Yesterday, the Trump Administration issued an Executive Order titled “Increasing Medical Marijuana and Cannabidiol Research” (the “EO”). It directs the Attorney General to expedite the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act, representing a significant step forward in recognizing the medical benefit of cannabis. Dentons issued a separate client alert discussing the implications of rescheduling marijuana here.
Notably, the EO also directs the HHS Secretary, FDA Commissioner, CMS Administrator, and Director of NIH to “develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products in accordance with Federal law and to inform standards of care.” During the signing ceremony, CMS Administrator Dr. Mehmet Oz provided additional crucial detail on how the agency may design a model that improves access to hemp-derived cannabinoid products. This alert summarizes Administrator Oz’s comments, which likely foreshadow future announcements from CMS and the Center for Medicare & Medicaid Innovation (the “Innovation Center”).
Medicare Does Not Currently Cover Hemp-Derived Cannabinoid Products
Administrator Oz highlighted that hemp-derived cannabinoid products are used to manage pain and provide relief from other common ailments that disproportionately impact seniors and veterans. He noted that the current statutory and regulatory frameworks governing hemp-derived cannabinoid products leave doctors and patients without adequate guidance on how to safely use these products. And he explained that the 68 million Americans covered by Medicare lack current access to hemp-derived cannabinoid product options through Original Medicare or under the Medicare Advantage (“MA”) program.
Innovation Center Model Providing Hemp-Derived Cannabinoid Products to Medicare Beneficiaries
To address this gap, Administrator Oz said the Innovation Center is planning a model that will allow “millions of Americans on Medicare to be eligible to receive CBD as early as April [2026]. And at no charge if their doctors recommend them.” He said that each product must first meet local and state quality and safety standards, come from legitimate sources, and abide by other state regulations (likely referencing content and dosage limits that vary among states). “With these boxes checked, patients can be eligible for up to $500 of hemp-derived products each year. This is the first government-led testing of quality and outcomes for patients across different conditions, and it delivers on the need for more data collection and research into hemp usage.”
In other words, the Innovation Center will be charged with both increasing access to hemp-derived cannabinoid products – with physician guidance and subject to safety standards – to develop real-world evidence of how those products change the way beneficiaries manage their conditions, and it will simultaneously need to develop how to measure outcomes of patients that utilize the new benefit to better inform additional usage research.
Based on how hemp-derived cannabinoid products are currently regulated, it appears that the envisioned model will be applicable to beneficiaries suffering from certain conditions where such products have some evidence that suggests a potential medical benefit, and such products could in the future be made available to MA beneficiaries under certain conditions as a supplemental benefit that increases a beneficiary’s access without replacing other available therapies. Indeed, CMS has already separately proposed changes to the MA regulations governing Special Supplemental Benefits for the Chronically Ill (“SSBCI”) that would allow for potential access to certain hemp-related products under specified conditions.
If the to-be-announced Innovation Center model shows promise, Administrator Oz said that the program could be expanded to increase access for even more Medicare and Medicaid beneficiaries.
Other Potential CMS Actions
Administrator Oz also suggested that Medicare Accountable Care Organizations (“ACOs”) may begin working with CMS to provide hemp-derived cannabinoid products with no out-of-pocket cost to patients, potentially reducing costs for the ACO and the Medicare program if the products reduce utilization of higher-cost pharmaceuticals and other interventions.
He also noted that MA insurers are agreeing to consider covering hemp-derived cannabinoid products, which has the potential to expand access to such products for the 34 million Americans enrolled in MA plans.
While the details of all of these potential CMS actions are scant, we expect more information to come from the agency very soon.