Medical Marijuana and Workers' Compensation Update

On March 17, 2023, the Commonwealth Court circulated two precedential opinions in the matters of T.L. Fegley, as Executrix of the Estate of P. Sheetz v. Firestone Tire & Rubber and E. Appel v. GWC Warranty Corp.

Paul Sheetz sustained a work-related injury in 1977 and had been taking “opiates and narcotics” “for approximately 30 years” until January 2019 when, at the recommendation of his doctor, he began using medical marijuana which allowed him to wean of Diazepam and Oxycontin. ?

Edward Appel sustained a work-related injury in 2006 which led to two lower back surgeries and chronic pain for which he was prescribed opiates. He began the process of weaning himself off opiates in 2018 but was experiencing tremendous symptoms of withdrawal before he began using medical marijuana which was more effective for him than the opiates had been.

The two cases involved different parties and followed different procedural paths but ultimately presented similar issues for the Court: (1) whether insurers/employers were exempted from payment of medical marijuana under Pennsylvania Medical Marijuana Act; and (2) whether reimbursement of out-of-pocket expenses for medical marijuana would violate federal law. ?

Exemption Under Pennsylvania’s Medical Marijuana Act

After rejecting several preliminary arguments regarding waiver of defenses and the scope of the term “insurer”, the Court turned to Section 2102 of Pennsylvania’s Medical Marijuana Act which states:

Nothing in this act shall be construed to require an insurer or a health plan, whether paid for by Commonwealth funds or private funds, to provide coverage for medical marijuana.

The employer urged the Court to hold this law excludes medical marijuana from coverage under Pennsylvania’s Workers’ Compensation Act.

Claimant argued that this section should be read as limited to the phrase “coverage”, meaning an insurer’s payment directly to a provider, as opposed to and distinct from “reimbursement” where payment would be made to an injured worker for out-of-pocket costs such as medical marijuana.

Relying upon definitions taken from Black’s Law Dictionary and citing to similar statutes from other states which include an exemption for “reimbursement” rather than “coverage”, the Court adopted claimant’s proposed reading of the law:

the MMA provides that an insurer is not required to include medical marijuana as a risk under its insurance policy, there is no language in the MMA precluding a WC carrier from repaying a claimant for his out-of-pocket medical treatment cost which has been found to be reasonable and necessary for his work-related injury.

Addressing arguments raised by the dissent, the Majority also included an argument in the alternative:

even if coverage is interpreted to include reimbursement, there is no language in the MMA which prohibits insurers from providing coverage for prescribed medical marijuana provided to WC claimants for the treatment of their work-related injury.

Conflict with Federal Law

Next, the Court turned its attention to the basis for the denial of the Penalty Petition: the Judge’s finding that that reimbursement for medical marijuana would cause the workers’ compensation insurance carrier to violate federal law per Section 2103 of Pennsylvania’s Medical Marijuana Act which states:

Nothing in this act shall require an employer to commit any act that would put the employer or any person acting on its behalf in violation of Federal law.

On this point, the Court focused on the federal statute criminalizing the manufacturing, distribution, or dispensation of a controlled substance and concluded that reimbursement for a claimant’s out of pocket medical expenses for medical marijuana would not qualify as illegal under this statute as the insurer/employer would not be manufacturing, distributing, or dispensing medical marijuana, would not be violating federal law, and would not even “be at risk of facing federal prosecution by doing so.”

Although the Majority addressed 21 U.S.C. § 841(a), criminalizing manufacturing, distributing, or dispensing a controlled substance, it was silent on 21 U.S.C. §844 which criminalizes the possession of a controlled substance, ?21 U.S.C. §846 criminalizing ?conspiracy to possess, distribute, manufacture, or dispensing a controlled substance, 18 U.S.C. § 2(a) aiding and abetting possession, distribution, manufacture, or dispensation of a controlled substance,

Conclusion

?Medical marijuana may prove to be a tremendous boon for medicine and pain control. However, these precedential opinion from the Commonwealth Court place Pennsylvania’s employers and insurers in an unenviable position, with the prospect of penalties under Pennsylvania’s Workers’ Compensation Act despite the murky status of medical cannabis' federal legality and enforcement (which can change from administration to administration).

Practically speaking, employers and insurers should keep in mind that these opinions are limited to the “reimbursement” of a claimant’s out of pocket medical expenses for medical marijuana. They do not direct employers and insurers to issue payment to dispensaries.

Finally, the Opinions of the Commonwealth Court are not necessarily final, and it is possible that one or both of the defendants may appeal. Employers and insurers should continue to follow developments in this case as well as this area of the law.