There Is No Single Food Is Medicine Benefit. There Are Five Doors.

Before you ask what code to bill, figure out which reimbursement pathway you are standing in.

A food provider asks a simple question: “What code do we bill for a healthy food box?”

The instinct is to Google for a billing code. But the code is downstream of something more important. Who is paying, under what authority or contract, and through what transaction?

Food is Medicine (FIM) is not one benefit with one reimbursement model. Two organizations, often community-based organizations (CBOs), can deliver nearly identical food to nearly identical members while operating under completely different rules. One may bill a Medicaid managed care organization (MCO), another may invoice an intermediary, another may work under a direct payer contract, and still another may be grant-funded.

The service may look the same at the member’s door. The money does not move the same way.

A useful way to orient yourself is through one of five doors. These are not five official CMS categories. They are five practical pathways a food organization can use to fund FIM services, including programs addressing Health-Related Social Needs (HRSN).

Here, FIM is the umbrella term. “Food and nutrition services” refers to the specific services a program or payer may cover, such as medically tailored meals, food boxes, produce prescriptions or nutrition counseling. The five doors are a practical orientation tool, not a regulatory construct. The exact rules still depend on the state, payer, program and contract.

1 - Section 1115/HRSN

Section 1115 of the Social Security Act gives CMS authority to approve state demonstration projects that test approaches outside the standard Medicaid structure. Some states use that flexibility to address HRSN, including food and nutrition services such as medically tailored meals, food boxes or produce supports.

The important distinction is that an approved 1115 demonstration creates authority. It does not create a universal provider billing workflow. The state still has to decide who qualifies, which services are covered, who administers the program, how CBOs join the network and how payment moves.

That is why two states can both have food and nutrition services under 1115 authority and still look very different operationally. One may route services through MCOs. Another may use a regional network or program administrator. One may expect the CBO to submit a healthcare claim. Another may have the CBO submit an invoice while the payer or administrator handles Medicaid reporting behind the scenes.

What this means for the CBO: Do not stop at “the state has an 1115 waiver.” Identify who administers the food and nutrition benefit, how the CBO becomes eligible to participate, what transaction the program expects and who actually pays you.

1115 tells you where the authority came from. It does not tell you how the CBO gets paid.

2 - In Lieu of Services (LOS)

ILOS can look similar to an HRSN program from the member’s perspective, but the operating model is different. ILOS sits inside Medicaid managed care. A state may allow health plans to provide certain medically appropriate, cost-effective alternatives to services or settings otherwise covered by Medicaid.

Michigan makes the distinction easy to see. Michigan’s Medicaid Health Plans may offer nutrition-focused ILOS including medically tailored home-delivered meals, healthy home-delivered meals, healthy food packs and produce prescriptions. The state establishes the framework, but the individual health plan is central to how the benefit actually operates.

For a food organization, that means state approval is only the beginning. The CBO still needs to understand which plans offer the service, whether it must enroll as a Medicaid provider, how the plan contracts with providers, who can refer members, how eligibility and authorization are confirmed, what gets submitted for payment and what rate applies.

What this means for the CBO: The state creates the ILOS framework, but the health plan becomes the practical rulebook. “Michigan Medicaid” is not enough detail to design a billing workflow. You need the rules for the specific Michigan health plan.

With ILOS, the state creates the framework, but a health plan determines how the CBO actually participates.

3 - Medicaid Plan Direct/Value Add

This is one of the easiest doors to miss because it may not appear on a national map of state FIM benefits. An individual MCO can sometimes fund food and nutrition services for its own members even when the state has not created a broad statewide FIM benefit.

Texas provides a straightforward example. Blue Cross and Blue Shield of Texas offers Medicaid value-added services that include home-delivered fresh fruits and vegetables for some members and meal delivery for qualifying members after a hospital stay. The opportunity exists at the health plan level, not because Texas operates a broad food and nutrition HRSN benefit under its 1115 demonstration.

Philadelphia offers another version of the same idea. Jefferson Health Plans has a longstanding direct relationship with MANNA to provide medically tailored meals for qualifying Medicaid members. The plan defines the program and eligibility, providers refer members and the food organization delivers under the terms of its payer relationship.

What this means for the CBO: In this model, the contract is the rulebook. The service, eligible population, referral pathway, rate, documentation and billing method may all be defined by a health plan and may differ from other MCOs.

A state can look “inactive” on a Food is Medicine map while real payer-funded food programs are already operating inside it.

4 - Medicaid Advantage, Commercial Plans and Health Systems

The fourth door moves beyond Medicaid. Medicare Advantage plans, commercial insurers, health systems, accountable care organizations and other risk-bearing entities may decide that paying for food and nutrition services makes clinical or financial sense.

