminals, card holograms, and live customer service.

3.1.1 Supplemental Nutrition Assistance Program (SNAP)

SNAP is a food assistance program administered at the Federal level by the Food and Nutrition
Service (FNS) of the U.S. Department of Agriculture (USDA). FNS sets national SNAP policies
and authorizes food retailers to deliver program benefits. FNS monitors retailer compliance and
investigates retailers suspected of fraudulent activities. SNAP provides food assistance to low-
income individuals and families. This program serves elderly or disabled households with
incomes at or below 165% of the Federal poverty level and all other households with incomes at
or below 130% of the Federal poverty Level. Although administered by FNS, the program is
operated by the states. States determine eligibility and authorize benefits. To maintain client
eligibility, the states operate eligibility certification systems. States are also charged with
investigating clients who are suspected of fraudulently obtaining benefits. The states and the
Federal agencies share the cost to administer the program, in most cases on a fifty-fifty basis.

3.1.2 TANF

TANF is the Federal primary cash assistance program and is administered by the Administration
for Children and Families (ACF), Department of Health and Human Services. The program is
funded by Federal block grants to the states that operate the program. States also contribute to
program funding. Again, the states determine eligibility, authorize benefits and operate state
eligibility certification systems. TANF is a program designed to enable states to aid needy
families with children through cash assistance. TANF provides benefits for low-income families.
Recipients are children under age 18, children under age 19 attending high school or GED
program full-time, parents or needy caretaker relatives of these children, unmarried teen parents
under the age of 18 and pregnant women with no other children. To be eligible for TANF the
family or assistance unit must include a child (or a pregnant woman with no other children) who
is in financial need. As block grants to states, TANF funds may be spent for program
management, administration, systems, cash benefits as well as non-cash services to promote
work and other program goals. As cash TANF benefits are unrestricted, ACF generally is not
prescriptive in how States to deliver cash benefits. Today, TANF benefits may be delivered by
check, warrant, direct deposit, EBT or a branded debit card.


1
 The 2008 Farm Bill changed the name of the Food Stamp Program to the Supplemental Nutrition
Assistance Program (SNAP)effective October 1, 2008




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3.1.3 Other Cash Programs

At the state level, both SNAP and TANF are commonly administered through the state’s social
service agency. These agencies also administer state funded benefit programs such as
General Assistance (GA), Refugee Assistance (RA), aid to the blind and disabled, child care,
energy assistance and other benefit programs. Since it is the state agencies that contract for
EBT services, many of the state cash benefits programs are included in the state’s EBT contract
for benefit delivery services.

3.1.4 WIC

Early on, the WIC Program was not considered a viable candidate for card based benefit
delivery. SNAP and cash benefits are in the form of a specific dollar and as specific dollar
benefits, SNAP and cash benefit transactions at the retail POS are essentially a financial
transaction and are authorized and settled in a manner similar to other electronic payment types
such as debit or credit. WIC benefits are not associated with a specific dollar amount but are
provided in the form of a food package or food prescription and the participant may purchase
only food items specified on the food instrument and the WIC Approved Product List (APL).
Approved food items, quantities and package size are specified in the food package. Because
of the nature of WIC food benefits, a WIC EBT redemption transaction is more complex than
SNAP or cash and is often considered the most complex transaction at the retail POS. Until
recently, POS technology was not robust enough to support a WIC transaction without timing
out. While there is considerable interest in WIC EBT, WIC EBT is operational in just six states.

3.2   Branded Card Programs

The most significant development in alternative EBT payment technologies for Federal and
state cash benefit programs is the branded debit card product often referred to as an electronic
payment card (EPC). The current branded debit card products have either the MasterCard or
VISA brand. Most branded debit card accounts are prefunded by the state at the time the
benefit is authorized. As consumer accounts, consumer privacy rules apply and states give up
their ability to track benefit redemptions. These accounts may also qualify for Regulation E
consumer protections and Federal Deposit Insurance Corporation (FDIC) insurance. At the
present time, a branded card product has not been approved for delivery of SNAP benefits.

Recently, many states have implemented branded debit card programs for one or more cash
benefit programs. Although the numbers are not great, the growing interest in branded debit
card programs for cash can be attributed, in large part, to the fact that these programs are being
provided at no cost to the states.

Since states generally prefund the branded debit card accounts, the monetary trade off for
states is between the interest that can be earned on funds held in state accounts until the day-
of-draw versus the elimination of EBT service fees. The other consideration for branded debit
cards is the cost to the benefit recipient. The branded debit card account typically provides two
free ATM transactions but generally comes with some combination of consumer-borne fees for
the following transaction types:


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Deliverable 7.1.7                                                        Shared Delivery Assessment




      •    ATM transaction
      •    Debit transaction at the POS2
      •    International transactions
      •    Balance inquiry
      •    Transaction decline
      •    Inactivity fee
      •    Card replacement

However, given the two (or more) free ATM transactions combined with free cash back provided
by many retailers and free withdrawals over the counter at banks, cash recipients with
appropriate training should be able to access their benefits using a branded debit card at little or
no cost.

3.3       Co-Branded Card Programs

There is justifiable confusion surrounding the definition of a co-branded card. The common
definition within the financial industry is a plastic card that displays the card association logo,
e.g. MasterCard or VISA, and the logo of a co-sponsor, such as an airline. Co-branded credit
cards typically incent customer use with rebates or loyalty credits. A similar card is the “affinity
card”, which displays the card association logo, and also the name of an organization that may
benefit from the card’s use. For example, universities often partner with a financial institution to
issue a card to alumni. The university receives credits from the financial institution based upon
usage and thus gives their alumni an incentive to use the card.

