The lawsuit was filed by a group of anti-cannabis activists in the federal courts to prevent what they call coverage for hemp products that are not FDA approved under Medicare programs.
The lawsuit, led by Smart Approaches to Marijuana and other groups, challenges a Medicare pilot program that lets providers give certain items—including CBD—to patients under flexible care rules.
Plaintiffs argue the Centers for Medicare & Medicaid Services is effectively opening a pathway for cannabinoid products that have not been approved by the U.S. Food and Drug Administration (USDA).
Robert F. Kennedy Jr. and Mehmet Oz, Administrator of the Health and Human Services Department (HHS), are listed as defendants in this lawsuit.
The usual suspects
The plaintiffs belong to a network of anti-cannabis activists who have consistently fought against the use of products derived from cannabis in medical settings.
Critics and advocates alike tend to underestimate the scope of this program. According to current guidelines, certain CMMI models allow providers to use an incentive tool called a Beneficiary Engagement Incentive in order for them purchase products on behalf of patients.
No formal list of suppliers, product approval or Medicare reimbursement exists. Providers—not the federal government—decide whether to offer such products, and they bear the cost.
Early positioning
Several companies have jumped on the CMMI bandwagon, such as CBD king Charlotte’s Web Holdings (CW).
CW describes itself as a “launch partner” in the initiative. Vlasic Labs of Chicago-based Conagra Brands said that its products meet the “current qualifications” for the program. Cornbread Hemp in Louisville, Kentucky has said it is a supplier to a buying group serving providers of CMS programs.
It means
CMS has not approved any companies. Instead, those who choose to use the model may offer CBD-based products that conform to federal hemp standards. These benefits are indirect at the moment and primarily strategic. In a market that is struggling to gain regulatory legitimacy, companies can present themselves as being healthcare-related. This signal could be a powerful one for investors, providers and partners.
A potential route to provider networks, such as accountable-care organizations or oncology groups. Being viewed as “acceptable”, even without reimbursement, could have an impact on purchasing decisions made at clinics.
If the model changes, early movers may gain an edge. The firms already involved would be evaluated and integrated into the workflow of providers, which could give them an advantage if there is a wider acceptance or reimbursement.