Calculating the Costs of Medicaid Food is Medicine (FIM) Interventions

Overview

Though the cost savings of FIM are becoming more evident, their use in evaluating health insurance cost-effectiveness is still in its early stages. This brief provides a framework and methodology for calculating and analyzing the cost-effectiveness and policy implications of FIM programs. Its goal is to help policymakers and advocates apply established actuarial methods to conduct balanced analyses of the predicted costs and potential savings from FIM programs by providing a step-by-step guide to using a spreadsheet calculator that will estimate a FIM program’s impact on Medicaid capitation rates. This calculator covers cost assumptions, including the target population and meal/box costs, highlights considerations for offsetting costs and improving Return on Investment (ROI), and details how to test the cost limits of proposed FIM programs.

 

Key Points:

• The FIM calculator assesses if a program’s cost is reasonable within the annual managed care budget, but it is not intended to formally evaluate first-year savings.
• Due to ongoing FIM grocery studies and other assumptions/limitations, the tool’s precision is limited; its main purpose is to guide program design and policy decisions.
• Despite limited detailed data, the calculator will enhance understanding of how FIM costs relate to broader healthcare costs.
• We include projected savings from eligible, but unenrolled, Medicaid members joining SNAP and WIC as part of wraparound services typically included in FIM programs.
• Focuses on predicting costs for FIM grocery programs delivered through In Lieu of Services (ILOS).

Look for this icon as you work through the calculator. Various tips are provided throughout the document to help you test different scenarios.