Medical Marijuana Reimbursement in Workers' Compensation Claims. An Exercise in States' Rights

Medical Marijuana Reimbursement in Workers’ Compensation Claims An Exercise in States’ Rights By Jenifer Dana Kaufman 10 THE BRIEF ❭ Fall 2023 PUBLISHED IN THE BRIEF, VOLUME 53, NUMBER 1, FALL 2023. © 2024 BY THE AMERICAN BAR ASSOCIATION. REPRODUCED WITH PERMISSION. ALL RIGHTS RESERVED. THIS INFORMATION OR ANY PORTION THEREOF MAY NOT BE COPIED OR DISSEMINATED IN ANY FORM OR BY ANY MEANS OR STORED IN AN ELECTRONIC DATABASE OR RETRIEVAL SYSTEM WITHOUT THE EXPRESS WRITTEN CONSENT OF THE AMERICAN BAR ASSOCIATION. It is common knowledge that marijuana, including “medical marijuana,” is federally illegal. Today, marijuana remains classified as a Schedule I controlled substance by the U.S. federal government. Marijuana has been Schedule I since the enactment of the Controlled Substances Act (CSA) in 1970. This scheduling was based upon a determination that marijuana “has no currently accepted medical use” and a high potential for abuse. 1 Marijuana remains a Schedule I drug despite the fact that 36 states have medical marijuana programs and 24 states and the District of Columbia have legalized marijuana for adult use. In addition, many states and cities have decriminalized marijuana use and do not prosecute recreational users of marijuana. At the federal level, controlled substances such as marijuana could be rescheduled or de-scheduled by either the legislative branch (U.S. Congress) or the executive branch (Drug Enforcement Administration (DEA)), as provided in the CSA and 21 C.F.R. § 1308.44. To reschedule, Congress would need to pass a law amending the CSA. Alternatively, the DEA could follow the procedure found in 21 C.F.R. § 1308.44 to reschedule marijuana. The CSA grants the attorney general rulemaking authority to reschedule a substance to another schedule. To transfer/reschedule a drug between schedules, the attorney general must make findings that the drug or other substance fits into the criteria of a given schedule. 2 In September 2023, the U.S. Department of Health and Human Services (HHS) took the first step in the executive administrative process to reschedule by recommending rescheduling marijuana to a Schedule III controlled substance. Of course, this does not guarantee that it will be rescheduled. This federal-state paradox is confounding, yet there is a simple explanation why medical marijuana can be legally sold in 36 states while at the same time be federally illegal—the existence of the Rohrabacher-Blumenauer (formerly Rohrabacher-Farr) Amendment (Rohrabacher), which has been included in every federal omnibus appropriations bill passed by Congress and signed into law by every U.S. president since 2014. This amendment states that the U.S. Department of Justice (DOJ), which is in charge of prosecuting violations of the CSA, is prohibited from using federal funds to interfere with the ability of states with medical marijuana programs to implement laws that authorize the use, distribution, possession, or cultivation of medical marijuana. In a nutshell, Rohrabacher is predicated on states’ rights, with the U.S. Congress specifically giving power to the individual states to decide how to manage their medical marijuana laws and programs. The DOJ cannot prosecute any entity or person for violation of the CSA as long as their actions are consistent with the applicable state’s medical marijuana laws. The DOJ is not powerless, however, and can still prosecute under the CSA if the marijuana at issue was not procured through a state-run program; for example, drug dealers can still be prosecuted. Against this backdrop, the question is posed: Can the costs associated with an injured worker’s use of medical marijuana GETTY IMAGES/THE IMAGE BANK/JUPITERIMAGES ambar.org/tips ❬ THE BRIEF 11 PUBLISHED IN THE BRIEF, VOLUME 53, NUMBER 1, FALL 2023. © 2024 BY THE AMERICAN BAR ASSOCIATION. REPRODUCED WITH PERMISSION. ALL RIGHTS RESERVED. THIS INFORMATION OR ANY PORTION THEREOF MAY NOT BE COPIED OR DISSEMINATED IN ANY FORM OR BY ANY MEANS OR STORED IN AN ELECTRONIC DATABASE OR RETRIEVAL SYSTEM WITHOUT THE EXPRESS WRITTEN CONSENT OF THE AMERICAN BAR ASSOCIATION. TIP : When seeking reimbursement of medical marijuana expenses for an injured worker, the state’s medical marijuana statute is a key determinant of success. be reimbursed by a workers’ compensation insurance carrier? It should not be surprising to hear that the answer is one that lawyers love: it depends. It depends on which state we are talking about and the language of that individual state’s medical marijuana