California Proposition 64, and Other Marijuana Legislation: Are These Legislative Actions the Gateway to Marijuana Inclusion in Medicare-Set Asides?…Not Likely.

Medical Marijuana, Medicare Set-Aside Blog on February 6, 2017
Posted by Jean S. Goldstein, JD, CMSP

marijuana-1114713_1920In 1996, California became the first state to allow for medical use of marijuana.  Marijuana is and remains classified as a Schedule I drug, which is defined by the United States Drug Enforcement Agency as, “substances with no currently accepted medical use and a high potential for abuse.”  Schedule I drugs also include drugs, such as Heroin, LSD, Ecstasy, and Peyote.  Based upon this classification, in 2008, the California Supreme Court ruled that marijuana did not have the same status as a legal prescription drug.  Ross vs. RagingWire Telecommunications, Inc., 42 Cal. 4th 920.  RagingWire enabled an employer to lawfully terminate an employee for using medical marijuana, but as states continue to adopt laws that allow marijuana use, this precedent could be subject to increased scrutiny.  Recently through the enactment of California Proposition 64, California legalized non-medicinal (recreational) marijuana use for adults.  This latest legalization has raised numerous questions and concerns, and in particular questions as to how Proposition 64 could affect workers’ compensation claims.

As of November 1, 2016, 25 states and the District of Columbia have legalized medical marijuana, and 4 states and the District of Columbia have legalized recreational use of marijuana.  One pressing question, as a result of the legalization in these states, is whether workers’ compensation payers will be required to pay for marijuana when prescribed for a claimant in a state where medical marijuana use has been legalized? If so, this then begs the question- what’s to preclude inclusion of marijuana in a Medicare Set-Aside?  At present in some states, statutory language provides guidance of whether a healthcare provider or insurer may be liable for reimbursement for medical use of marijuana.  For example, in California, statutory language found in Health and Safety Code 11362.785 (d) governs that payment for medical use of marijuana is not shifted to any healthcare provider or insurer.  Interestingly, recently North Dakota passed a bill which prohibits the payment of workers’ compensation benefits for medical marijuana.  However, several states now have documented cases where reimbursement for medical marijuana has been made, and in December, 2016 an administrative judge in New Jersey ordered an insurance company to make reimbursement for medical marijuana used by an injured worker.

With respect to marijuana inclusion in Medicare Set-Asides (MSAs), it is important to note that a Medicare Set-Aside allocates for all future medical and pharmacy expenses related to the work injury, that are covered and otherwise reimbursable by Medicare.  At present, medical marijuana is not covered by Medicare.  Medicare covered prescription drugs are drugs that are approved by the Food and Drug Administration (FDA), and the FDA has not approved marijuana as a safe and effective drug for any indication.  Based on this classification then, the presumption is that medicinal marijuana will never be included in an MSA—but what if marijuana is reclassified or no longer considered a Schedule I drug; or if the FDA approves medicinal marijuana use for certain conditions.  Will Medicare then cover medicinal marijuana, and in turn will medicinal marijuana be included in MSAs?  In August 2016, the U.S. Drug Enforcement Agency shot down requests to reclassify marijuana from a Schedule I drug, indicating that “[m]arijuana remains a Schedule I controlled substance because it does not meet the criteria for currently accepted medical use in treatment in the United States…”  Even if marijuana were changed to a Schedule II drug, it is likely that the FDA would not classify it as safe and effective for the conditions we see in most workers’ compensation claims.

At the Federal level, marijuana is still illegal, but conflicting states laws are certainly creating additional hurdles and concerns.  Marijuana is still considered a Schedule I drug and despite recent legislation, such as California Proposition 64, we will likely not see medicinal marijuana popping up in MSAs anytime in the near future.