With President Trump expected to announce a Medicare pilot program that enables Medicare CBD reimbursement for certain cannabidiol (CBD) treatments, payers are entering uncharted territory. While public attention may focus on the political or consumer implications, consequential questions for payers lie beneath the surface. They want to know how CBD products would be covered, coded, authorized, and reimbursed within Medicare’s complex pharmacy and claims infrastructure.
Medicare CBD reimbursement represents a potential shift in how alternative therapies are evaluated within federal healthcare programs, raising critical considerations around Food and Drug Administration (FDA) approval pathways, National Drug Codes (NDCs) and HCPCS (Healthcare Common Procedure Coding System) code assignment, off-label use, and payment integrity oversight. For healthcare organizations already navigating rising drug costs and regulatory uncertainty, understanding how this pilot could reshape reimbursement workflows is essential.
As a healthcare intelligence company committed to clarity, accuracy, and innovation, we’re tracking the operational, regulatory, and payment integrity questions that Medicare CBD reimbursement introduces, and what they may mean for payer decision-making now and in the future.
Core policy and regulatory questions about Medicare CBD reimbursement
Will the federal government reschedule marijuana and/or CBD-based products?
Yes, as of December 18, 2025, President Trump has reclassified certain CBD products as Schedule III substances, shifting them from the most restrictive Schedule I category under the Controlled Substances Act. This move acknowledges a recognized medical use for CBD and significantly reduces barriers to clinical research, development, and coverage. This reclassification, once finalized by the Drug Enforcement Administration (DEA) marks a historic shift in federal cannabis policy.
Why it matters to payers: Schedule III classification would pave the way for CBD-based pharmaceuticals to enter regulated reimbursement pipelines. It also clears a path for FDA oversight, the assignment of National Drug Codes (NDCs), and eventually HCPCS (Healthcare Common Procedure Coding System) codes, which are all essential prerequisites for Medicare and commercial payer coverage.
While state law discrepancies and clinical use guidelines remain unresolved, rescheduling removes the single biggest legal obstacle to integrating CBD into pharmacy benefits and formulary decisions.
Does Medicare require NDC and HCPCS codes for CBD drugs?
CBD products will need National Drug Codes (NDCs) or HCPCS (Healthcare Common Procedure Coding System) codes to be reimbursed under Medicare or commercial plans. This is essential infrastructure for coverage, pricing, and claims processing.
Key unknowns:
- Will Centers for Medicare & Medicaid Services (CMS) fast-track code assignment?
- Will current drug compendia include CBD formulations?
Implication for pharmacy integrity: Coding unlocks downstream activities, from utilization review to fraud detection, and is central to payer operations.
Medicare coverage and payment mechanics for CBD products
How would Medicare coverage and payment work for CBD products?
Would Medicare restrict coverage to FDA-approved indications only? Or could it consider off-label uses supported by recognized medical compendia, as it does for some oncology drugs?
For payers: Understanding Medicare’s interpretation sets precedent. It will define formulary policy and influence how payment integrity solutions flag appropriate versus unsupported use.
How might commercial payers approach CBD reimbursement differently than Medicare?
Commercial payers are not bound by the same processes and may chart their own paths. Critical questions include:
- Will commercial plans choose to cover non-FDA-approved uses?
- Will they include CBD products in formulary design, and under what tiering structure?
- Could high-cost or unproven indications trigger prior authorization or exclusion policies?
As with GLP-1s, skin substitutes, or high-cost biologics, expect variability. Payers can start these conversations internally while monitoring state and federal decisions.
Would Medicare CBD reimbursement be limited to FDA-approved indications?
CBD-based products could be approved for epilepsy or palliative care, but demand may rise for broader use, from anxiety to arthritis. This opens the door to off-label prescribing, which complicates coverage decisions.
Key consideration: How will payers validate medically necessary use? Will they rely on diagnosis codes, chart review, or evidence-based compendia?
Federal vs. state law tensions
How could federal and state law conflicts affect Medicare CBD reimbursement?
Several states still restrict CBD distribution, especially those with stricter controlled substance frameworks. Even if federal guidance changes, state-level rules may conflict.
For multi-state payers, this creates operational complexity; authorization rules, pharmacy networks, and provider education must reflect dual layers of law.
If Medicare covers a product federally, can states still restrict its sale or distribution?
This raises Supremacy Clause questions. In Medicaid, states often shape coverage policy, but Medicare is federal. Would state bans create coverage conflicts or enforcement issues?
What happens operationally if a patient lives in a state where dispensing is restricted but Medicare covers the drug?
Could a patient be eligible for Medicare reimbursement but unable to legally fill the prescription in their home state? How would CMS resolve this? Could mail-order pharmacies be a workaround, or would that trigger enforcement risks?
For payers: This poses a real challenge for policy enforcement, claims adjudication, and network compliance.
What comes next: Longer-term implications
If regulatory barriers fall, will this trigger an expansion of clinical trials and product innovation?
An optimistic scenario: More CBD products enter rigorous clinical pipelines, expanding the pharmacopeia and giving payers stronger evidence to justify coverage. This also enables pharmacy payment integrity systems to evolve in parallel, leveraging medical necessity logic and treatment pathways.
According to a 2025 report by Research and Markets, the global CBD market is valued at $14.6 billion this year and is forecasted to reach $203.4 billion by 2034, with increasing research and development investments in topical and ingestible forms.
How might increased clinical evidence eventually influence broader payer coverage decisions?
Just as we've seen with GLP-1s and biosimilars, growing clinical validation often precedes payer adoption. The shift from anecdotal evidence to real-world data and randomized trials could tip the scale toward wider coverage if outcomes justify the cost.
For payment integrity leaders, this underscores the need for adaptive platforms that can evolve with fast-moving clinical and regulatory change.
Why Medicare CBD reimbursement matters for pharmacy payment integrity
At Machinify, we’re tracking these questions because we know how rapidly change can disrupt payment operations. While today’s announcement is a pilot, not a full-scale policy shift, its implications are wide-reaching.
From coding infrastructure to state/federal policy conflicts, and from claims review to clinical justification, the rise of CBD reimbursement will demand systems that are both precise and agile.
Key takeaway for payers: The rules may not be written yet, but the future is already being shaped. Now is the time to evaluate how your payment integrity infrastructure will adapt to this new class of products.
We’ll be watching
As this pilot unfolds, we’ll continue to monitor and share the most important developments. Here are the questions we’ll be updating:
- Has any CBD product received NDC or HCPCS assignment?
- What new state restrictions or rollbacks emerge in response?
- Are payers beginning to code for CBD in their pharmacy benefit systems?
- What clinical studies are being funded under the new pilot?
As always, we’ll report what’s happening and what it means for you.
Machinify is the healthcare intelligence company making healthcare claims simple and accurate. We track what’s changing, assess what’s possible, and deliver solutions that ensure accuracy, reduce waste, promote transparency, and support innovation.
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