In 2016, the New Hampshire Department of Health and Human Services determined that Mr. Panaggio qualified as a patient in the therapeutic cannabis program, and issued him a New Hampshire cannabis registry identification card.

Mr. Panaggio purchased medical marijuana and submitted his receipt to CNA Insurance Company, the workers' compensation insurance carrier, for reimbursement. CNA denied payment on the ground that “medical marijuana [was] not reasonable/necessary or causally related” to his injury.

Mr. Panaggio challenged CNA's denial before the New Hampshire Department of Labor. The hearing officer found that Mr. Panaggio had failed to satisfy his burden of proof that the medical treatment was “reasonable, related or made necessary by the work injury.” Therefore, the officer concluded, reimbursement and payment of expenses associated with medical marijuana was not reasonable.

Mr. Panaggio appealed the hearing officer's decision to the New Hampshire Compensation Appeals Board. Following a hearing, the board rejected CNA's position that Mr. Panaggio's use of medical marijuana was not medically reasonable or necessary. The board credited Mr. Panaggio's testimony that cannabis was palliative and had the added benefit of reducing his need for opiates, and unanimously found that Mr. Panaggio's use was “reasonable and medically necessary.”

Nonetheless, a majority of the board upheld CNA's refusal to reimburse Mr. Panaggio, concluding that it was “not able to provide medical marijuana” because reimbursement for medical marijuana was “not legal under state or federal law.”

The board observed that possession of marijuana was still a federal crime, and that the registry identification card issued by the state explained that RSA chapter 126-X did “not exempt a person from federal criminal penalties for the possession of cannabis.”

Relying on the statutory language in RSA 126-X:3, III(a), that “[n]othing in this chapter shall be construed to require . . . [a]ny health insurance provider, health care plan, or medical assistance program to be liable for any claim for reimbursement for the therapeutic use of cannabis,” the board determined that RSA 126-X:3, III(a), barred Mr. Panaggio's request for reimbursement, finding that the clear purpose of the statute was “to protect such providers from being subject to criminal prosecution under federal law.” Although noting that workers' compensation insurance carriers were not expressly identified in the statute, the board concluded that, because such carriers provided payments for medical treatment just as health insurers did, subsection 3, III(a), applied to them as well.

One member of the three-member board dissented. He disagreed with the majority's conclusion that because marijuana was still illegal under federal law, requiring CNA to provide reimbursement would make it “complicit in this legal violation,” noting that CNA had cited “no specific section of the Federal Controlled Substances Act that reimbursement to the claimant would violate.”

In addition, he disagreed with the majority's interpretation of RSA 126-X:3, III, reasoning that it was not supported by a “simple reading of the law's language” and “[i]f the legislature had wanted to include workers' compensation [insurers], these insurers could have been listed.”

The dispute reached the New Hampshire Supreme Court, where Mr. Panaggio argued that the board had (i) erred in its interpretation of RSA 126-X:3, III, and had to order CNA to pay pursuant to the obligation imposed by the New Hampshire workers' compensation statute, and (ii) erred when it based its decision in part on the fact that possession of marijuana was illegal under federal law.

For its part, CNA did not challenge the board's finding that Mr. Panaggio's use of medical marijuana was reasonable and medically necessary. Rather, it argued that “[t]he clear purpose of” RSA 126-X:3, III(a), was “to prevent any reimbursement of medical marijuana by any entity that would be subject under contract or law to pay.” According to CNA, “the plain and unambiguous language of the statute” created “an explicit prohibition to require an insurer to pay a claim for reimbursement.”

New Hampshire Law

RSA 126-X:3(a), III, states that:

Nothing in this chapter shall be construed to require . . . [a]ny health insurance provider, health care plan, or medical assistance program to be liable for any claim for reimbursement for the therapeutic use of cannabis.

The New Hampshire Supreme Court's Decision

In its decision, the court explained that although RSA 126-X:3, III, did not create a right to reimbursement for the cost of medical marijuana nor require any of the listed entities to participate in the therapeutic cannabis program, neither did it bar any of those entities from providing reimbursement. Importantly, the court continued, RSA 126-X:2, I, provides that “[a] qualifying patient shall not be . . . denied any right or privilege for the therapeutic use of cannabis in accordance with this chapter.”

The court then reasoned that to deny reimbursement of Mr. Panaggio under these circumstances was “to deny him his right to medical care deemed reasonable” under the workers' compensation law.

The court added that although RSA 126-X:3, III(a), did “not newly create an affirmative statutory obligation for any enumerated entity to reimburse any patient for money spent on therapeutic cannabis,” neither did it “disturb preexisting, separate statutory obligations to provide for reimbursement.” Accordingly, it held, because the board found that Mr. Panaggio's use of medical marijuana was reasonable, medically necessary, and causally related to his work injury, the board erred when it determined that the CNA was prohibited from reimbursing Mr. Panaggio for the cost of purchasing medical marijuana.

With respect to Mr. Panaggio's contention that the board erred by basing its decision, in part, on the fact that possession of marijuana was illegal under federal law, the court found that the board had not provided an adequate record of its reasoning sufficient for it to be able to render meaningful review.

Accordingly, the court remanded to the board for a determination of that issue in the first instance.

The case is Appeal of Panaggio (N.H. Compensation Appeals Bd.), No. 2017-046 (N.H. March 7, 2019). Attorneys involved include: Shaheen & Gordon, P.A., of Manchester (Jared P.O'Connor on the brief and orally), for the petitioner. Tentindo, Kendall, Canniff & Keefe LLP, of Boston, Massachusetts (Robert S. Martin on the brief and orally), for the respondent.

Insurance Coverage Law Center Comment

It should be noted that statutes in other jurisdictions expressly prohibit workers' compensation insurance carriers from reimbursing claimants for the cost of medical marijuana. See, e.g., Fla. Stat. § 381.986(15) (2017) (providing in Florida's Medical Use of Marijuana statute that “[m]arijuana . . . is not reimbursable under” Florida's workers' compensation law); Mich. Comp. Laws § 418.315a (2014) (providing in the Michigan Worker's Disability Compensation Act that “[n]otwithstanding” the requirement that an employer “shall furnish, or cause to be furnished, to an employee who receives a personal injury arising out of and in the course of employment, reasonable medical . . . treatment,” an employer “is not required to reimburse or cause to be reimbursed charges for medical marihuana treatment”).