Over the past several years, efforts to legalize the use of medical marijuana have gained momentum. To date, medical marijuana has been legalized in 23 states and the District of Columbia and 14 other states are considering similar legislation. In national polls, a majority of Americans—up to 78%—believe marijuana should be legal with a physician’s recommendation for medical use. With this level of support, the push for national legalization will likely continue. This drive for change also brings with it a wide range of medical, legal and regulatory questions. One issue, in particular, is whether employers and their insurers will be called upon to pay claims for medical marijuana as part of their workers compensation coverage. The answer requires the consideration of many complicating factors.
Marijuana’s Medicinal Value
From a clinical perspective, medical marijuana has potential therapeutic value to relieve pain and muscle spasms, control nausea related to chemotherapy, stimulate appetite for AIDS patients, and control ocular pressure related to glaucoma. While most of these conditions would not result from a work-related injury, medical marijuana is also a potential line of treatment for chronic pain, a huge concern for workers compensation.
According to the Institute of Medicine, chronic pain affects approximately 100 million adults in the United States, and costs up to $635 billion each year in treatment and lost productivity. The use of opioids for pain related to a workplace injury has increased in recent years, resulting in both escalating treatment costs and significant safety issues. Patients using opioids often build up a tolerance, requiring increased dosages, and prolonged use can lead to addiction and even death. In fact, there were 16,235 overdose fatalities related to opioid painkillers in 2013, according to the Centers for Disease Control and Prevention.
While alternatives exist to treat pain, such as anti-inflammatory drugs, physical therapy and acupuncture, these therapies are not always effective and pain can persist. As a result, there is significant interest in using medical marijuana as an alternative to opiates to help alleviate and manage chronic pain, and as a remedy for pain that has not responded to other courses of treatment.
Illegal Substance or Prescription Drug?
In order for marijuana to be widely accepted as a therapeutic option, more research needs to be conducted on its efficacy for pain management. Initial findings have been promising. The Journal of the American Medical Association reported in June 2015 that existing clinical trials have shown medical marijuana can effectively treat chronic and neuropathic pain. These trials were small in scale, however, and further study has been complicated by marijuana’s current legal status.
The federal government classifies marijuana as a Schedule I drug under the Controlled Substance Act (CSA) of 1970. Under the CSA, marijuana is considered as dangerous and addictive as heroin. Cultivation and distribution of marijuana are considered felonies, and possession is a misdemeanor.
But enforcement of marijuana laws has changed. In response to the increasing number of states that have legalized medical marijuana, the U.S. Department of Justice issued a memo in 2013 to state attorneys essentially saying that the federal government would not elect to prosecute patients or their caregivers who are complying with state laws that legalize medical marijuana.
Even with the support of this memo, however, medical marijuana presents a catch-22: Reclassification of marijuana under the CSA would be required before large-scale, randomized studies could take place to confirm any therapeutic benefits that would justify its use.
The Food and Drug Administration has flatly refused to endorse the use of marijuana for medicinal purposes, stating that “no scientific studies support medical use of marijuana for treatment in the United States, and no animal or human data support the safety or efficacy of marijuana in general medical use.”
Because of these contradictory directives, many workers compensation payers are choosing to categorically deny coverage. Experts say these payers are well within legal and medical parameters to do so, especially since medical marijuana is not included in any standard workers compensation treatment guidelines for the treatment of occupational injuries—specifically the Official Disability Guidelines and the American College of Occupational and Environmental Medicine Practice Guidelines. Some states, like Colorado, Michigan and Vermont, have clear statutes or regulations saying that workers compensation insurers will not have to pay for medical marijuana. In other states that do not have such clear exclusions, courts are reviewing treatment decisions.
Evolving Case Law
Various state rulings may be setting a new precedent in the medical marijuana and workers compensation debate. New Mexico’s Court of Appeals has ruled three times since May 2014 that medical marijuana should be covered under workers compensation policies. In these cases, the injured employees were authorized to use medical marijuana after traditional therapies failed to relieve their pain.
