The Marijuana Conversation: Questions Regulators and Legislators Are Asking

About this article: “The Marijuana Conversation: Questions Regulators and Legislators Are Asking” is the fourth installment in NCCI’s Marijuana Conversation series aimed at exploring the issues surrounding marijuana’s impact on workers compensation stakeholders.

As discussed in NCCI’s previous conversations, medical marijuana is currently legal in 29 states, as well as Washington, DC. It’s also legal for recreational use in eight states and Washington, DC. However, marijuana is still illegal at the federal level and is classified as a Schedule I drug under the federal Controlled Substances Act.

This leaves regulators with questions about the best way to protect workers, employers, and insurers, while legislators at both the state and federal levels debate numerous public policy issues regarding legalizing marijuana.

Below are four key questions regulators of both insurance and labor departments, along with legislators, are asking as marijuana becomes legal across the nation.

How do I protect workers and promote safe working environments?

State insurance and labor departments share responsibility for regulating workers compensation. While the division of their duties may vary from state to state, consumer protection is a fundamental role for any state regulator. In the workers compensation system, one of the state regulator’s top priorities is to ensure that workers are protected and that injured workers receive the benefits they are entitled to in accordance with state law. As regulators evaluate the impact—or potential impact—to their state from legalizing marijuana, they are likely doing so by considering the effects on workers.

Right now, regulators around the country are dealing with an opioid crisis. Opioid addiction and overdose have reached epidemic levels over the past decade. Prescription painkillers like oxycodone and hydrocodone can be highly addictive and result in thousands of overdose deaths each year. And, as reported by the National Institutes of Health/National Institute on Drug Abuse, misuse of prescription painkillers may be a risk factor for using heroin as a substitute. According to the Centers for Disease Control and Prevention, in the United States more than 183,000 people died from overdoses related to prescription opioids between 1999 and 2015.

Facing these statistics, regulators are certainly wondering whether medical marijuana may be a safer, less addictive alternative to opioids for injured workers, and therefore, a better choice for pain management in the workers compensation system. Since marijuana is still illegal under federal law, research has been limited and allowed only under strict controls. So, definitive answers to these questions will take time.

However, regulators must weigh the potential benefits of medical marijuana use with the potential risks to the workplace. Could an employee’s legal use of marijuana—whether medical or recreational—impact workplace safety? Are workers who are legally using medical marijuana less likely to report injuries if their employer has a drug-free workplace policy? What if the workers are concerned about potentially losing their workers compensation benefits if they test positive for marijuana at the time of injury? And what impact does all of this have on employers and insurers in the state? No doubt, regulators want to determine the best way to address these questions to ensure safe workplaces and the proper reporting of workplace injuries.

Federal regulators have also been part of the discussion. In 2016, the Occupational Safety and Health Administration (OSHA) promulgated federal workplace injury and accident reporting regulations that expanded employer exposure to fines. The rule also included new standards for post-injury drug testing. However, in 2017 Congress passed—and the President signed—a resolution blocking the regulations, and at this time it seems unlikely that a similar proposal will be advanced.

How do I regulate reimbursement for medical marijuana?

The friction between federal law and state laws on marijuana creates additional challenges for state regulators tasked with governing in this new environment.

To date, at least five states—Connecticut, Maine, Minnesota, New Jersey, and New Mexico—have found that medical marijuana is a permissible workers compensation treatment that requires insurer reimbursement. New Mexico was the first in 2014 when the New Mexico Court of Appeals ruled that insurers must reimburse “qualified” workers compensation claimants for the cost of medical marijuana to treat work injuries. Based on that ruling, the same court decided two other cases, determining that reimbursement is required if the drug is reasonable and necessary medical care for treating a work injury.

In response to these decisions, the New Mexico Workers’ Compensation Administration created a rule and adopted a fee schedule to provide a system of reimbursement for medical marijuana given to injured workers. The fee schedule went into effect on January 1, 2016.

