January 12, 2026
Categories: Hemp , Medical Cannabis
Key Takeaways:
On the heels of an executive order1 that is intended to reschedule medical marijuana and increase federal cannabidiol research, the Centers for Medicare & Medicaid Services (CMS) Innovation Center recently announced hemp product flexibilities in the context of the Long-term Enhanced ACO Design (LEAD) model.2
How the LEAD Model Enhances Delivery
LEAD’s “Healthy Living” flexibilities, which includes Benefit Enhancements (BEs) and Beneficiary Engagement Incentives (BEIs), import Medicare Advantage (MA)–style levers into fee for service (FFS) to enable proactive, coordinated care. Notably, the Substance Access BEI allows ACOs, at their own expense and subject to state law, to consult with beneficiaries on eligible hemp products.
What are Beneficiary Enhancement Incentives?
LEAD’s Substance Access BEI authorizes participating ACOs, at their own expense and only in states where eligible hemp products are legal, to consult with patients about potential benefits of hemp products. Within these parameters, the BEI functions to facilitate structured, evidence oriented conversations about hemp as a preventive or maintenance tool for chronic conditions.
Practically, the BEI normalizes clinician–patient dialogue within a prevention framework, enables integration of counseling into team based care and care management workflows, and allows pairing with other Healthy Living initiatives such as nutrition supports and evidence based programs, encouraging provider education, outcome tracking and safety monitoring.
Hemp Policy Headwinds to Keep in Mind
With passage of the FY2026 Agriculture Appropriations Act, federal law has narrowed what qualifies as “hemp,” which will take effect in November 2026. The new definition sets a “total THC” limit of no more than 0.3% (including THCA) and confirms industrial uses like fiber and grain. It also excludes many consumer cannabinoid products: seeds above the 0.3% limit; lab made or chemically converted cannabinoids (like many delta 8/10 products); intermediate ingredients above 0.3% total THC or similar effect cannabinoids; and final retail products with more than 0.4 mg per container of combined total THC or similar effect cannabinoids. Within 90 days of the law’s enactment, the US Food and Drug Administration (FDA) must publish lists of cannabinoids that naturally occur in the plant and THC class or similar effect cannabinoids. Additionally, the agency must further define what counts as a “container.”
For LEAD ACOs, this sets a federal baseline that materially narrows the BEI’s hemp product options and will be space that we will continue to monitor this year.
Key Considerations for Providers
For providers and ACOs, LEAD’s flexibilities enable whole person prevention in FFS, and the Substance Access BEI creates a defined, compliant channel for standardized hemp counseling, informed patient choice and real world data collection. For industry stakeholders, the BEI offers a legitimate point of entry into care management workflows.
By pairing prospective payments and prevention forward incentives with clear safeguards, CMS is enabling comprehensive, patient centered interventions in FFS. The Substance Access BEI is a clear signal that structured, compliant engagement on hemp, as a preventive or maintenance tool for chronic disease, belongs in the clinical dialogue where lawful and evidence informed, advancing whole person care under accountable, value based arrangements. How and when other stakeholder agencies adjust regulations and policies will likely affect uptake and implementation of the BEI-related practices.
With a longstanding, sophisticated understanding of healthcare law and deep experience at the forefront of the medical and adult use cannabis and hemp industry, we help clients navigate evolving regulations and develop innovative legal solutions tailored to their needs.