Within the EBT community, a co-branded card is a card that supports access to SNAP EBT
benefits and is also a pre-paid debit card that is used for cash benefits and payments. This
combination has the potential to provide efficiencies and reduce costs to the state while
enhancing access and convenience to the cardholder. For state benefit and payment programs,
a co-branded card will contain the card association brand (logo) and the Quest® brand, if the
state participates in Quest®.3

3.4       One Card Programs

Some states are seeking new innovations that result in the reduction of administrative burdens
on their employees and improving convenience for its citizens. In most states, individual
programs decide how payments are made to citizens, resulting in a variety of separately
managed payment methods including EBT, prepaid debit cards, vouchers, checks and warrants.


2
  There is evidence that many banks are no longer charging consumers a debit transaction fee at the
POS. A recent analysis by Bankrate.com indicates that only seven of 100 banks surveyed still charge a
fee for POS PIN based transactions. Check Card Survey 2007, Ellen Cannon, Bankrate.com.

3
 Quest® is the operating rules that support interoperability of SNAP and cash EBT transactions, allowing
participants to use their SNAP EBT card in any state.




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Many state executives understand that there may be savings available from eliminating paper-
based payment instruments and leveraging the economies of scale for electronic payments
across programs. States considering the consolidation of payment platforms question why each
program pursues separate methods – and contracts – to deliver payments to citizens, and they
question why their citizens are carrying multiple cards or are still enduring the inconvenience
and fees associated with using check cashers and money orders.

Consolidating payments on a single card can provide improved convenience for the cardholder.
These conveniences can include increased access to cash through branded pre-paid card
solutions, elimination of check cashing fees and fees to purchase money orders, elimination of
the need to remember multiple PINs to access multiple cards, decreased trips to ATMs or bank
locations to withdraw cash and the potential ability to leverage a larger bank balance for savings
or as collateral for small loans. Finally, holders of multiple cards may be confused by a lack of
consistent rules across programs. For example, one card may allow one free ATM withdrawal
while another may allow two or more. Furthermore, each card may be issued by a difference
institution that allows unlimited free ATM transactions at their ATMs. But, the cardholder is
responsible for remembering which ATM is free for which card and thus pays withdrawal fees
rather than travel from ATM to ATM. For all these reasons, a single card may provide an
avenue for fostering fiscal responsibility.

Conversely, many recipients of benefits from multiple government programs may want to
maintain separate accounts and cards for various purposes. For example, a recipient of
unemployment and TANF benefits may want to keep separate access to the funds to allow
multiple members of the household to shop for necessities while limiting their spending. They
may also have personal reasons for wanting separate accounts. In any event, mandating a
single card may limit an individual’s ability to manage their finances as they desire.

3.5    Single Platform Versus Single Card

An important consideration for policy makers is the distinction between a “single card” and a
“single card platform”. A single card implies that all benefits paid to a particular household or
individual will be accessed via a single card. This card may be a co-branded card or a pre-paid
card for those households not receiving SNAP benefits. Conversely, a single card platform
implies a single statewide contract to a card issuer/processor that can be used by any agency
within the state. Using this single card platform, each agency can elect to issue benefits to a
common card held by the beneficiary or a program-specific card depending upon the agency’s
and individual’s requirements. Use of a single card platform may allow the state to negotiate
more favorable terms with the card issuer and will help ensure consistency of service to
constituents across a wide range of programs.

4     Primary Stakeholders

There are three primary stakeholders associated with development, management and operation
of EBT or card based benefit delivery programs.




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4.1       Federal Government Role

Many benefit programs are funded wholly or partially by the federal government. The federal
government may also share in the cost to administer the program. In their oversight role,
federal agencies may set policies and maintain program regulations and often approve capital
expenditure and contracts for benefit delivery.

4.2       State Role

States operate benefit programs, determining eligibility and delivering benefits to a wide range
of constituents. State agencies delivering citizen benefits generally include social service,
health, labor, rehabilitation, and child welfare agencies. These agencies have specific program
missions and operate under federal and/or state regulations, including privacy rules that may
inhibit cross agency cooperation and operations. As a result, individual state agencies tend to
operate independent, stove pipe eligibility determination and benefit delivery systems.

4.3       Potential Service Providers: EBT Processors and Financial Institutions

Card benefit delivery service providers fall into to two types: EBT processors that support
SNAP, cash and WIC programs operated by social service agencies and financial institutions
that provide EPC services for the delivery of cash benefits including child support,
unemployment and other cash programs.

4.3.1 EBT Providers

Currently, there are three vendors providing the full range of EBT services. Each of these
providers has substantial EBT experience and has the financial stability that comes with multi-
billion dollar IT and financial services firms. The full service EBT providers include:

      •    ACS (Affiliated Computer Systems): With annual revenues of $5.7 billion, ACS is an
           IT services company listed on the New York Stock Exchange (NYSE). Based in Dallas,
           ACS employs about 58,000 people. ACS initially entered EBT providing retailer
           management services. ACS provides EBT services for SNAP and cash programs. ACS
           also has a time and attendance product for child care and a branded electronic payment
           card product. After developing their EPPIC™ platform to provide a full service EBT
           product, ACS began to aggressively pursue the EBT market share. Recently, ACS
           implemented an on-line WIC solution in Michigan.
      •    FIS/eFunds Corporation: With annual revenues of $550 million, eFunds is a financial
           and payment services company that was recently acquired by Fidelity National
           Information Services (NYSE:FIS), a $4.2 billion company. Based in Phoenix, Arizona,
           eFunds was one of the first companies to offer EBT services. The eFunds ebtEdge™
           platform supports SNAP and cash programs. eFunds also has a time and attendance
           product for child care and a branded electronic payment card product. eFunds operates
           the EBT Gateway switch. FIS is developing its WIC EBT application, expected to be
           complete in 2010.



