“New York State of Mind”- Altering Substances: Carriers Must Now Reimburse Claimants for Medical Marijuana

On June 4, 2018, the New York Workers’ Compensation Board in Our Lady Victory of Homes officially directed a carrier to reimburse a claimant for medical marijuana expenses. G085 6672, 2018 WL 2752819 (N.Y. Work. Comp. Bd. June 4, 2018). This decision has been in the making since February of this year, when the board panel found in WDF Inc. that reimbursement is proper if the medical provider requests a variance from the Medical Treatment Guidelines (MTG). G140 3803, 2018 WL 1723750 (N.Y. Work. Comp. Bd. Feb. 16, 2018). Based on these two decisions, the board is currently compelling payment when the following criteria is satisfied:

(1) the medical provider is both registered with the Department of Health and authorized with the Workers’ Compensation Board;

(2) medical marijuana treatment is for a (i) serious condition diagnosed at (ii) an established site; and

(3) MG-2 variances (i) objectively show medical marijuana is medically necessary and treatment pursuant to the Medical Treatment Guidelines is not appropriate or sufficient; and, where relevant, (ii) prove that the claimant suffers from chronic pain as defined under 10 N.Y.C.R.R. Section 1004.2(a)(8)(xi).

With regard to the latter variance, the medical provider in Our Lady Victory of Homes met this criteria through objective evidence that showed functional improvement with the claimant’s chronic pain to the head and neck. The claimant demonstrated a substantial change in range of motion measurements and activities of daily living as a result of medical marijuana treatment versus opioid prescriptions. Therefore, the medical provider met the burden of proof, and the variance was affirmed by the board.

Of note, the board panel in WDF Inc. also reversed prior decisions denying reimbursement for Marinol, an FDA approved synthetic drug with traits and effects similar to medical marijuana. The board panel states these cases are no longer controlling because they concerned the off-label use of Marinol for chronic pain before chronic pain was a condition authorized for medical marijuana treatment under New York State Law.

The board’s reasoning (and questionable authority) in interpreting statutes and regulations that results in its authority to compel compensation leaves the possibility that the legislature or the courts will intervene.

Under federal law, marijuana is still a Schedule I drug. The State Legislature made clear under Section 3368(2) that the state’s medical marijuana program will not be construed to “require an insurer or health plan under . . . [N.Y. Insurance Law] to provide coverage for medical marijuana.” The underlying policy reason for the law is so that insurers do not violate federal law.

In April 2017, the Health Bureau of the N.Y. Department of Financial Services interpreted this section. Then, in February 2018, the board panel in WDF Inc. addressed (1) the legality of medical marijuana, (2) the board’s authority to direct payment of medical marijuana, and (3) the burden of proof under the Medical Treatment Guidelines.

The board panel notes that any person or entity acting in compliance with New York’s medical marijuana program is protected from federal prosecution because of the existing Rohrabacher-Blumenauer amendment. However, the Rohrabacher-Blumenauer amendment prevents the Department of Justice from using its resources to prosecute those in full compliance with state medical marijuana law. If­ the amendment is not continuously renewed in the federal budget, the Department of Justice may theoretically be able to prosecute for any alleged crimes that occurred while the amendment was in place unless time barred by any relevant statute of limitations.

The board panel in WDF Inc. finds that once a claimant is compliant with New York’s medical marijuana program, the board is authorized under Section 13(a) of N.Y. Workers’ Compensation Law to compel payment because medical marijuana qualifies as “other attendance or treatment.”

With regard to a carrier’s liability, the board finds that the statutory language of not requiring “an insurer or health plan under . . . [N.Y. Insurance Law]” is not applicable to a workers’ compensation carrier. The board reaches this conclusion by interpreting “insurer,” not defined in the statute, as “health insurer” by distinguishing between “accident and health insurance” and “basic insurance” (e.g., workers’ compensation) as defined under N.Y. Insurance Law.

However, the board does not provide a full and proper statutory interpretation in reaching this conclusion, because it fails to analyze “insurer” in full context. First, if “insurer” only means “health insurer,” then “or health plan” has no meaning. Second, in New York State, Article 11 of N.Y. Insurance Law governs the licensing of all insurers, including workers’ compensation carriers. If the word “under” is to be given any meaning, then the statute clearly does not require insurers licensed under Article 11 of N.Y. Insurance Law to cover medical marijuana.

Therefore, it appears that despite the clear statutory protections­­—and absent intervention by the courts or legislature—a workers’ compensation carrier is now liable for reimbursing a claimant’s medical marijuana expenses (or off-label use of FDA approved Marinol, Syndros, or Cesamet) in the State of New York.

Moving forward, carriers must be sure that medical providers treating chronic pain for an established site are compliant with both New York Public Health and Workers’ Compensation laws and regulations. If you receive an MG-2 or C-4 AUTH requesting authorization for medicinal marijuana, please feel free to reach out to determine the potential defenses and mechanism for reimbursement in order to protect your interests

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