Prado provides a standardized methodology to help food merchants calculate a compliant base price for medically tailored meals, using the most recent USDA food cost data. This ensures pricing aligns with HSA/FSA eligibility requirements when paired with a Letter of Medical Necessity (LMN).

Overview

• Prado’s methodology references official data from the U.S. Department of Agriculture (USDA): Cost of Food at Home, June 2025, released July 2025.
• The USDA updates this data monthly to reflect national food costs, and Prado reviews it annually to maintain compliance and accuracy.
• The base price represents the “normal cost” of a meal, which determines the portion of a medically tailored meal that qualifies as a medical expense for HSA/FSA reimbursement.

USDA Cost Data and Methodology

The USDA publishes monthly food cost data across four spending plans:

Prado uses the Moderate-Cost Plan as the benchmark, representing realistic, balanced nutrition for typical adult consumers.

USDA Moderate-Cost Plan (June 2025)

Calculation of Base Price

Based on the Moderate-Cost Plan for adults (19+):

• Average Monthly Cost: $343.63
• Average Weekly Cost: $79.30
• Per-Meal Cost: $3.78

This per-meal cost serves as the baseline for calculating HSA/FSA eligibility.

Example:

• Meal total price: $11.50
• USDA baseline: $3.78
• Eligible medical expense: $11.50 − $3.78 = $7.72

Only the portion of a meal’s cost exceeding the baseline may qualify as a medical expense under IRS Publication 502.

Application to Medical Meal Programs

• Ensures compliance with HSA/FSA requirements.
• Provides a transparent, standardized framework for meal pricing.
• Helps merchants clearly communicate medical eligibility of meals to customers.

Base Price Review Policy

• Prado reviews and updates its base-price methodology annually, following the USDA’s June release.
• If the adult Moderate-Cost Plan average changes by more than 5%, an interim update will be issued before the next scheduled review.
• All prior methodology versions are archived and retained for three years for auditing and compliance purposes.

Source

U.S. Department of Agriculture, Center for Nutrition Policy and Promotion. Cost of Food at Home at Four Levels, U.S. Average, June 2025.
USDA Food Plans – Monthly Reports

Disclaimer:

Prado provides this methodology as a framework for establishing compliant base prices for medically tailored meals. While the calculations are based on authoritative USDA data:

• Each merchant is responsible for verifying final pricing.
• Merchants must ensure compliance with IRS, HSA, and FSA requirements.