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Deliverable 7.1.7                                                      Shared Delivery Assessment




      •    JPMorgan Chase: With annual revenues of $61.4 billon, JPMorgan Chase is a global
           financial services firm listed on the NYSE. JPMorgan Chase provides EBT Services
           through JPMorgan EFS based in Chicago, IL. Although, JPMorgan Chase has been the
           dominant provider of EBT services to States, the firm is experiencing increased
           competition from ACS and eFunds. JPMorgan EFS provides EBT Services for the Food
           Stamp and cash programs and has a branded electronic payment card, child care time
           and attendance and an on-line WIC product that has been implemented in Nevada as
           was in Michigan before the transition to ACS.
4.3.2 EPC or Debit Card Providers
Any financial institution that is authorized to issue MasterCard or VISA debit products can
support a state or Federal government EPC benefit delivery program. One of the largest
providers is Comerica, which is the provider for the US Department of the Treasury’s Direct
Express card and a number of state EPC programs.


5     Status of Wisconsin’s Card Programs

Wisconsin agencies manage, or are planning for, a number of card programs, each of which is
described below. It is noted that FoodShare Wisconsin, ForwardHealth and Child Care operate
within the same IT system (CARES) and share the Master Client Index (MCI). Participants in
Unemployment Insurance (Workforce Development), Child Support and WIC are not assigned a
MCI.

5.1       FoodShare Wisconsin

The Wisconsin QUEST card is used by FoodShare Wisconsin recipients for
the purchase of food items at authorized retail locations. FoodShare
benefits are post-funded, meaning funds are never held by the EBT
contractor or placed into a client’s account. Instead, the client account
contains the client’s ledger balance (benefit issued less benefit used) and the Figure 2: The Current
funds required to pay a retailer for a purchase transaction are drawn down      Wisconsin QUEST Card
from the Federal SNAP account during the end-of-day settlement process after the transaction
occurs.

The FoodShare EBT contract is held by Financial Information Systems (FIS, formerly eFunds).
The contract period is October 2007 through October 2013 with options for two two-year
renewals. FoodShare pays for EBT services on a cost per case per month (CPCM) basis, using
tiered pricing (the higher the caseload, the lower the CPCM). At its October 2009 level of
259,317 active cases, FoodShare pays $0.76 CPCM, which includes all services and hardware.
Hardware requirements include 95 PIN selection terminals at local offices and 1,101 EBT-only
POS terminals installed by FIS at authorized retailer locations. Because SNAP regulations
require that EBT transactions be conducted at no cost to the retailer, retailers have the option of
requesting state-deployed POS terminals to conduct EBT transactions.




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Deliverable 7.1.7                                                      Shared Delivery Assessment




The Wisconsin QUEST card meets the technical specifications (card size, magnetic stripe
encoding, etc.) necessary to conduct a transaction at a retailer POS. The reverse of the card
has a magnetic stripe and a signature stripe. The card is manufactured with minimal security
features, such as holograms or fine line printing, which are prevalent on credit and debit cards.
The card is issued over the counter at FoodShare offices, in which case it is not personalized,
meaning it only has the card number (PAN), not the client name, on the card obverse. If a card
is reported lost or stolen, it may be issued and mailed to the cardholder by FIS, in which case
the card is personalized with the cardholder’s name, as shown in Figure 2. FoodShare allows a
second card, for an alternate buyer, to be issued to a household at the request of the primary
cardholder. In October 2009 the program issued 23,239 cards; of these 13,747 were cards
issued to new clients, alternate buyers, etc., and 9,492 cards replaced lost, stolen and damaged
cards. FoodShare has elected not to charge clients for replacement cards.

As part of its contract, FIS provides 24x7 customer support via an automated voice response
(AVR) system and live customer service if required by the caller. Customer service is available
in English and Spanish.

5.2     ForwardHealth

ForwardHealth has a contract with Hewlett Packard4 (HP) to provide an identity and eligibility
card to Wisconsin citizens participating in a ForwardHealth program. The contract, which is for
five years with five one-year extensions, began November 10, 2008. ForwardHealth pays a flat
annual fee for system operations, including the card program, which now includes
approximately one million cardholders. The fee is shared proportionately by the programs using
the cards (Medicaid, SeniorCare, Wisconsin Well Woman, and Wisconsin Chronic Disease
Program). If additional programs are added to the system, HP assesses an additional $1.37 per
participant for the program’s initial card issuance. The cost of the software and hardware (card
swipe devices) required to read the card by a physician or pharmacy is born by the service
providers, not by the state.

All cards are personalized and are issued by mail from a facility in Indianapolis. Each eligible
family member is issued a separate card. As cards are not used for purchasing items or
services, they do not require a PIN, they are not branded (i.e., MC/VISA, QUEST), and do not
contain security features common to credit/debit cards.

There are four different cards being issued through ForwardHealth, each with a different design.
The card designs serve as visual cues for cardholders and service providers when verifying
program eligibility. All cards have a magnetic stripe and a signature stripe on the card reverse.
Cards include:




4
    The original contract was held by EDS. EDS was subsequently purchased by HP.




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Card Program                 Card Specifics
General card for Medicaid       •   Cards are issued after receipt of a file from Wisconsin’s Medicaid
Eligibility                         Management Information System (MMIS)
                                •   Customer service is provided by HP. HP customer service phone number
                                    for Wisconsin Medicaid is on the card reverse
                                •   Card is used as identifier by physician
                                         o May be swiped with a card swipe device
                                         o Alternately, the client’s name, the client ID and the card PAN
                                             may be entered into the state’s web-portal. The identifier is the
                                             unique Master Client Index (MCI) assigned to all participants in
                                             Wisconsin Department of Health Services Programs. The MCI
                                             and PAN are distinctly separate numbers.

