Federal health officials on Wednesday announced the launch of a new Trump administration initiative to cover up to $500 worth of hemp-derived products each year for eligible patients. The program being implemented by the Centers for Medicare & Medicaid Services (CMS) focuses largely on CBD but also allows a certain amount of THC in products.
“CMS is committed to innovation that meets patients where they are while maintaining strong safeguards and clinical oversight,” CMS Administrator Dr. Mehmet Oz said in a press release. “Under the president’s leadership, we’re expanding the tools available to improve patients’ health while generating important insights into how providers can use these tools safely and effectively in real-world care settings.”
President Donald Trump signed an executive order in December calling 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 new CMS hemp initiative “reflects the Administration’s broader efforts to expand access to innovative, patient-centered care,” the agency said. “It marks a meaningful step as CMS begins testing how emerging care tools can be integrated into coordinated care to improve outcomes and quality of life.”
The Substance Access Beneficiary Engagement Incentive (BEI) is available to participants in CMS’s ACO REACH Model and Enhancing Oncology Model as of Wednesday, and under the Long-term Enhance ACO Design (LEAD) Model starting on January 1, 2027.
“This new CMS initiative gives providers in certain models another tool—with necessary safeguards—to support their patients’ needs through consultation about whether possible use of hemp products could help improve symptoms,” CMS Innovation Center Director Abe Sutton said.
The agency announced that five Accountable Care Organizations (ACOs) in the ACO REACH Model have already submitted implementation plans that CMS will review, with more expected soon.
“Products must comply with applicable federal, state, and local laws and meet quality and safety standards, including third-party testing for potency and contaminants,” the agency said.
Inhalable preparations are not allowed, and products can contain no more than 0.3 percent delta-9 THC by dry weight and can have up to 3 milligrams of total THC per serving.
The THC limit could potentially change if a law the president signed late last year takes effect as scheduled this November. That policy would strictly limit the types of cannabis products that are currently permitted under the 2018 Farm Bill that Trump signed in his first term, expressly prohibiting hemp derivatives containing more than 0.4 milligrams of total THC per container.
“CMS will not pay for or reimburse providers for these products under the Substance Access BEI,” the agency said in Wednesday’s announcement. “The incentive includes strong safeguards to protect patients and ensure appropriate use, including physician oversight, strict product standards, and program integrity requirements.”
The Medicare cannabis product plan is being challenged in a lawsuit filed this week by a coalition of anti-marijuana organizations. A federal judge denied their motion for a temporary restraining order to halt it from launching, but scheduled a hearing for April 20 on their separate request for a preliminary injunction.
In the meantime, CMS said it “will monitor implementation and evaluate outcomes as part of its ongoing work to test new approaches to appropriate and cost-effective care delivery and payment.”
“CMS does not make claims regarding the therapeutic value of these products,” the agency said.
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