Marijuana Moment: Federal Agency Finalized Rule For CBD Medicare Coverage Pilot Program Weeks Ago, Key Hemp Stakeholder Says

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As cannabis industry stakeholders await action on a marijuana rescheduling proposal, the Centers for Medicare & Medicaid Services (CMS) has finalized a rule to provide federal health insurance coverage for CBD, according to an executive with a hemp company that’s been collaborating with the agency on the initiative.

President Donald Trump signed an executive order in December that directed the attorney general to quickly complete the process of moving marijuana from Schedule I to Schedule III of the Controlled Substances Act. While that component of the order made national headlines, another part of the administration’s cannabis plan announced on the same day concerned cannabidiol coverage through Medicare.

Mehmet Oz, administrator of CMS, spoke about the initiative at the signing ceremony for the order, crediting Trump and U.S. Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. for “pushing for change” and “relentlessly” pursuing an agenda rooted in a “deep passion for research.”

The plan has been to create a pilot program enabling eligible patients to access hemp-derived cannabidiol that’d be covered under federal health insurance plans, projected to launch by April, according to Oz.

Jared Stanley, co-founder of the cannabis company Charlotte’s Web, said on a webinar with other group of cannabis industry stakeholders this week that the rulemaking for CBD coverage that’s being spearheaded by the CMS Innovation Center was internally finalized about two weeks ago.

“This pilot will help the [Food and Drug Administration, or FDA] move from uncertainty into a practical framework with clear dosing, risk mitigation and clear manufacturing label expectations that end up rewarding the responsible companies and, in the end, protect and serve the consumer,” he said.

Stanley specifically said regulations for the CBD pilot program “were finalized two weeks ago, and we’re hoping and expecting an announcement from the regulatory authorities at some time coming if it’s launching in April.”

“As far as the population, it was important to note that it was stated in the briefing that this is starting in a pilot, but expecting to expand beyond just the pilot,” he said. “So that’s multiple indications that we expect to see. And we’re very excited. It has amazing potential.”

Asked about the status of the rulemaking, a CMS spokesperson directed Marijuana Moment to a webpage with an FAQ that describes the integration of hemp into a Beneficiary Engagement Incentive (BEI) program under the agency’s Long-term Enhanced ACO Design (LEAD) Model.

“The Substance Access BEI gives model participants the option of consulting with their patients about the possible use of eligible hemp products,” the CMS page says. “The implementation of this BEI and any related dispensing would be funded entirely at the participant’s expense; CMS would not cover the cost of such products. Further, CMS will have strict program integrity safeguards to ensure that these incentives do not result in program or patient abuse.”

“The Substance Access BEI is only available to participants in states where the eligible hemp products are considered legal,” it says.

While the broader rules on the CBD Medicare pilot program haven’t been publicized yet, CMS’s website briefly details how it’s navigating hemp-related issues as part of regulatory models under LEAD, the Accountable Care Organization (ACO) and the Enhancing Oncology Model (EOM).

Marijuana Moment reached out to Charolette’s Web for more details about the apparent finalization of CMS’s CBD rules, but representatives were not immediately available.

Oz, the CMS administrator, explained in December that the policy change will “allow millions of Americans on Medicare to become eligible to receive CBD as early as April of next year—and at no charge if their doctors recommend them.”

He added that Medicare Advantage insurers CMS has contacted are “also agreeing to consider CBD to be used for the 34 million Americans that they cover.”

One outstanding question concerns coverage eligibility. As described by the administrator in December, it would affect those 65 and older who qualify for Medicare, but the specific qualifying conditions weren’t detailed. There were repeated mentions of chronic pain, specifically related to cancer, but it’s possible the CBD eligibility criteria includes additional conditions.

At the signing ceremony, Oz also gave kudos to Howard Kessler, founder of The Commonwealth Project, which produced a video about the benefits of cannabidiol for seniors that Trump shared on Truth Social last year and who apparently has pressed the president to enact reform to expand cannabis access.

While CMS implemented an earlier final rule last April specifically stipulating that marijuana, as well as CBD that can be derived from federally legal hemp, are ineligible for coverage under its Medicare Advantage program and other services, the agency is now revising that policy.

CMS had already announced certain changes as part of a rulemaking process that was unveiled late last year, affecting “marketing and communications, drug coverage, enrollment processes, special needs plans, and other programmatic areas” for insurance programs it oversees. One of those changes dealt with cannabidiol coverage.

The rule as proposed would amend regulations, which currently state that any “cannabis products” cannot be covered. The policy would prevent coverage for only “cannabis products that are illegal under applicable state or federal law, including the Federal Food, Drug, and Cosmetic Act.” Since hemp and its derivatives like CBD are federally legal, the change suggests patients in states where such products are legal could make valid insurance claims to pay for the alternative treatment option, as long as the product is also federally legal.

Meanwhile, following the White House announcement in December, Oz spoke with NewsNation about the policy change, responding to a question about how the broader marijuana rescheduling decision squares with the Trump administration’s aggressive efforts to stymie the flow of other illicit drugs, particularly fentanyl.

“We think they fit hand in hand,” he said. “This is really about researching—specifically CBD, which is hemp-derived endocannabinoids [sic]—are actually worthy of Americans using them,” he said. “It’s hard to do some of this work, especially with medical marijuana. And this is not about legalization of marijuana.”

“There is no legalization language at all,” he added. “It’s about rescheduling this class of product so that it can be researched more readily.”

The idea that marijuana has no medical value, as its currently defined as a Schedule I drug, is “just patently wrong for marijuana,” he said, noting that the Food and Drug Administration (FDA) has approved certain cannabis-based drugs for conditions such as epilepsy “that work quite nicely.”

“That belief that it should be Schedule I is just an incorrect place to put it,” he said. “Schedule III seemed to make sense to the president. He argued that it allows us to do the research more readily.”

“We’re finding a way to allow Medicare beneficiaries to get access to some of these products. And so, within Medicare, we have the ability, for the first time ever—and we delivered on this promise to the president today—to allow doctors to recommend hemp-derived CBD for patients who have cancer, for example, and have a lot of pain from that.”

The administrator said surveys show a majority of seniors who take CBD for pain management find it beneficial, and the White House wants to “make it easier for patients to access this” and allow them to access the cannabinoid at “no charge” through the federal health insurance program.

In recent years, Oz has encouraged audiences to be open to therapeutic cannabis and advocated for sweeping policy changes around the drug.

“We ought to completely change our policy on marijuana. It absolutely works,” he said in a 2020 interview, calling cannabis “one of the most underused tools in America.”

In 2024, he wrote in a syndicated health column that there’s evidence cannabinoids can curb seizures, alleviate nausea associated with cancer treatment and potentially help manage pain—especially in older people.

Oz also said in 2020 that he believes that, particularly for seniors, marijuana for pain represents a “safer solution than, for example, narcotics in many cases.”

Photo courtesy of Kimzy Nanney.

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