statute and regulations. At present, due to litigated cases, six states explicitly allow reimbursement and four do not. A significant number of states (around 12) have written language into their medical marijuana statutes expressly stating that workers’ compensation carriers do not need to cover or reimburse medical marijuana expenses. The remainder of the states with medical marijuana programs have statutes that are vague or do not delve into this issue. Some of these states have allowed reimbursement on a case-by-case basis, but there is no precedential decision one way or the other. U.S. Supreme Court Declines to Review Reimbursement Issue In 2022, the U.S. Supreme Court had the opportunity to weigh in on this issue and determine once and for all if injured workers can be reimbursed for medical marijuana costs. At issue was whether an insurance carrier’s reimbursement of costs incurred by a legal patient of the state’s medical marijuana program would place the carrier at risk of prosecution by the DOJ for violation of the CSA. This seemed to be a textbook case for the Court, given the 6–4 split among the states as to whether such a reimbursement could be made in compliance with both state and federal laws—secondarily implicating the supremacy clause, which states that if there is a true conflict between state and federal law, federal law must prevail. Petitions for writs of certiorari were filed in two companion workers’ compensation cases out of Minnesota. In both cases, the Court denied the petitions for certiorari. 3 It is worth noting that the U.S. Supreme Court did request and review an amicus brief from the U.S. solicitor general seeking the opinion of the federal government as to whether the two Minnesota appeals should be accepted and heard. 4 The solicitor general recommended denying certiorari based upon her legal position that the federal CSA preempts state medical marijuana laws. She stated that the Minnesota cases were decided correctly. She further argued that the “Legislative and Executive Branches of the federal government are best situated to consider any potential tailored measures to address specific instances of interaction between federal and state marijuana laws.” 5 Finally, she noted pending legislative action to amend the CSA. It may be that the U.S. Supreme Court simply deferred to the wishes of the solicitor general that the judiciary not delve into the quagmire and instead wait for future executive and legislative action. However, the failure of the Court to accept the Minnesota appeals could reasonably lead a legal observer to conclude that the Court has determined that the federal law is settled in this matter due to Rohrabacher and that, therefore, every state is free to handle its medical marijuana program as it chooses and free to interpret the CSA to either allow or bar reimbursement. Certainly, the Court would seem to be in a better position to address differing interpretations of this conflict than the executive and legislative branches of the federal government. Ignoring the split among the states does not necessarily make it go away or provide meaningful guidance to other states weighing the issue in the future. Another reasonable conclusion is that the Court did not feel that it was the judiciary’s place to accept the appeals because, at the moment, Rohrabacher is good law—and, as a result, the legislative and executive branches agree that the CSA won’t be enforced relative to state medical marijuana programs. Regardless of the reasons for the Court’s denial of certiorari, states can choose, without fear of federal repercussions, to have medical marijuana programs and to require workers’ compensation carriers to reimburse injured workers’ reasonable and necessary expenses for using state-sanctioned medical marijuana to treat work injuries. This is the essence of states’ rights. Of course, should Rohrabacher lapse, or the DOJ change its position on prosecution, a future appeal to the U.S. Supreme Court might receive different treatment. States Finding Medical Marijuana Not Reimbursable Minnesota. An analysis of the Minnesota experience with this issue is worth reviewing. By way of background, Minnesota had been one of the few states that allowed injured workers to be reimbursed for their out-of-pocket medical marijuana costs. It did this by redefining “illegal substance” in its 2014 medical marijuana statute. Minnesota law stated that an illegal substance “does not include a patient’s use of medical cannabis permitted under Minnesota Statutes Sections 152.22 to 152.37.” 6 As a result, injured workers using medical...