SeniorCare                      •   Cards are issued after receipt of a file from Wisconsin CARES
                                •   Customer service is provided by HP. HP customer service phone number
                                    for SeniorCare is on the card reverse
                                •   Card is only a pharmaceutical eligibility card, used to submit claims at a
                                    pharmacy. As such, it meets the technical standards for a pharmacy card
                                •   Card is swiped at the pharmacy POS used to access pharmacy eligibility
                                    systems. By swiping the card, the pharmacist submits the claim and
                                    receives confirmation of authorization (or denial) in real-time.

Well Woman (Division of         •   Cards are issued after receiving a request from a local agency through a
Public Health)                      web portal. (No system interface or automated file transfers)
                                •   Customer service is provided by HP. HP customer service phone number
                                    for Well Woman is on the card reverse.
                                •   Card is used as identifier by physician
                                         o May be swiped with a card swipe device
                                         o Alternately, the client’s name, the client ID and the card PAN
                                             may be entered into the state’s web-portal.
                                •   Limited cardholders (approximately 16,000)

ForwardHealth Core              •   Cards are issued after receiving a request from a local agency through a
                                    web portal or by phone. (No system interface or automated file transfers)
(Wisconsin Chronic Disease      •   Customer service is provided by Automated Health Systems (AHS). AHS
Program)                            customer service number is on the card reverse.
                                •   Card is used as identifier by physician
                                         o May be swiped with a card swipe device
                                         o Alternately, the client’s name, the client ID and the card PAN
                                             may be entered into the state’s web-portal.
                                •   Limited cardholders (approximately 2,000)




5.3   Child Support

Since September 2007, the Wisconsin Child Support Program,
Department of Children and Families, has been providing Visa debit cards
                                                                                      Figure 3: The Wisconsin
and direct deposit services through a contract with JPMorgan Chase.                   Child Support Debit Card
Under this program, custodial parents (CPs) have the option of receiving



Wisconsin WIC EBT Feasibility                           -10-                              January 4, 2010
Deliverable 7.1.7                                                             Shared Delivery Assessment




child support payments through direct deposit to a bank or checking account of their choice and
at no cost to the CP or to receive a debit card from JPMorgan Chase and pay usage fees for
specific types of transactions. Regardless of the method for paying the CP, the program pays
an automated clearing house (ACH) fee to JPMorgan Chase for the electronic deposit of funds
to the banking, checking or debit card account. Child support is a pre-funded program, meaning
the funds are transferred to the CP, through JPMorgan Chase, upon receipt by the state. Both
the funds and the account are the property of the CP; they cannot be accessed by the state, nor
can the state obtain reports concerning the use of the funds.

As a Visa branded card, the card meets all financial payment industry standards and includes
the Visa brand, the PAN and the cardholder’s name on the obverse of the card and a magnetic
stripe and signature stripe on the card’s obverse, and JPMorgan Chase contact information.
The card is manufactured with security features common to the financial payment industry.
The personalized cards are never issued over the counter; they are mailed directly to the
cardholder’s home address and must be activated by the cardholder.

As applicable, recipients pay the following usage fees for debit card services:

                           Action                                                  Fee
Using the debit card to make purchases at stores or on-   No Fee
line
Making more than one cash withdrawals during a month      No fee for first cash withdrawal each month.
at any bank                                               $5.00 for each additional withdrawal during the month
                                                          Plus any fee charged by the bank.
Using a Chase ATM or an AllPoint ATM to get cash.         No Fee
Using a Chase ATM to check the balance.                   No Fee
Using another ATM for more than one cash withdrawal for   $1.50
each support payment deposited into the card account      Plus any fee charged by the ATM owner
Using another ATM, including AllPoint, to check the       $0.50
balance                                                   Plus any fee charged by the ATM owner
Having a transaction denied due to insufficient card      No fee for first 2 denials each month.
balance available three or more times a month             $1.00 fee for each additional denial each month
Having a monthly statement mailed to the cardholder       $0.75 each month
Replacing a lost card more than once                      $5.00
Check issuance                                            $12.50
Inactivity fee5                                           $ 1.50 per month

As its current contract ends in 2010, the Child Support Program is currently preparing an RFP
for a new contract for debit card and direct deposit services.




5
  A monthly fee is assessed on each a debit card account that has been inactive for 360 days. Account
inactivity is defined as no deposit, no withdrawal, and no purchase activity during this 360 day time
period.




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Deliverable 7.1.7                                                   Shared Delivery Assessment




5.4    Unemployment Insurance

The Unemployment Insurance (UI) program of Workforce Development is also in the process of
acquiring debit card and direct deposit services for providing UI funds to recipients. Under due
diligence, the program discussed a joint procurement of debit card services with the Child
Support Program and also met with JPMorgan Chase to discuss the structure of the state’s
current debit card contract. However, the U.S. Department of Labor has issued guidelines (see
Section 9, Appendix A) concerning debit card programs and they were determined by Workforce
Development to be incompatible with the Child Support debit card program. UI is open to
adding other state programs/agencies to its debit card contract.

UI anticipates issuing 192,000 debit cards under the new contract. The UI debit card will be
branded, and personalized, and will meet financial industry standards. Branding and customer
service information will depend on the selected vendor. The personalized card will be mailed
directly to the cardholder and will need to be activated by the cardholder. As with Child Support,
the account will be pre-funded; the funds and debit card account will be owned by the
cardholder.

UI does not use the CARES MCI as an identifier. It will transfer account set-up and account
issuance data via file transfer from the State UI Tax Enterprise System (SUITES).

