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Bar News - August 16, 2017

Workers’ Compensation and Personal Injury Law: Workers’ Comp and Reimbursement for Therapeutic Cannabis


With opioid abuse making headlines on what seems like a weekly basis, even properly prescribed use of those drugs to treat serious, chronic pain is under scrutiny. It’s recently become common for injured workers who use a narcotic pain medication regimen – even those who’ve been doing so safely and effectively for years to manage crippling spine injuries or nerve disorders like Complex Regional Pain Syndrome (CRPS) - to see the treatment in their case challenged by the insurance adjuster.

But it doesn’t have to be a legacy client. Someone newly injured on the job, if offered OxyContin for their pain, might shy away because of addiction fears. Or sometimes the treating doctor will spontaneously suggest an alternative. In any event, the issue of medical marijuana has been elbowing its way into many workers’ compensation cases. And the client’s inevitable question is, “Will the carrier pay for this treatment?”

Spoiler alert: The answer is no. At least, not yet, but the law in this area is both unsettled and evolving very quickly.

New Hampshire first authorized the use of what it calls “therapeutic cannabis” with the 2013 enactment of RSA 126-X. The statute allows cannabis to be prescribed to patients with a “qualifying medical condition.” Those were first defined as cancer, muscular dystrophy, Crohn’s, and spinal cord injuries, among others. And the list is growing. On July 9, 2017, Governor Chris Sununu signed HB 160 into law, adding chronic pain and Post-Traumatic Stress Disorder (PTSD) to the list.

Though legal since 2013, patients could not actually purchase cannabis in the state until the first “Alternative Treatment Center” completed its regulatory compliance in April 2016. Only then could qualifying patients even begin to litigate reimbursement claims, so this is all quite new to the state’s Labor Department. Real data is hard to come by because administrative orders are not public, but anecdotal evidence suggests that the number of such orders is barely into double digits, if they address the New Hampshire-specific statute at all. (A few cases were brought by claimants who, prior to 2016, unsuccessfully claimed reimbursement for cannabis purchased legally in states other than New Hampshire).

A tenet of workers’ compensation law is that the employer on the risk for a work injury is responsible to pay for all medical treatment that is causally related to the injury, reasonable, and medically necessary. It’s also well-settled by our Supreme Court that palliative medical care is fully compensable, even if “the curative value of further treatments is nil.”

The few cannabis reimbursement claims that have reached the state’s Compensation Appeals Board (CAB) have often foundered on this ground that the care wasn’t proven to be medically necessary. Either the evidence was insufficient to prove causation, or maybe other treatment options weren’t fully explored.

But our firm has recently received a CAB decision directly holding that although the claimant’s treatment with therapeutic cannabis is causally related, reasonable and medically necessary, the carrier is still not legally required to reimburse. The decision is currently pending appeal to the NH Supreme Court.

The CAB in this case identified two main stumbling blocks to reimbursement. The first, unsurprisingly, is the Controlled Substances Act. Despite the fact all but a handful of states authorize prescription of cannabis or its derivatives for medical use, the CSA continues to classify cannabis (it actually uses the sepia-toned “marihuana”) under Schedule I as having “no currently accepted medical use in treatment.”

The carrier argued, as all do, that since cannabis possession remains categorically illegal under federal law, they shouldn’t have to pay for it despite the patient’s full compliance with state law. It’s a good argument, but some appellate courts that have directly addressed the question have nevertheless ordered reimbursement.

The Rosetta stone for this line of cases is from New Mexico, Vialpando v. Ben’s Automotive Services. The court ordered reimbursement on the theory that the actual threat of federal prosecution under the CSA is so remote that it doesn’t displace the carrier’s obligations under state law.

Vialpando, and decisions from Maine and New Jersey that have followed its reasoning, have relied on what’s known as the “Cole Memorandum,” a 2013 statement published by the U.S. Department of Justice that, as a matter of prosecutorial discretion, the Department of Justice will not seek to enforce the CSA against patients treating in accord with a sovereign state’s well-regulated statutory scheme.

It may not have escaped the reader’s attention that DOJ’s leadership has changed hands since 2013. Or, that Attorney General Jeff Sessions has publically been less than acquiescent toward several states’ marches toward acceptance of marijuana use, both recreational and medicinal. However, for several years, Congress has withheld funding for any DOJ prosecution of the CSA against doctors, patients, or distributors of legal therapeutic cannabis. The 9th Circuit Court of Appeals in US v. McIntosh, while noting that such funding could yet return, recently enjoined federal prosecutions on exactly this ground.

The second stumbling block involves New Hampshire’s therapeutic cannabis statute itself, which states that “[n]othing in this chapter shall be construed to require any health insurance provider… to be liable for any claim for reimbursement for the therapeutic use of cannabis.”

It’s not unusual for a state to statutorily prohibit reimbursement claims. Michigan, for example, authorized medical marijuana in 2008, and then in 2012, added to its Workers’ Compensation Act a provision that otherwise responsible employers are “not required to reimburse or cause to be reimbursed charges for medical marihuana treatment.” But New Hampshire has made no such change to RSA 281-A, its own workers’ compensation statute. A statute like RSA 126-X that declines to create an obligation to reimburse is quite different from an explicit statutory prohibition. Whether the CAB was correct to read RSA 126-X this way is pending appeal.

For now, injured workers can expect carriers to uniformly refuse to pay for therapeutic cannabis, and the Labor Department and Compensation Appeals Board appear unlikely to step out onto this uncertain legal ground without definitive guidance from the Supreme Court. Hopefully, that guidance may soon remove the uncertain status of this treatment for the injured workers it benefits.

Jared O’Connor

Jared P. O’Connor is an attorney and member of the personal injury team at the law firm of Shaheen & Gordon. He has been advocating for injured workers, and haranguing the Labor Department and defense counsel with legal theories of varying plausibility since 2003.

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