March 11, 2019 The New Hampshire Supreme Court has overturned a labor appeals board determination that workers' compensation insurance will not reimburse an employee for the cost of his medicinal marijuana. The case is Appeal of Andrew Panaggio N.H. Comp. Appeals Bd., No. 2017-046, 2019 N.H. LEXIS 35 (Mar. 7, 2019).
In 1991 Andrew Panaggio (Panaggio) suffered a severe back injury while working. In 2016 Panaggio was approved by the State Health Department to participate in a therapeutic cannabis program and receive medicinal marijuana for his ongoing severe pain. Panaggio sought reimbursement through his workers' compensation insurer, CNA Insurance Co., (CNA) who denied payment for the claim stating that medicinal marijuana was not "reasonable/necessary or causally related" to the injury.
Panaggio challenged CNA's denial of the claim before the New Hampshire Department of Labor, and the hearing officer assigned to the case found that Panaggio failed to satisfy the burden of proof that medicinal marijuana was reasonable, related, or made necessary due to the work injury Panaggio suffered. Panaggio appealed that hearing officers decision to the board which rejected the denial of the insurance carrier based on Panaggio's use of medicinal marijuana not being medically reasonable or necessary. The board based this decision on Panaggio's testimony that "cannabis is palliative and had the added benefit of reducing his need for opiates" unanimously finding that Panaggio's need was medically reasonable or necessary.
Despite this finding, a majority of the board upheld CNA's refusal to reimburse the medicinal marijuana, concluding that CNS is not able to provide reimbursement for medicinal marijuana because medicinal marijuana is not legal by state or federal law. The board noted that possession of marijuana is still a federal crime, and the identification card issued by New Hampshire states that the RSA 126X does not exempt a person from federal penalties that come from possession of marijuana and that nothing in the statute provides that any insurer should be liable for any claim for therapeutic cannabis. Panaggio appealed this decision to the NH Supreme Court.
The high court discussed how although the statute did not create a right for an insured to receive reimbursement for the cost of medicinal marijuana, nor did the statute require any of the health insurance entities to participate in a therapeutic cannabis program, the statute also did not bar any of those entities from providing reimbursement. The Court also noted that the statute also says 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 found that when the board barred reimbursement of the employee with a workplace injury for reasonable and necessary medical care was to completely ignore the plain statutory language. Since the board had already found that Panaggio's use of the medicinal marijuana was reasonable, medically necessary, and causally related to his work injury, the court decided that the board erred in determining that CNA was prohibited from reimbursing the cost of medical marijuana.
CNA argued that if it was ordered to reimburse Panaggio for the payment of medical marijuana it would expressly violate federal laws that prohibit a person from knowingly possessing marijuana. Panaggio argued that the board "did not explain why it necessarily follows that the carrier may not separately be ordered to comply with its own state law obligation to reimburse a claim for related medical treatment." The court determined that the board failed to provide an adequate explanation of its reasoning regarding federal law.
Editors Note: It is an increasingly confusing climate for insurers, trying to comply with conflicting state and federal laws regarding cannabis. In this case, CNA merely failed to give a valid reason for the denial of the claim. CNA pointed out that it was indeed illegal for a person to knowingly possess marijuana, but did not establish a connection of illegality between themselves merely reimbursing an insured for medicinal marijuana, while effectively breaking state law by not reimbursing an insured for a medical treatment that was reasonable and necessary medical care.
UPDATE: In Appeal of Andrew Panaggio N.H. Comp. Appeals Bd., 260 A.3d 825 (N.H. 2021), the justices of the New Hampshire Supreme Court stated that the federal Controlled Substances Act neither forbade reimbursement for the lawful use of medical marijuana nor made such reimbursement illegal.