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Medicare drug coverage
Judging from current indicators in the healthcare industry, the demand for medical cannabis in the management of chronic diseases is increasing steadily. As expected, patients covered under different health insurance plans across the world hope to access cannabis-derived products under their insurance policy. Depending on the region and existing legislation, insurance schemes treat cannabis products differently.
Medicare is a federal insurance program established in 1965 to provide coverage for healthcare services for U.S. residents over 65 years of age and other eligible enrollees. In 1972, the Social Security Act was expanded to secure health insurance coverage for permanently disabled individuals under the Medicare program. Currently, the pool of enrollees covered on Medicare includes virtually all citizens over 65 years and about 1 in every 6 Americans. The federal portion of Medicare spending is expected to reach over $690 billion in 2020, with a projected 63 million beneficiaries. Controlled by the Center for Medicare and Medicaid Services, the Medicare programs are balanced on an extensive payment network that allows beneficiaries to secure health services for private insurers.
With respect to drug and services coverage, Medicare is divided into four distinct prescription drug plans. Part A provides insurance cover for hospice care, skilled nursing facility stays, and inpatient hospital stays. Part B, also known as Supplementary Medical Insurance, covers medical care and supplies, including medical equipment, physician-administered medications, laboratory services, and outpatient hospital care. Part C covers all services and drugs covered under Part A and Part B with the exclusion of hospice care. Also known as Medicare Advantage (M.A.), this private plan also covers additional health service costs. Part D covers outpatient prescription drugs as a plan provided through private prescription drug plans (PDPs). Beneficiaries under this plan mostly require treatment plans involving high-cost drugs.
Essentially, a large portion of the beneficiaries under the Medicare program is old citizens requiring integrative medical services. Cannabidiol has been reported to be beneficial for the management of diseases with a common predisposition among the old population. Cannabidiol affects therapeutic benefits by activating the cannabinoid receptors and subsequently influencing the actions of the endocannabinoid system—signaling known to play important roles in memory formation, mood regulation, pain regulation, and glucose metabolism. This provides a logical explanation for why beneficiaries consistently make inquiries about Medicare’s coverage of CBD and cannabis-derived products.
Medicare’s stance on cannabidiol compounds
Medicare’s stance on cannabis-derived products is somewhat flexible. However, for the most part, cannabidiol and other cannabis-derived products are not covered, because the program falls largely under federal control, with insurance policies under Medicaid being subjected to federal regulations.
As of January 2020, hemp-derived CBD products have been legalized in over 33 U.S. states, even though cannabis remains illegal on the federal level. In accordance with the existing directive, cannabis is classified as a Schedule 1 drug and, as such, considered dangerous in humans with a high tendency for abuse. As long as cannabis is regulated as a Schedule 1 drug, medical cannabis cannot be covered under any insurance plans. In states where medical cannabis is legal, CBD and cannabis products can be prescribed for the management of selected diseases. Patients requiring such healthcare services are expected to personally fund the prescription drugs.
Insurance programs can cover only drugs already approved by the Foods and Drug Administration (FDA). With the exemption of Epidolex, Marinol, and Syndros, there are no other cannabis products approved by the FDA. The FDA has consistently reaffirmed that the volume of research currently available to support the clinical use of cannabis is inconclusive and, as such, is insufficient to approve cannabis for medical use. With cannabis denied approval for clinical use, products derived from cannabis are excluded from Medicare’s drug list. The approval of medical cannabis on the federal level might take a while as long-term data collection is needed to determine the safety profile and efficacy of cannabis formulations.
Accessing cannabis-derived products while on Medicare
In some cases, prescribers might need to place the Medicare program beneficiaries on cannabis products as an adjunctive therapy approach. With the limited coverage offered for this type of drug, patients might have to access these drugs in a different way. Beneficiaries who are on the Part D plan or the Medicare Advantage plan may have coverage for Epidolex and other high-cost cannabis-derived drugs. The most common way patients access cannabis products not covered on Medicare’s insurance policy formulary is by out-of-pocket funding. The patients simply pay for these products with personal funds and bear the full burden of payment. This mode of payment does not affect the beneficiary’s policy copayment, deductible, or coinsurance charges. It is only required that the product use history be documented.
Another infamous method is by indirectly accessing the products through the use of consulting fees. This practice is controversial and considered to have some legal consequences. Prescribers can simply charge the product cost with the consulting fees or as an in-house expense. As a result of this, the consulting fee is significantly increased to include the cost of the cannabis product. Since consulting fees are covered under the Medicare program, the payment burden for high-cost cannabis products is reduced. In recent times, this practice has been condemned and considered a fraud. Prescribers and beneficiaries who are found guilty can face Medicare fraud charges. However, the practice is still popular in some parts of the United States. To avoid facing such charges, patients are advised to pay for cannabis products using personal funds.
The federal regulations guiding the cannabis products in the United States have been consistently changed over the decade. There have been different calla and a recently introduced Bill seeking to reclassify cannabis products and create legal standing for medical cannabis. With the widespread advocacy for cannabis products and the relaxation of previous strict rules, medical cannabis is expected to become readily accessible in the future.