Marijuana Moment: Feds Detail Plan To Cover Up To $500 In Hemp CBD And THC Products For Medicare Patients Under Program Launching Next Week

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Patients enrolled in select federal health insurance programs could have up to $500 of hemp-derived products covered each year beginning as early as April 1, according to new details about the cannabis initiative that’s being implemented by the Centers for Medicare & Medicaid Services (CMS).

The CBD-focused plan will also allow a certain amount of THC in products, but the agency said the planned rules are subject to change if federal hemp policy changes, as is currently expected under a law set to take effect later this year.

President Donald Trump signed an executive order in December that calls on the attorney general to finalize a rule federally rescheduling marijuana that also contained components to “improve access” to full-spectrum CBD products. To that end, the CMS update posted on Friday details how certain of its “Innovation Center” models will facilitate a pilot program providing coverage to regulated, hemp-derived cannabidiol.

Participants would be required to ensure that CBD is sourced from “a legally compliant source and high-quality farm,” prepared as an oral solution and tested for cannabinoid content so that available products contain no more than 0.3 percent delta-9 THC by dry weight and up to 3 milligrams of total THC per serving.

CMS said that centers participating in one of three models that receive substance access Beneficiary Engagement Incentives (BEI) will be able to “consult with eligible beneficiaries about the possible use of eligible hemp products to improve symptom control.”

“Participants implementing this BEI may elect to furnish such hemp products up to $500 a year, per eligible beneficiary, subject to model requirements and safeguards,” it said, while emphasizing that Medicare “does not pay the participant for the products, and beneficiaries should not be asked to submit a Medicare claim for the product.”

The three eligible innovation center models are CMS’s ACO REACH Model, Enhancing Oncology Model and Long-term Enhance ACO Design (LEAD) Model. For the first two, participants can elect to utilize the BEI for CBD coverage starting on April 1. For LEAD participants, the start date is January 1, 2027.

Participating organizations under those models must first elect the substance access BEI and then produce a CMS implementation plan that describes “the specific eligible hemp product(s) and dosing information, the amount/frequency of distribution, beneficiary eligibility criteria, safeguards/oversight, and other requirements outlined in participation agreements.” Those plans would need to receive CMS approval before participants could offer cannabidiol coverage.

After initial details about the initiative were revealed last week, CMS faced questions about the potential impact of a law set to take effect in November that would redefine hemp in a way that would strictly limit the types of cannabis products that are currently permitted under the 2018 Farm Bill that Trump signed in his first term. That law expressly prohibits hemp derivatives containing more than 0.4 milligrams of total THC per container, which industry stakeholders say would effectively eradicate the consumable hemp market.

Here’s how CMS is defining hemp products allowed through its substance access BEI:

“Eligible hemp products are limited to federally legal hemp-derived products containing no more than 0.3 percent delta-9 THC and expressly excludes inhalable products, any products containing more than 3 mg per serving of tetrohydrocannabinols (such as delta-8-tetrahyrdocannabinol, delta-10-tetrahyrdocannabinol, and tetrahydrocannabinolic acid) in an orally administered form, and any products containing cannabinoids not naturally produced or capable of being produced by or in the cannabis plant during its cultivation.”

The agency acknowledged that its definition complies with the 2018 Farm Bill provisions and noted that its coverage plan “does not override the Controlled Substances Act or authorize Schedule I substances.”

“To be eligible, hemp products must also comply with applicable state and local laws,” CMS said, raising additional questions about potential regulatory complications as multiple states have proactively moved to restrict hemp product availability in anticipation of the pending federal policy change. “If the legal limits on hemp-derived products changes…CMS will adjust its definition in accordance with the law.”

CMS further explained that cannabinoid products “must be furnished and provided directly by a qualified physician affiliated with the participant organization, as specified by the model participation agreements,” and model participants “cannot instruct beneficiaries to purchase retail products and submit receipts for reimbursement under the BEI.”

To be approved to provide CBD coverage, model participants must 1) meet federal, state and local “production, quality and safety laws and other mandated standards,” 2) be sourced from legally compliant farms “consistent with 2018 Farm Bill hemp requirements” and 3) be tested for cannabinoid content, as well as “contaminants and microbial hazards.”

The new details about the rules for the CBD pilot program come weeks after a co-founder of the hemp company Charolette’s Web, which has been collaborating with CMS, said the agency had already finalized its plans for federal health insurance coverage of cannabidiol.

Bill Morachnick, CEO of Charlotte’s Web, said in a press release on Monday that they are “grateful for CMS’s thoughtful approach in expanding access and creating space for responsible, evidence‑based hemp wellness conversations in clinical settings.”

“This program aligns with our mission to advance safe, high‑quality, science‑backed hemp options for consumers, and we remain committed to supporting sensible legislation that protects patients and strengthens the integrity of our industry,” he said.

“The updated guidance from CMS represents an important step in strengthening how hemp-based options are considered within care settings,” Morachnick said in a separate statement. “By reinforcing a science-driven framework centered on safety, quality, and transparency, it creates a clearer path for responsible integration into patient care. We see this as meaningful progress toward expanding access to trusted, non-intoxicating hemp solutions in a way that aligns with both clinical standards and patient needs.”

CMS Administrator Mehmet Oz 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.”

As previously described by the administrator, the plan would involved 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.

In its latest update, CMS said patients with disqualifying conditions under the Innovation Center models, as well as those who are pregnant or breastfeeding, could not receive CBD. They must also be at least 18 years old to participate.

At the signing ceremony for the marijuana and hemp executive order Trump signed in December, Oz also gave kudos to Howard Kessler, founder of The Commonwealth Project, which produced a video about the benefits of cannabidiol for seniors that the president shared on Truth Social last year and who apparently has pressed Trump 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.

Meanwhile, Oz took a different tone last month when he warned that “there are going to be consequences” as more Americans choose marijuana over alcohol—including problems caused by “high-dose hemp and CBD.”

In the background, the U.S. Department of Health and Human Services (HHS) and FDA recently submitted proposed regulations concerning CBD enforcement and compliance with the White House Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA). There’s been speculation that the rule could be related to the CMS pilot program, but that hasn’t been confirmed. And it’s also possible the proposal is linked to an unrelated FDA mandate from Congress to produce a list of known cannabinoids ahead of the federal hemp redefinition.

With respect to the marijuana components of Trump’s executive order, Attorney General Pam Bondi was directed to expeditiously finalize a proposal to move cannabis from Schedule to Schedule III of the CSA, which would not federally legalize it but would remove certain research barriers and let state-licensed marijuana businesses take federal tax deductions they’re currently barred from under an Internal Revenue Service (IRS) code known as 280E. That rescheduling proposal remains pending, however.

The post Feds Detail Plan To Cover Up To $500 In Hemp CBD And THC Products For Medicare Patients Under Program Launching Next Week appeared first on Marijuana Moment.

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