Medicaid is Paying Millions for Salty, Fat-laden ‘Medically-tailored’ Cheeseburgers and Sandwiches

By  Nicholas Florko for Stat News. Originally published on July 11, 2024

WASHINGTON – They’re marketed as healthy, “dietitian-approved” meals and delivered directly to the homes of people seriously ill from cancer, diabetes, or heart disease: a Jimmy Dean frozen sausage breakfast sandwich, biscuits and gravy, a cheeseburger.

These are among the offerings sold by an Idaho-based company, Homestyle Direct, which is paid millions of dollars each year by taxpayer-funded state Medicaid programs to deliver what the company calls medically tailored meals. The company, which advertises delivering 7.8 million meals annually, has menus catering to customers trying to manage their cancer and diabetes, as well as “heart healthy” and “renal friendly” dishes.

However, multiple nutrition experts told STAT that many of Homestyle Direct’s offerings fall far short of what they’d consider medically tailored meals, a class of foods that have been proven to help those suffering from diet-related conditions improve their health and stay out of the hospital. Most also don’t appear to meet new voluntary accreditation standards crafted by medically-tailored meal providers.

“Homestyle Direct to me doesn’t look like medically tailored meals at all — it doesn’t even look like generally healthy meals,” said Dariush Mozaffarian, director of the Food is Medicine Institute at Tufts University.

The company’s ability to bill Medicaid for meals loaded with sodium and saturated fat — some of which could be bought in the grocery store at much lower cost — raises questions about federal and state oversight of meal delivery programs for people mostly confined to their homes, which are operated under a provision of the Medicaid program known as a Home and Community-Based Services waiver.

While there’s no universally accepted definition for a medically tailored meal, most nutrition experts say they should be low in certain ingredients like sodium, added sugar, and saturated fat, and high in others, like fiber. Many also expect these meals to be free of the additives, like the preservatives and stabilizers that typically lace unhealthy processed foods.

Homestyle Direct’s Jimmy Dean breakfast sandwich — offered as part of its diabetes menu — boasts 980 milligrams of sodium. The company’s cancer-support and diabetes-friendly biscuits and sausage gravy has more than half the sodium and saturated fat that experts recommend healthy adults consume in a single day. And its cheeseburger has roughly 50 ingredients — a tell-tale sign of so-called “ultra-processed” food. The cheeseburger is advertised as helping customers with cancer, diabetes, renal issues, and heart problems, despite the fact that consumption of ultra-processed foods has been associated with type 2 diabetes, heart disease-related mortality, and certain forms of cancer.

Homestyle Direct is just one of the for-profit companies that bill Medicaid programs for home-delivered meals. Magic Kitchen sells its own version of biscuits and gravy, with 1,110 milligrams of sodium and 12 grams of saturated fat. Another company, Mom’s Meals, sells a “cheeseburger soup” with pretzel bits, oatmeal cream pie, and milk that altogether has 930 milligrams of sodium and 12 grams of added sugar.

Jeff Barteau, CEO of Homestyle Direct, said the company follows state rules governing meals’ nutritional content and that the company strives “to balance nutritional guidelines with palatability and cultural preferences.”

“Our goal is to make medically tailored meals more widely available, especially to those living in food deserts or rural communities,” he wrote in a statement. “It’s important to note that there are currently no universal standards for medically tailored meals or specific standards for each disease category.”

The CEO of Magic Kitchen, Greg Miller, similarly said his company tries to “cater to as many different types of … diets and cultures that we can,” adding that the biscuits and gravy had been requested by several customers. That meal’s sodium content is higher than the majority of his company’s meals, he said, and it is not meant for people on a sodium-restricted diet.

Teresa Roof, a public relations manager for Mom’s Meals, said the company actually increased the calories and nutrients of its cheeseburger soup meal through offering sides so that it could meet certain Medicaid nutritional guidelines. “Sides help us ensure we are providing enough calories and nutrients to sustain adequate nutrition overall,” Roof said. “Healthy eating is all about balance.”

States set their own rules for Medicaid meal programs, and they often set very loose restrictions governing the nutritional content of the food. The states STAT queried only required that the meals sent to patients provide at least one-third of the nutrients that a person’s is supposed to consume in a day, which is known as the Dietary Reference Intake.

“It’s a place where we have lacked standards for more nutritionally sound food,” said Rachel Landauer, a clinical instructor at the Center for Health Law and Policy Innovation at Harvard Law School. She noted that these meal services were originally conceived to help people who might have difficulty leaving their homes access food, rather than to deliver meals meant to improve nutrition.

Advocates fear that companies like Homestyle Direct are attempting to take advantage of the growing Food is Medicine movement, which aims to better integrate healthy food into traditional health care.

Medically tailored meals have been primarily offered by nonprofit, community-based organizations since the services began in the 1980s to provide healthy meals to people dying of AIDS. That has begun to change, however, as Food is Medicine has become in vogue in Washington, gaining the backing of the Biden White House, as well as national organizations like the American Heart Association and the Rockefeller Foundation.

“There are many companies … now trying to rebrand their meals as medically tailored meals when they are not,” said Mozaffarian. “It’s a problem … It hurts the movement and more importantly it hurts the patients.”

Homestyle Direct’s rebrand as a medically tailored-meal provider appears to be relatively recent. Archives of the company’s website dating back more than two decades reveal it began claiming that it was selling medically tailored meals only in 2023.