Medicare Advantage is a useful example because plans can offer supplemental benefits beyond original Medicare. Special Supplemental Benefits for the Chronically Ill (SSBCI) can include certain non-primarily health-related supports when they are expected to improve or maintain health or function. Food and produce benefits have been part of this landscape, subject to plan eligibility criteria and CMS requirements.

Commercial and health-system arrangements can be even more contract-driven. A payer might purchase twelve weeks of meals for a defined condition. A health system might fund food support for patients when it is financially responsible for outcomes. Another organization may pay for produce boxes, navigation or a broader package of services.

What this means for the CBO: Here the right question is often not “What Medicaid benefit covers this?” It is “What has this payer agreed to buy?” The contract may define eligibility, approval, service duration, rate, reporting and whether the CBO sends a claim, an invoice or another transaction.

Outside Medicaid, the contract often defines the benefit, the eligibility rules and the payment model.

5 - Grants, Pilots and Philanthropy

The fifth door is different from the first four. A grant is not healthcare reimbursement. I include it because this is where much of the Food is Medicine field started and because many organizations are now trying to move from grant-funded pilots into recurring healthcare payment.

That transition changes more than the source of revenue. A grant-funded program may know its budget before the first participant receives food. Healthcare reimbursement often reverses the cash-flow sequence. The organization identifies an eligible member, receives a referral or approval, delivers the service, documents what happened, submits the required transaction, waits for adjudication and only then gets paid.

That means individual eligibility suddenly matters to revenue. Documentation can become a condition of payment. A missed authorization can make a perfectly good delivery non-billable. A denial becomes an accounts receivable problem. Growth can increase the cash needed to operate before reimbursement catches up.

What this means for the CBO: Moving from Door 5 into Doors 1 through 4 is not simply a new funding stream. It is an operating-model change. Delivering food and operating successfully as a healthcare vendor are different capabilities.

Moving from grants to healthcare reimbursement changes more than who pays. It changes how the organization operates.

Same service. Different paths.

Imagine five organizations deliver a healthy food box on the same Tuesday. To the member, the service can look almost identical. Behind the scenes, each organization may be running a different revenue cycle.

One organization may invoice an administrator working under a state HRSN model. Another may submit a claim to a Medicaid MCO under ILOS. Another may bill a Medicaid plan under a direct contract. Another may submit a claim or invoice under a Medicare Advantage or commercial arrangement. A fifth may still operate under grant or pilot funding, where payment is not tied to individual healthcare claims at all.

That is why “What code do we bill?” is usually too early a question. The answer depends on the pathway first: who is paying, what benefit or contract applies, who decides the member qualifies and what transaction the payer expects. Once those pieces are clear, the billing code becomes much easier to answer.

Before you ask for the billing code, map the reimbursement pathway.

Start with seven questions: Who is buying the service? Under what program or contract? Who qualifies the member? Who refers or authorizes? What service is billable? What transaction is required? Only then ask what code, rate or documentation applies.

Sometimes the answer will eventually be a healthcare billing code. Sometimes it will be an invoice service code. Sometimes the CBO will never submit a healthcare claim at all. The correct answer only becomes obvious after the money path is clear.

FIM is becoming more integrated into healthcare, but it is not converging on one reimbursement model. The organizations that navigate it best will not be the ones that memorize the most billing codes. They will be the ones that can identify which door they are walking through and build the operating model around that pathway.

The seven questions to answer before you build the billing workflow

These questions sound simple, but together they expose most of the differences that matter operationally.

Sources and further reading

CMS: Health-Related Social Needs
Overview of Medicaid authorities states can use to address health-related social needs, including ILOS and Section 1115 demonstrations.

CMS: Section 1115 Demonstrations
Federal overview of Section 1115 demonstration authority and the flexibility it gives states to test Medicaid program approaches.

Michigan MDHHS: In Lieu of Services
Michigan's nutrition-focused Medicaid ILOS framework, including program information and provider implementation resources.

Blue Cross and Blue Shield of Texas: Medicaid Value-Added Services
Example of health plan-funded Medicaid value-added services, including food and meal supports offered outside a statewide FIM benefit.

Jefferson Health Plans: MANNA Referral Program
Example of a direct health plan partnership for medically tailored meals, including program eligibility and referral information.

CMS: Special Supplemental Benefits for the Chronically Ill (SSBCI)
Current Medicare Advantage policy and guardrails for SSBCI, including non-primarily health-related supplemental benefits.