5.5    WIC EBT

Wisconsin WIC EBT is in the planning phase, currently completing its Feasibility Study as
required by USDA/FNS. The WIC Program has several alternatives available for WIC EBT,
including:

      • Procuring WIC EBT services from a full-service WIC EBT provider. Current WIC EBT
        providers include JPMorgan Chase and Affiliated Computer Systems (ACS). FIS is
        developing a WIC EBT system, recently estimated by FIS to be 40% complete. All full-
        service WIC EBT vendors use on-line technologies, meaning their WIC EBT cards have
        a magnetic stripe that is swiped at the POS. If the WIC Program pursues this
        alternative, pricing will be a CPCM with additional fees for implementation, hardware
        (retailer POS, card swipe, and PIN selection devices), and service level agreements.
      • Transferring the on-line WIC EBT system from Kentucky and either maintain the system
        in-house or procure a contractor to host or maintain the system.
      • Transferring the off-line WIC EBT system from New Mexico or Wyoming and either
        maintain the system in-house or procure a contractor to host and maintain the system.
        An off-line system uses smart card (chip) technology, although most smart cards are
        issued with a magnetic stripe that may be used for other programs.

Wisconsin WIC services approximately 130,000 participants in 100,000 households. WIC EBT
aggregates household benefits into one account and issues one card per household. The future
WIC EBT card design will be determined by the WIC Program in cooperation with the WIC EBT



Wisconsin WIC EBT Feasibility                        -12-                        January 4, 2010
Deliverable 7.1.7                                                                   Shared Delivery Assessment




service or card provider. WIC EBT cards do not have to be personalized and are issued over-
the-counter.

While the specifications for Wisconsin WIC EBT have yet to be determined, as a cost saving
measure other states’ WIC EBT programs have chosen to limit customer services to normal
business hours or to referrals to local projects and clinics.

5.6    Child Care Time and Attendance

The use of a card for time and attendance tracking is still in the planning stage. It is assumed
that:

      • One card will be issued to each participating child
      • The card will not require any security features and may or may not be personalized
      • The card does not authorize any financial transactions, although payment of providers
        will be based on the time a child attends a child provider’s facility and therefore will be a
        result of the cards use.
      • The card and terminal vendor will not have to be associated with a financial institution to
        bid on the contract.

5.7    Wisconsin Program Summary
             FoodShare        Forward            Child              Un-               WIC EBT            Child Care
                              Health             Support            employment
                                                                    Insurance
Program      Benefit          Identity and       Pre-funded,        Pre-funded,       Benefit            Time and
Type         issuance of      eligibility        unrestricted       unrestricted      issuance of        attendance
             post-funded      verification;      cash               cash              post-funded
             and restricted   SeniorCare                                              and restricted
             benefits         card used to                                            benefits
                              initiate a claim
Card Type    EBT card         ID card, not       Debit card,        Debit card,       EBT card, not      Basic card
             branded by       banded, few        branded by         branding          branded, few       with a
             QUEST. Not       security           VISA,              undetermined,     visible security   magnetic
             personalized,    features,          personalized,      personalized,     features, may      stripe
             few security     SeniorCare         security           security          have chip.
             features         meets drug         features           features          (Chip has
                              card                                                    internal
                              specifications                                          security)
Master       Yes              Yes                No                 No                No                 Yes
Client
Index
Vendor       EBT processor    Medicaid           Financial          Financial         WIC EBT            Any time &
Type                          system, ID         issuing            issuing           processor or       attendance
                              card provider      authority          authority         transferred        vendor
                                                 (bank)             (bank)            system
Current      FIS              HP                 JPMorgan           TBD               TBD                TBD
Vendor                                           Chase




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Deliverable 7.1.7                                                               Shared Delivery Assessment




               FoodShare       Forward         Child              Un-               WIC EBT           Child Care
                               Health          Support            employment
                                                                  Insurance
Contract       Ends Oct        Start date      Current            TBD               TBD               TBD
Start/End      2013. Has 2-2   Nov. 2008. 5    contract ends
Dates          year optional   yr contract     2010.
               renewals        with 5 1-yr
                               options
Pricing        Cost per case   Fixed annual    ACH fee            ACH fee           Cost per case     TBD; Will
Structure      per month for   fee for broad   charged to         charged to        per month for     require T&A
               active cases    range of        program. All       program. All      active cases,     software,
                               services        other fees paid    other fees paid   additional fees   terminals
                                               by cardholder      by cardholder     per future        located at
                                                                                    pricing           providers and
                                                                                    schedule          cards




5.8       Minnesota WIC EBT

The Minnesota WIC Program was interviewed as part of this assessment to determine if there
are any opportunities to share card services with Wisconsin. Minnesota WIC is currently
planning for a new WIC management information system (MIS), due to be implemented
statewide in late 2010 or early 2011. As this is a complex undertaking, the WIC Program will
not begin planning for WIC EBT until the MIS implementation is complete and the system is at
steady state. In assessing each state’s WIC EBT positions, there were no immediate
opportunities identified for shared services. Barriers include the following:

      •    Each state has its unique list of authorized food products and WIC-authorized vendors
      •    Each state has different and unique WIC programs and WIC MIS systems. (Minnesota
           is deploying SPIRIT and Wisconsin operates with ROSIE)
      •    Unique program operations will parlay into considerable administrative efforts when
           deploying a shared service. A WIC EBT acquisition and deployment is difficult in and of
           itself and shared WIC EBT will result in additional levels of effort.
      •    Each state has different time frames for WIC EBT implementation. Wisconsin is now in
           the planning stage, while Minnesota will not begin planning until 2011, at the earliest.
      •    There is no precedent in either state that allows participants to cross state lines to use
           their paper food instruments.
      •    Minnesota has very strict data privacy laws, particularly in relation to health data.
           Sharing data with Wisconsin WIC staff would require significant changes in regulation
           and laws.