The company began operating in 1997, and in its early years pitched itself primarily as a meal-delivery service for people with busy lives. “How many times have you come home at the end of a long day only to discover that nothing was planned for dinner and you are too tired to make it anyway?” the company’s homepage asked in 2001.

By 2009, Medicaid programs in six states were reimbursing the company for its meals. That number ballooned to 18 by 2018. And now, the company is reimbursed in 30 states.

With that expansion have come legal troubles. In 2009, Oregon kicked the company out of its Medicaid program because it sent patients frozen meals on a monthly basis, though Oregon’s program required meal providers to deliver hot meals on a daily basis. The company unsuccessfully appealed the decision up to the Oregon Supreme Court, arguing that the state unlawfully changed the program’s rules. In 2015, Homestyle Direct paid $357,000 to settle a federal lawsuit over claims the company billed Medicaid for desserts that were not covered by the program, shipped excess meals to patients to collect Medicaid checks, and even billed Medicaid for meals allegedly provided to patients who in fact were deceased.

The move into selling medically tailored meals coincided with a large investment in the company by the private equity firm Harkness Capital Partners in 2021. Harkness also invests in a school lunch company, a roofing provider, and a pump rental service company.

In a press release announcing the investment, the CEO of Homestyle Direct said that Harkness’ involvement would “provide capital and strategic operational resources … at an ideal time to support our rapid growth.”

Harkness Capital said in a statement that it is “committed to supporting companies that uphold high standards of quality and integrity” and that “since our investment in March 2021, HSD has demonstrated this commitment in serving Medicaid beneficiaries.”

Several of the leading Food is Medicine-focused nonprofits unveiled an accreditation program for medically tailored meal providers earlier this year in hopes of standardizing their quality. Many of Homestyle Direct’s offerings appear not to meet those standards.

The company, for example, offers fried foods, such as fried chicken, which the Food is Medicine Coalition’s standards consider unacceptable.

Those guidelines also suggest that medically tailored meals should typically have between 700 and 800 milligrams of sodium, depending on the condition being treated. Less than half of the meals offered by Homestyle Direct meet that target.

Several of the company’s meals also contain little to no fiber, which studies have correlated with heart health, and reduced risk of certain forms of cancer and all-cause mortality. Items on Homestyle Direct’s “heart friendly” menu contain an average of five grams of fiber per meal, according to STAT’s analysis. The accreditation standards recommend between 8 and 9 grams of fiber per meal for most diets.

Barteau, the CEO, told STAT the company offers “supplemental items for all Medicaid beneficiaries, including oatmeal or supplemental drinks that offer additional fiber, dairy, and vitamins.”

The head of the Food is Medicine Coalition declined to comment on the meals offered by companies, stating that the coalition would need to review more than just the nutritional content of the meals to determine if they met the criteria for accreditation.

Medicaid accounts for 98% of Homestyle Direct’s revenue, according to Barteau, though he wouldn’t say how much it takes in from the program, which is jointly funded by states and the federal government. STAT confirmed through public record requests to just three states that it is in the millions annually.

Oklahoma paid Homestyle Direct $6.2 million in 2023, and Idaho paid the company $1 million that year. South Carolina has paid the company $2.8 million so far this fiscal year.

The lax Medicaid standards for nutritional quality are likely a byproduct of how the program that pays for these meals was conceived, argued Landauer, the Harvard professor.

“It was really more about targeting folks who may be homebound and in jeopardy of being food insecure … less so on really ensuring adequate access to nutritious food,” she said. “It’s such an important point to be asking this question: Does that still serve us? Is that still where the focus should be? Or can we be striving for more than that?”

STAT asked several states that contract with Homestyle Direct whether they were concerned that vulnerable patients might purchase the companies’ meals thinking they are healthy. Officials in several states emphasized that the meals follow the legal standard, and that patients are free to choose the meals that fit their lifestyle.

“Oklahomans who receive home delivered meals through the … waiver program have choices as to who they select as a meal provider and the type of meal they choose,” said a spokesperson for Oklahoma Human Services, which contracts with Homestyle Direct.

Homestyle Direct advertises that it also contracts with private Medicare plans, however those contracts are not subject to public disclosure.

Customers can also purchase directly from Homestyle Direct for $9.95 each. That price is often much higher than patients would pay if they bought the same food at the grocery store. A Jimmy Dean breakfast sandwich, for example, costs $1.37 per sandwich at Walmart — though the Homestyle Direct meal also comes with diced sweet potatoes.

“Honestly for some of these, patients would be better just giving them a Healthy Choice frozen dinner,” said Jessica Peters, outpatient nutrition manager at Boston Medical Center Health System.

Barteau said the higher price for the meals incorporates “not just the cost of food, but also the comprehensive service of preparing, packaging, and shipping frozen meals directly to recipients’ doors across multiple states.”

He said the company utilizes a network of refrigerated long-haulers and FedEx hubs to maintain meal quality during shipping.

However, when STAT purchased several Homestyle Direct meals last month, the food arrived thawed and unsafe to eat.

Barteau said in a statement that the company follows state guidelines for meal quality, but that the issue of warm food being delivered “is highly unusual,” “not representative of our standard service,” and due to the fact that the company does not typically serve Massachusetts, where STAT is headquartered.

STAT’s coverage of chronic health issues is supported by a grant from Bloomberg Philanthropies. Our financial supporters are not involved in any decisions about our journalism.