In all three opinions, the New Mexico Court of Appeals found medical marijuana constituted “reasonable and necessary” treatment. Under the state’s “compassionate use” law, authorization was considered equivalent to a prescription. As a result, the employers were ordered to reimburse the injured workers for medical marijuana, and the reimbursement process allowed the carriers to avoid directly paying for an illegal substance.
In November 2015, New Mexico became the first state to propose a reimbursement rule for medical marijuana. The state’s 2016 fee schedule set the maximum payment that injured workers could be reimbursed for medical marijuana at $12.02 per gram and established that claimants could receive as much as half a pound every three months.
Louisiana has also shown support for medical marijuana reimbursement in workers compensation. The Louisiana Court of Appeals upheld a workers compensation judge’s ruling that an employee’s prescription for a drug containing THC (the primary psychoactive chemical in marijuana) was a “necessary medical expense” and ordered the employer to reimburse the claimant. The court did not assess any penalties against the employer or require that the employer pay for the claimant’s attorney fees, however.
In December 2015, Minnesota’s health commissioner decided to include “intractable” pain as a condition that could be treated with medical marijuana. This decision opened the door for at least one claimant’s attorneys to file a claim for a workers compensation insurer to cover the cost for medical marijuana. A decision has not yet been reached.
Tolerance in the Workplace
Since marijuana is still federally illegal and categorized as a Schedule I substance, employers must consider the ramifications for drug-free workplace policies. In some cases, there may be employees who are authorized to use medical marijuana but who could potentially be terminated if they test positive for marijuana in a random drug test. This was the scenario with the Coats v. Dish Network case in Colorado. Brandon Coats became a quadriplegic in a car accident and used medical marijuana to control leg spasms. In 2010, as a result of off-duty use of medical marijuana, he failed a random drug test and was fired. On June 15, 2015, the Colorado Supreme Court upheld the right for businesses to fire employees for medical marijuana use, even if use occurred while off duty.
Despite deeming medical marijuana to be compensable under workers compensation, New Mexico saw a similar case. Tractor Supply Co. fired an employee in the state who legally used medical marijuana as part of his treatment for HIV/AIDS because it went against their drug-free workplace policy, and a federal court upheld the decision. If the court had agreed with the employee, Tractor Supply (which has stores in 49 states) would have had to modify its drug-free policy for each state that has legalized medical marijuana.
Organizations that do not have a drug-free policy might choose to be more lenient. According to a study conducted by EMPLOYERS, a workers compensation insurance services provider, one out of five small employers would allow an employee with a doctor’s prescription for medical marijuana to use the drug while at work.
Medical marijuana use could result in additional workplace risks, however. Although marijuana affects individuals in different ways depending on frequency of use and dosage, studies show that marijuana can impair cognition, balance and coordination, decrease alertness, and slow reaction time. These factors may pose safety hazards, and might even result in additional workers compensation claims.
Changes on the Horizon
Pending legislation could change marijuana’s legal status. The Compassionate Access, Research Expansion and Respect States (CARERS) Act would re-classify marijuana from a Schedule I to a Schedule II substance, recognizing it as having “accepted medical use.”
Another bill, the Regulate Marijuana Like Alcohol Act, proposes that marijuana be regulated in a manner similar to alcohol, removing it from the CSA’s schedules entirely. Oversight of marijuana would then be transferred from the Drug Enforcement Administration to the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The landscape for medical marijuana regulations continues to evolve through legislation and case law. While the workers compensation industry may see a few claims for medical marijuana creep into the system, it is highly unlikely to be approved for a vast majority of claims at this time. Changes to federal or state laws, new court decisions, and findings on the efficacy of medical marijuana will all reshape the debate, however. In the meantime, workers compensation professionals should continue to monitor judgments and verdicts—as well as public and political trends—that will have ongoing ramifications for the industry and could forecast reclassification in the future.