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6   Potential for Shared Delivery

The one card, a co-branded card solution, is still under development by card issuers and
providers, as is Wisconsin’s (and other states’) technical environments. Some of the technical
issues include the resolution of:

    •   Card issuance and management – how to determine if a card has already been issued
        through another state program and which program(s) has the authority to change
        cardholder demographic data
    •   Routing transactions at the POS – whether to route through the EBT or the
        MasterCard/VISA platforms)
    •   How to process purchases from different programs (FoodShare, WIC, cash) at the
        register, called “mixed basket”
    •   What is the “order of draw” – from which EBT or cash account should funds be drawn
        from
    •   How to settle disputes when benefits or cash are used from different programs for one
        purchase transaction
    •   Escheatment
    •   How to handle restricted cash programs, such as education supplements
    •   Level of reporting required and/or allowed for EBT and pre-funded cash programs

As EBT service providers and card issuers continue to work toward resolving many of these
issues, Wisconsin may also pursue a direction that will prepare the state for the future of sharing
services and card technologies.

Today, Wisconsin’s card-based programs fall into three specific categories:

    •   Restricted payment programs, including FoodShare EBT and WIC EBT
    •   Non-restricted cash programs including UI and Child Support
    •   Identification cards and their associated applications, including ForwardHealth and Child
        Care

The ability to deploy a one card solution for Wisconsin’s community of cardholders is not
practical at this time, as each of these three types of programs have specific technical
requirements that are not currently being met by a common service provider. As best practices,
the track for these programs to work toward a one card solution can be illustrated as follows:




Wisconsin WIC EBT Feasibility                        -15-                         January 4, 2010
Deliverable 7.1.7                                                     Shared Delivery Assessment




      1. Initial recommendations
              a. One EBT contract for restricted nutritional programs
              b. One MSA that can be used by all non-restricted cash programs to procure debit
                   card services
              c. Separate contracts for program-specific application and ID cards
      2. Future strategies
              a. Provide the leadership necessary to work toward a one card solution
              b. Promulgate the use of the MCI for all payment programs
              c. When opportune, pursue an MSA for a one card solution
              d. Look for opportunities to acquire cards or applications from the one card platform
                   at reduced costs.

This section discusses initial recommendations as well as the strategies that Wisconsin may
want to consider when planning for a future one card solution.

6.1     Restricted Payment (Nutrition) Programs

On a number of levels it is logical for FoodShare EBT and WIC EBT to share the same card
platform, meaning that the purchase of these services would fall under the same service
provider’s contract. Of the handful of states implementing or operating WIC EBT, Michigan,
Nevada, Oklahoma and the Chickasaw Nation have all negotiated contract amendments with
their SNAP EBT processors to deploy WIC EBT. The concept of one EBT service provider for
both programs is evolving into a best practice for the states. While sharing a card platform and
services, none of the above referenced WIC Programs share a card with SNAP EBT, and for
various technical and programmatic reasons, FNS has discouraged SNAP and WIC from
sharing a card at this time.

While the Wisconsin WIC Program is still considering alternatives to WIC EBT which include off-
line (smart card) technologies, for the purposes of discussing shared delivery a joint contract for
a shared platform and services is logical because:




Wisconsin WIC EBT Feasibility                         -16-                         January 4, 2010
Deliverable 7.1.7                                                            Shared Delivery Assessment




             •   The WIC Program and the FoodShare Program restrict benefits to either specific types
                 of items or specific items.
             •   Participants in the WIC Program and the FoodShare Program may only use their
                 benefits at specific (grocer/retailer) locations. In many cases grocers are authorized for
                 both WIC and FoodShare transactions.
             •   The FoodShare Program deploys EBT-only terminals in lane at some grocery locations
                 and WIC EBT may also deploy EBT-only terminals in-lane. If one processor is used, it is
                 possible to share EBT-only terminals and costs between programs while also reducing
                 the impacts on Wisconsin’s grocer community.
             •   If the WIC Program does pursue a full service provider for WIC EBT, its contract would
                 likely be with one of the three major SNAP EBT providers, ACS, JPMorgan Chase or
                 FIS.
             •   If the programs share a contract with one provider, economies of scale may favorably
                 impact the CPCM for each program.

Current schedules are also conducive to sharing a provider under one contract. The following
figure provides FoodShare and WIC EBT schedules at a high level. As seen below, FIS, the
current FoodShare EBT provider, expects to complete its WIC EBT application in 2010,
approximately the same period that will be used by the WIC Program to complete the planning
activities and documents required by FNS. Following its planning activities, the WIC Program
will need approval from FNS to pursue a negotiated contract, and additional time to negotiate
the WIC EBT contract with FIS.
FoodShare
   EBT
   WIC EBT
Procurement
   Joint




If a negotiated contract for WIC EBT is pursued, it will align the acquisition schedule of the two
programs and will allow joint acquisition for future FoodShare and WIC EBT services, leveraging
their combined caseloads and the shared retailer community to obtain more favorable CPCM
while at the same time saving resources and funds for the procurement process.




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6.2   Non-restricted Cash Programs

Child Support and Unemployment Insurance are currently pursuing separate RFPs for debit
card services. While the programs discussed a joint procurement, this did not happen; one
reason being the guidelines issued by the US Department of Labor concerning the fees that
may be assessed to cardholders for card services. Additional barriers include the different
originating agencies as well as the absence of an MCI that associates the cardholders at the
account level.

Wisconsin has other programs, including TANF, which are issuing benefits using checks,
vouchers or direct deposit. The use of paper checks comes at a cost; while the costs to the
state for debit card programs are minimal, usually consisting of the ACH fee assessed to
transfer funds into the cardholder’s account. From a cardholder’s perspective, the use of the
debit card provides relief from check casher fees while gaining access to funds at any retailer,
service provider, or ATM that bears the card’s logo, be it MasterCard or VISA.