At this time, New Mexico is the only state that established a maximum reimbursement amount for medical marijuana in a workers compensation fee schedule. In other states where medical marijuana is legal and permitted as a workers compensation treatment, regulators are considering whether they should include medical marijuana in their fee schedules. They’re also asking: What are the challenges in implementing such a change in a fee schedule? Are there alternatives?

While only one state has established a maximum reimbursement amount for medical marijuana in its fee schedule, every state now has, or is developing, a prescription drug monitoring program (PDMP). PDMPs are state-run electronic databases that track the prescribing and dispensing of prescription drugs within the state. They’ve been used by states to address the opioid epidemic. As medical marijuana becomes more commonly recommended by doctors, regulators want to know if their states should consider including medical marijuana in their PDMPs. If so, how can it be effectively tracked without a universal drug code? Currently, marijuana cannot be assigned a National Drug Code due to its Schedule I status.

While it remains to be seen whether states and state courts will continue to find that medical marijuana is permissible treatment for workers compensation, regulators likely want to know how the reimbursement process works. Does the insurer pay the marijuana dispensary directly or pay the injured worker, who can then purchase the medical marijuana? And how should the reimbursement rate be determined? Regulators are exploring new tools to address these questions going forward.

What are the issues in the legislative debate about legalizing marijuana?

Legislators at both the state and federal levels are grappling with myriad public policy issues surrounding legalizing medical and recreational marijuana.

As state legislators debate whether to legalize medical and/or recreational marijuana in their states—or are dealing with implementation issues in states that have already legalized it—no doubt they are following the opinion polls. Legalizing marijuana has become increasingly popular with voters. According to an April 2017 Quinnipiac University poll, 60% of voters favor legalizing marijuana, while 94% support the use of marijuana for medical purposes.

State legislators want to know: Is congress considering legislation to legalize marijuana? Are other marijuana-related issues, such as banking and tax reforms, being debated?

On the federal side, congress has already introduced at least 20 bills in 2017 addressing issues related to legalizing marijuana. Some of the bills propose removing marijuana from the list of Schedule I drugs under the Controlled Substances Act or legalizing certain forms of marijuana at the federal level. Other bills propose amending the Internal Revenue Code to address the taxing and regulation of marijuana products and/or to provide protections for financial institutions that serve marijuana-related businesses that are legal under state law.

It is too soon to tell whether congress will pass any substantive legislation related to marijuana. However, in May 2017 congress passed an appropriations bill for the current fiscal year that contained language stating federal funds will not be used to stop states from implementing medical marijuana laws.

This leads to another question state legislators are asking:

If my state legalizes—or has legalized—marijuana, will the federal government take enforcement action in my state?

In 2013, the US Department of Justice issued guidance regarding marijuana enforcement, known as the “Cole Memo.” The guidance suggested federal law enforcement officials focus their efforts on eight federal priorities—including preventing marijuana distribution to minors and preventing violent activity related to marijuana cultivation and distribution. The memo noted that the guidance was based on the expectation that state and local governments would “implement strong and effective regulatory and enforcement systems” in states that have legalized marijuana.

There have been questions whether states have systems in place to effectively address marijuana-related activity. For example, citing studies by the Highway Loss Data Institute and the American Automobile Association (AAA), a recent report by Smart Approaches to Marijuana—an antilegalization group—claimed that states with legalized recreational marijuana have seen an increase in both marijuana-impaired drivers and automobile accidents. Whether there is an actual causal link to marijuana use, or there are other contributing factors at play, may require additional data and analysis. In any case, there is ongoing debate regarding appropriate state regulatory and enforcement responsibilities.

It remains to be seen whether the federal government will take a more active enforcement role under the new Administration. In the meantime, state and federal legislators face the task of weighing these public policy issues, and their decisions will ultimately influence the regulatory process.

Conclusion

Medical marijuana is now legal in a majority of states, and numerous states are expected to consider marijuana proposals in the coming year. As state and federal legislators debate the public policy issues regarding legalizing marijuana, state regulators are facing questions about how to implement their state laws, while continuing to provide appropriate protections for workers, employers, and insurers.

This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

Stay tuned for our final edition of The Marijuana Conversation: What’s Next?