CMS Launches Substance Access Beneficiary Engagement Incentive: First Federal Pathway for Hemp-Derived Products in Medicare Innovation Models

Executive Summary

The Centers for Medicare & Medicaid Services (CMS) announced on March 20, 2026, the Substance Access Beneficiary Engagement Incentive (BEI) – the first time a federal health program has created a structured pathway for hemp-derived products within the Medicare framework. This pilot program, which CMS described as a "milestone" signaling broader acceptance of alternative therapies, allows participants in certain CMS Innovation Center models to consult with eligible beneficiaries about the possible use of eligible hemp products – including CBD – to improve symptom control.

Effective April 1, 2026, for ACO REACH and the Enhancing Oncology Model (EOM), and January 1, 2027, for the LEAD Model, the program establishes a compliance-intensive framework that carries significant operational, legal, and financial implications for participating organizations. This alert summarizes the key provisions and recommended action steps for your organization.

Key Takeaways

1. What the Substance Access BEI Is and What It Does

The Substance Access BEI allows participants in certain CMS Innovation Center models to consult with eligible beneficiaries about the possible use of eligible hemp products to improve symptom control. In practical terms, qualifying organizations may now furnish physician-guided hemp-derived products – including certain CBD products – to aligned Medicare beneficiaries as part of patient-centered care plans.

CMS characterized this initiative as a "milestone" in expanding patient-centered innovation, signaling broader willingness to integrate evidence-based complementary therapies into the Medicare framework.

2. Eligible Innovation Center Models

The BEI is available exclusively to participants in the following three CMS Innovation Center models:

• ACO REACH Model (effective April 1, 2026);
• Enhancing Oncology Model (EOM) (effective April 1, 2026); and
• Long-term Enhanced ACO Design (LEAD) Model (effective January 1, 2027).

Organizations that do not participate in one of these models are not eligible to elect the BEI at this time. Notably, five ACOs in the ACO REACH Model have already submitted implementation plans for CMS review.

3. Participation Requirements

To participate, an eligible organization must:

1. Elect the Substance Access BEI for the applicable performance period;
2. Submit and maintain a CMS-required Implementation Plan; and
3. Receive CMS approval of that Implementation Plan.

Implementation Plan Requirements. The Implementation Plan must describe: (a) specific eligible hemp product(s) and dosing information; (b) amount and frequency of distribution; (c) beneficiary eligibility criteria; (d) safeguards and oversight mechanisms; and (e) any other requirements outlined in the applicable participation agreement.

4. Eligible Products Definition

Eligible products must align with the 2018 Farm Bill hemp provisions and are limited to federally legal hemp-derived products containing no more than 0.3 percent delta-9 THC. CMS expressly excludes:

• Inhalable products;
• Products containing more than 3 mg per serving of tetrahydrocannabinols in orally administered form; and
• Products containing cannabinoids not naturally produced by the cannabis plant.

Upcoming Regulatory Change (November 12, 2026). CMS will adjust its eligible products definition to reflect Section 781 of the FY2026 Agriculture Appropriations Act. The revised standard will reference "total THC concentration of not more than 0.3 percent on a dry weight basis" and will further exclude: (i) final hemp-derived cannabinoid products exceeding 0.4 mg combined total per container; (ii) cannabinoids not naturally produced by the cannabis plant; and (iii) cannabinoids naturally produced by cannabis but synthesized outside the plant. Organizations should prepare to audit their product inventories against the revised criteria before the effective date.

5. Patient Eligibility and Access Requirements

Beneficiaries must be aligned to a participating organization offering the BEI and must meet the program's eligibility criteria. Exclusions apply to individuals who are:

• Under 18 years of age;
• Experiencing frailty or specified disqualifying conditions; or
• Pregnant or breastfeeding.

Physician-Guided Framework. Products must be furnished by a qualified physician affiliated with the participant organization. The physician must engage in documented shared decision-making, addressing: potential benefits and risks; patient goals and preferences; current medications and potential interactions; and follow-up planning. A beneficiary is eligible only if the physician determines that product use is clinically appropriate and documents the required consultation.

6. Financial Parameters

Participants may furnish eligible hemp products up to $500 per year per eligible beneficiary.

7. Program Integrity and Compliance Guardrails

CMS has imposed substantial compliance requirements that carry significant legal exposure for participants:

Anti-Kickback and Marketing Restrictions. The BEI must not be marketed or used to induce beneficiaries to select or remain aligned to a participant organization. Participants may not enter arrangements providing remuneration to induce the selection of a particular manufacturer or seller.

Fair Market Value. All payments related to the BEI must be consistent with fair market value and must not be tied to the volume or value of referrals.

Monitoring and Enforcement. Participants must implement safeguards against abuse, including ongoing monitoring and oversight. CMS reserves the right to suspend or prohibit participation if program integrity concerns arise.

Reporting Obligations. Participants must submit quarterly reports to CMS and provide supplemental information upon request.

Procurement and Operational Responsibilities. Participants are responsible for their own procurement and operational approach, including contracting, ordering, storage, inventory controls, and distribution workflows. Products must meet quality and safety standards: compliance with federal, state, and local production and safety laws; legally compliant sourcing consistent with the Farm Bill; and third-party testing for potency and contaminants.

8. Key Dates and Timeline

What This Means for Your Organization

If your organization participates in ACO REACH, the Enhancing Oncology Model, or the LEAD Model, the Substance Access BEI presents both an opportunity and a compliance challenge. We recommend the following action steps:

• Assess Strategic Fit. Determine whether electing the BEI aligns with your patient population needs, clinical capacity, and organizational risk tolerance.
   
• Evaluate Financial Impact. Model the unreimbursed cost of product procurement (up to $500/beneficiary/year) against anticipated clinical outcomes and value-based performance metrics.
   
• Engage Compliance and Legal Counsel Early. The anti-kickback, FMV, and marketing restrictions require careful structuring. Review vendor contracts, distribution workflows, and beneficiary communications for regulatory exposure.
   
• Develop an Implementation Plan. Begin drafting the CMS-required Implementation Plan addressing product selection, physician training, patient criteria, and safeguards.
   
• Prepare for November 2026 Product Definition Changes. Audit any product inventory or vendor arrangements against the forthcoming Section 781 criteria to ensure compliance by November 12, 2026.
   
• Build Operational Infrastructure. Establish procurement, storage, inventory control, third-party testing, and distribution protocols that satisfy CMS quality and safety requirements.
   
• Establish Reporting and Monitoring Systems. Design quarterly reporting workflows and internal monitoring mechanisms to satisfy CMS oversight requirements and detect potential program integrity issues.

For More Information

If you have questions about the Substance Access BEI, its impact on your ACO or practice operations, or need assistance developing an Implementation Plan or compliance framework, please contact Lisa Gora or Natalie E. Moszczynski.

The author acknowledges with appreciation the assistance and research from Baker Donelson Summer Associate Elliott Liebling.