By combining cash payment programs under one MSA for debit card services, Wisconsin may
be able to negotiate reduced fees for its client citizens, reduce the cost of individual
procurements by separate agencies, and provide the platform for paper-based payment
systems to move to electronic, card-based issued. In addition, the state may also implement a
common debit card fee structure so that cardholders will not have to remember which fees are
associated with which debit card.

6.3   Identification and Associated Applications

Identification cards and their associated applications are not currently under consideration for a
one card solution. The ForwardHealth card is an ID card; it does not have security features nor
does it initiate a financial transaction. The card is currently issued through the state’s medical
eligibility system managed by HP. While some states, such as South Dakota, have bid a
Medicaid eligibility card as part of an EBT contract, EBT services providers have had to include
a subcontractor with specific expertise to provide the Medicaid eligibility software. It is not a
candidate for a shared card solution.

Child care time and attendance is a specific application that uses a card and card reader
terminal located at a child provider’s location. Some EBT service providers do have time and
attendance software, which can be purchased as an add-on to an EBT contract. However, the
application does not require association with a financial institution. At its most basic, the card is
a piece of plastic with an identifier in the magnetic stripe; it does not require the security
features of a financial card nor does it authorize a financial transaction. In addition, time and
attendance software, cards and terminals may be provided by a myriad of providers, which may
provide a cost savings over a full service EBT provider.

6.4   Strategies Toward a One Card Solution

While card issuers and EBT service providers are working to resolve the technical and
programmatic issues surrounding a co-branded “one card” solution for states, Wisconsin can


Wisconsin WIC EBT Feasibility                          -18-                         January 4, 2010
Deliverable 7.1.7                                                     Shared Delivery Assessment




initiate strategies that will support a one card solution when it becomes a robust and viable
product.

6.4.1 Executive Leadership

One of the challenges of a one card solution is that it crosses organizational barriers that exist
within state governments. In Wisconsin as with many other states, programs within the large
Department of Health Services (DHS), such as FoodShare and WIC, are autonomous. These
programs have specific federal regulations and rules and policies that drive their every day
operations; a directed and focused constituency; a supporting infrastructure bound to their
needs; and, most importantly, have a funding stream that must be used to support their
chartered services. An even greater problem is that other programs that use card-based
services are not within DHS.

While the history of disparate agencies working together is not always encouraging, recent
efforts in service integration, generally promoted in states where the governor’s office has taken
an active role in seeking efficiency and better utilization of limited resources, has resulted in a
cross agency exploration of one card programs in some states and an active pursuit of a one
card program in Utah. Although there is cross-agency interest in the efficiencies that could be
gained from the promotion of a co-branded card product for multiple programs, it is often clear
that executive level leadership is essential in getting disparate programs and agencies to co-
operate in procuring these services. Executive leadership is required in several key areas: 1)
designation of a lead agency; 2) promotion of a governance structure and common business
rules; and 3) development of a front-end MCI.

6.4.2 Lead Agency Designation

In the states where progress is being made towards service integration and/or one-card or co-
branded card solutions, there is a project sponsor with overarching responsibility for some facet
impacting all of the participating agencies. Within a state, there are a couple of choices in
designating a lead agency.

Traditionally, social service agencies have experience and expertise in procuring and managing
card payment services. As mandated by the Federal government, SNAP benefits must be
delivered through an EBT magnetic stripe card and the Wisconsin FoodShare program has
many years of experience with electronic payments. The EBT office could be the source of
expertise for the co-branded card program and could consult with prospective user programs as
a means to facilitate their migration. Further, this office could provide centralized and shared
management of the co-branded solution, which would ultimately reduce the operational costs to
individual programs. Our research indicated that in states currently in the process of migrating
to a single card solution, the leadership role is often assumed by the EBT office located within
the social service agency.

The one drawback is that the social service agency does not have overarching authority over
other state departments and agencies and in the case of Wisconsin, EBT is not being used to
issue cash benefits to clients. An alternative is to designate an agency or office with


Wisconsin WIC EBT Feasibility                         -19-                         January 4, 2010
Deliverable 7.1.7                                                   Shared Delivery Assessment




overarching authority to control either state resources, such as the Comptroller’s Office or the
Treasury, or state technology, such as the state Chief Information Office (CIO). The drawback
is that the Comptroller/Treasury or CIO may not have the expertise in card payment services. In
either case, the lead agency must be invested with sufficient authority to effectively manage the
program.

The lead state agency is responsible for managing a common procurement vehicle that will
result in a statewide service level agreement that will be accessed by all state agencies with a
need for card payment services. To ensure success and widespread use, all state agencies
with a need for card payment services would be required to use the common card services
agreement. The lead agency will contract with or otherwise initiate interagency agreements or
memorandums of understanding with other agencies that wish to make use of the service.
There will also be a need to work out cost allocation methodologies and service agreements.

In Wisconsin, the lead agency may initiate a debit card MSA that can be used as a vehicle for
those agencies issuing cash benefits. Once a co-branded solution is available, the state may
choose to incorporate EBT services with the debit card program, creating a one card, co-
branded solution.

6.4.3 Establish a Cross-Agency Work Group

In order to ensure that the needs of all participating state agencies are met, a cross agency
work group should be established. The work group would assess when a co-branded card
solution is feasible and determine which programs would benefit from a one-card solution. After
a determination to go forward is made, the work group would develop the technical
requirements, develop common business and operating rules, determine the procurement
approach and oversee contract administration.

