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Workers' Compensation

Workers’ Compensation Reimbursement for Medical Marijuana Usage Reviewed

New review of state workers’ compensation laws shows possibility for reimbursement for approved medical marijuana usage in handful of states

By Roger Rabb, J.D.

In light of the current opioid crisis the United States, medical marijuana use as an alternative pain management treatment has never been more topical. Dating back to the 1990s, changing social perceptions about marijuana use in general have resulted in 36 U.S. states and the District of Colombia enacting laws allowing for some type of medical marijuana use. In “Review of cannabis reimbursement by workers’ compensation insurance in the U.S. and Canada,” by John Howard M.D. et al., the authors review how medical marijuana use is treated by the workers’ compensation systems in those states that have legalized it. (See https://onlinelibrary.wiley.com/doi/10.1002/ajim.23294) Because marijuana is still illegal at the federal level and is not approved for use by the FDA, insurance companies generally are not required to compensate for its use even in those states where it has been legalized. However, in the workers’ compensation context, some reimbursement for medical marijuana use is permitted, although only in certain states.

State Approval or Disapproval

Of the 37 U.S. jurisdictions that have medical marijuana programs, six explicitly allow for workers’ compensation insurance reimbursement for an employee’s medical marijuana use (Connecticut, Minnesota, New Hampshire, New Jersey, New Mexico, New York), either under a court or administrative ruling or pursuant to an administrative rule. In New York, for example, a 2021 state court opinion held that a workers’ compensation insurer must reimburse an injured worker for marijuana use to relieve pain from a workplace injury, reasoning that the federal Controlled Substance Act did not preempt application of the state Compassionate Care Act because the federal law did not expressly prohibit such reimbursement. Similarly, in New Jersey, a 2021 New Jersey Supreme Court decision held that medical marijuana may be found, subject to competent evidence, to constitute “reasonable and necessary” treatment under the state’s workers’ compensation law and that the state’s Compassionate Use Marijuana Act could compel an injured worker’s employer to reimburse the medical marijuana costs in such cases.

Conversely, six states expressly prohibit workers’ compensation reimbursement of medical marijuana (Maine, Massachusetts, Florida, North Dakota, Ohio, Washington). Florida and North Dakota achieve this through statutes that explicitly prohibit workers’ compensation reimbursement for medical marijuana use. Ohio and Washington have administrative rules limiting reimbursement only to drugs that are approved by the FDA. Maine and Massachusetts have court opinions that effectively hold that employers/workers’ compensation insurers cannot be required to reimburse for medical marijuana use because marijuana remains illegal under federal law and reimbursement therefore could subject an employer/insurer to potential criminal liability, contrary to the rationale adopted by the New York court. It should be noted that ongoing efforts to decriminalize marijuana at the federal level, which if successful would also certainly lead to regulation of the drug by the FDA, could change the results in these states, and probably many other states as well.

Fourteen other states currently explicitly provide, either through statute or court or administrative ruling, that workers’ compensation insurance carriers, or insurance carriers in general, cannot be required to reimburse for medical marijuana use, which perhaps leaves open the possibility that such reimbursement might be provided voluntarily in some cases in these states (Arizona, Arkansas, California, Colorado, Delaware, Illinois, Louisiana, Michigan, Montana, Nevada, Oregon, Pennsylvania, Utah, Vermont). According to the authors of this review, the eleven remaining jurisdictions do not have a discernable position on reimbursement (Alaska, District of Colombia, Hawaii, Maryland, Mississippi, Missouri, Oklahoma, Rhode Island, South Dakota, Virginia, West Virginia).

Procedural Hurdles

In the states in which workers’ compensation reimbursement is or might be permitted, there are several hurdles that must be overcome before reimbursement will be authorized, some specific to medical marijuana use and some applicable to all workers’ compensation claims. An injured worker must of course have a work-related injury or illness resulting in a valid workers’ compensation claim. The worker must also have a qualifying medical condition covered under that state’s medical marijuana law. These are similar from state to state and generally include, but are not limited to, cancer, multiple sclerosis, traumatic brain or spinal injury, epilepsy, glaucoma, and any medical condition causing chronic, severe, or intractable pain. Moreover, to be eligible for reimbursement, the worker must be registered under that state’s medical marijuana law and any applicable regulations, and most states require annual registration renewal.

A claim for medical benefits under workers’ compensation also requires evidence that the treatment is “reasonable and necessary,” and this is generally reviewed on a case-by-case basis. A determination of what care is reasonable and necessary is made first by the treating physician, although due to federal controlled substance certificate requirements, a physician even in a state with legalized medical marijuana can only “recommend” but not prescribe medical marijuana as a treatment option. As noted by the authors, given the role of the treating physician, the right of first choice of treating physician can affect the chances of getting a medical marijuana recommendation and eventually reimbursement, although four of the states in which reimbursement is expressly permitted give the initial choice of treating physician to the employee (Connecticut, Minnesota, New Hampshire, New York).

As solid research on the efficacy of medical marijuana to treat particular conditions can be hard to find, insurers will often have to rely on the treating physician’s medical decision on whether marijuana is a reasonable and necessary treatment for a particular employee’s condition, although four states have adopted medical treatment guidelines for medical marijuana that healthcare providers must follow (Connecticut, Minnesota, New Mexico, New York). Adopted medical guidelines generally require that a recommendation of medical marijuana is only permitted if the physician can demonstrate that other treatment options have been tried and were ineffective for treating the medical condition. For example, in the case of chronic pain, which often forms the basis for a medical marijuana recommendation in a workers’ compensation claim, these guidelines will require a showing that surgery, physical therapy, behavioral therapy, and prescription pain medication were tried but failed to alleviate the employee’s pain.

Reimbursement and Continuing Use

Once these requirements have been met, an injured worker in an eligible state may obtain reimbursement for medical marijuana use, although the employee’s continued use of the drug and amount of reimbursement will be guided by the state’s medical marijuana laws and the workers’ compensation insurer. The amount of marijuana use subject to reimbursement would be limited by the amount of the drug that a consumer is allowed to purchase and possess from a state-approved dispensary, and these amounts are different from state to state. Only New Mexico has crafted a specific reimbursement fee schedule for medical marijuana.

Even after making a successful claim for medical marijuana reimbursement, the authors note several potential problems stemming from continued use of the substance. For example, in addition to monitoring the injured employee’s overall response to treatment for work-related injuries, the treating doctor should monitor the employee’s continuing use of medical marijuana to watch for any adverse health effects associated with use of the substance. These adverse effects might include, for example, lightheadedness, drowsiness, nausea and vomiting, and even hallucinations, and frequent heavy use can result in physical and psychological dependence which might trigger withdrawal symptoms when trying to reduce consumption. Moreover, excessive marijuana consumption can lead to more adverse physical reactions and in rare cases even death.

In addition, workers’ compensation reimbursement does not protect the injured employee from adverse consequences if he or she is found to be intoxicated at work. While some states provide anti-discrimination protections to workers who use marijuana outside of the workplace, no state requires an employer to accommodate workplace usage of the drug and employees will generally be subject to employer discipline if found to be “under the influence” or “impaired” at work, even when the consumption took place during non-work hours. The authors note, however, that determining impairment can be difficult, as THC levels in urine do not correlate with impairment, although blood test results offer a better indicator.

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