6.4.4 Develop Common Business and Operating Rules

Development of a common set of operating rules for all participating agencies is critical to the
success of the multi-agency, co-branded card program. We found in discussions with states
and EBT processors that it is oversimplified to assume that Regulation E and consumer owned
account regulations will automatically prevail in all cash programs as they are moved to prepaid
debit. States have practices, laws and regulations to which they must adhere. In some cases,
laws and regulation specifically address program requirements. Participating state agencies
should work jointly in developing common business rules for the management and execution of
the co-branded card program. The agencies would determine rules for things like draw
priorities, data sharing, benefit restrictions, error resolution, escheatment, consumer notices,
state access to account information and requirements for fair hearings. Development of
operating rules should be addressed prior to the procurement to avoid confusion in both an
administrative and combined customer service environment.




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Deliverable 7.1.7                                                      Shared Delivery Assessment




6.4.5    Develop a Master Client Index

As best practice, states indicated that the best method to identify clients across state agencies
is a Master Client Index (MCI). The MCI is a front-end enterprise information store of
demographic or other identifying information which presents a common view of clients served
based on feeds from contributing state agency systems. The MCI provides a base architecture
to create a common client identifier across state agencies while protecting client privacy. In
Wisconsin programs that use a common system, CARES, also utilize the MCI. To assist in the
future success of a one card solution, the state should investigate the expansion of the CARES
MCI to other agencies. Other states that are developing a front-end MCI expect to achieve the
following types of benefits:

        Supports a proactive approach to service integration;
        Provides states with a holistic view of clients and client services;
        Results in a single integrated front-end system with common ID;
        Identifies family relationships; and
        Helps prevent fraud abuse

6.4.6 Define the Procurement Approach

Procurements can be an expensive endeavor for states. To develop a vehicle for the
procurement of a co-branded card solution, there is a significant manpower investment to:

   •    Identify or develop a cross agency procurement vehicle;
   •    Define the technical and business requirements;
   •    Develop the Request for Proposal; and
   •    Evaluate responses.

However, if Wisconsin can avoid multiple procurements by issuing single, all-encompassing
cross agency procurement (MSA) for statewide payment card services, there will be both cost
and time savings for the state. A successful MSA should include the following benefits for
participating state agencies:

   • Provides a quick and simple method for a state program agency to acquire card payment
        services for their clients;
   • Includes the full range of card payment services including benefit authorization, benefit
        account maintenance, card production and issuance, call center services, settlement and
        reconciliation and reporting;
   • Allows the state program agencies to customize the offered services to address any
        special program needs it may have;
   • Results in cost savings as a result of lower procurement costs and economies of scale;
        and
   • Provides a viable method for sharing of costs and savings across programs.


Wisconsin WIC EBT Feasibility                          -21-                       January 4, 2010
Deliverable 7.1.7                                                    Shared Delivery Assessment




The MSA procurement will result in a single award to provide statewide card payment services.
However, it is recognized that the range of services required by the MSA is likely to result in
prime contractor/subcontractor agreements just as occur is EBT procurements today.

7   Summary

To summarize this assessment, there are three types of cards systems in planning or in use in
Wisconsin: EBT, prepaid debit, and identification systems. At the same time, the technical and
programmatic issues surrounding a one card solution have not been resolved by states or by
the EBT processors and card issuers.

If the state decides to move toward shared delivery, then, initially, the state may pursue a joint
contract for those programs requiring EBT, and an MSA for those programs requiring debit card
services. Other programs issuing identification cards, including ForwardHealth and Child Care,
should not be included in these contracts.

Wisconsin may also start planning for a future one card solution, a co-branded debit card
incorporating EBT and debit card technologies. At the time it pursues a one card solution,
Wisconsin may want to investigate the issuance of ID cards (medical, time and attendance, etc.)
from the one card contract but it is not certain whether this will result in any economic gains and
may result in adding unnecessary complications to a contract for payment services. It is
anticipated that a one card solution will:

    •   Support the business and program priorities of Wisconsin’s agencies using the single
        card platform;
    •   Streamline and simplify card service procurement under a single statewide card service
        agreement (master service agreement);
    •   Reduce or eliminate the cost of benefit delivery for cash programs and may reduce the
        cost of benefit delivery for non-cash programs;
    •   Provide wider access to clients who may use the card wherever the brand is accepted;
    •   Deliver benefits in a streamlined, integrated and coordinated approach; and
    •   Simplify the support of operations, so that the state’s technical infrastructure is managed
        efficiently and reliably.




Wisconsin WIC EBT Feasibility                         -22-                        January 4, 2010
Deliverable 7.1.7                                              Shared Delivery Assessment




8   Acronyms

Acronym        Definition
ACF            Administration for Children and Families
ACH            Automated Clearinghouse
ACS            Affiliated Computer Systems
APL            Approved Product List
ATM            Automated Teller Machine
AVR            Automated Voice Response
CIO            Chief Information Office
CP             Custodial Parent
CPCM           Cost per Case per Month
DHS            Department of Health Services
EBT            Electronic Benefit Transfer
FDIC           Federal Deposit Insurance Corporation
FIS            Fidelity National Information Services
GA             General Assistance
GED            General Equivalency Degree
HP             Hewlett Packard
ID             Identification
MC             MasterCard
MCI            Master Client Index
MMIS           Medicaid Management Information System
MSA            Master Services Agreement
NYSE           New York Stock Exchange
PAN            Personal Account Number
PIN            Personal Identification Number
POS            Point of Sale
RA             Refugee Assistance
RFP            Request for Proposals
SNAP           Special Nutrition Assistance Program
SUITES         State Unemployment Insurance Tax Enterprise System
TANF           Temporary Assistance for Needy Families
UI             Unemployment Insurance
WIC            Special Supplemental Nutrition Program for Women, Infants and Children




9   Appendix A: US Department of Labor Best Practices for Payment of
    Unemployment Compensation by Debit Card

See attached PDF file.




Wisconsin WIC EBT Feasibility                    -23-                       January 4, 2010

				
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