The Commonwealth Court of Pennsylvania (Commonwealth Court) recently handed down a decision drawing a line between insurance coverage and reimbursement by an insurer for medical marijuana. The case is Fegley v. Firestone Tire & Rubber Workers' Comp. Appeal Bd., 2023 Pa. Commw. LEXIS 26 (Pa. Commw. Ct. 2023). The claimant in the case below, Paul Sheetz, filed this appeal in June 2021; after his death in early 2022, Teresa Fegley, Sheetz's wife and executor of his estate, was substituted as the petitioner.
In September 1977, Sheetz suffered a compensable, work-related injury that required two back surgeries. His treating physician prescribed opioids and narcotics for pain management. In 2019, Sheetz's physician recommended he begin taking medical marijuana "with the hope of eliminating the need for the opioids and narcotics he had been taking for approximately 30 years." The hope was fulfilled; Sheetz ceased using the drugs Diazepam and Oxycontin after seeing improvement in his social life and mental health due to his use of medical marijuana, which was found "reasonable and necessary" by a utilization review in September 2019.
Sheetz's employer, Firestone Tire & Rubber, refused to reimburse Sheetz for the costs of the medical marijuana. Sheetz filed a Penalty Petition, claiming Firestone's refusal violated Pennsylvania workers compensation law because the medical marijuana had been found both reasonable and necessary. A workers compensation judge (WCJ) determined the refusal was not a violation of state workers compensation law, which was affirmed by the workers compensation board (the Board). On appeal to the Commonwealth Court, Sheetz made two key arguments related to reimbursement for medical marijuana: first, the Pennsylvania Medical Marijuana Act only forbade requiring coverage for medical marijuana; second, the Board failed to review the WCJ's claim that compelling Firestone to reimburse Sheetz for the medical marijuana would force them to violate federal law.
Reimbursement Under the Pennsylvania Medical Marijuana Act
The judges immediately pointed out that "coverage" and "reimbursement" are separate and distinct concepts; neither term was defined in the workers comp policy, so the court turned to the dictionary. While "coverage" refers to a specific risk included by an insurance policy, "reimbursement" means paying someone back for money already spent. Pennsylvania workers compensation law required employers to "provide payment in accordance with this section for reasonable surgical and medical services…as and when needed" (emphasis added).
Though section 2102 of the Medical Marijuana Act (35 P.S. §10231.2102) meant Firestone was well within its rights to refuse coverage for Sheetz's medical marijuana, "there [was] no language in the [Medical Marijuana Act] 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." The Pennsylvania General Assembly enacted the Medical Marijuana Act in 2016 to "[p]rovide a program of access to medical marijuana," which was accomplished in part by providing that no person would be "denied any right or privilege … solely for lawful use of medical marijuana." (35 P.S. §10231.2103(a)).
Since the utilization review had officially declared that Sheetz's use of medical marijuana was both reasonable and necessary, it would both render the Medical Marijuana Act moot and undermine the purpose of workers compensation if Firestone were permitted to refuse reimbursement for the costs of Sheetz's medical marijuana.
Forcing a Violation of Federal Law
When Sheetz initially filed a Penalty Petition against Firestone, the WCJ gave one reason for affirming the denial–it would force the insurer to violate federal law because marijuana of any kind is still federally illegal. On appeal, the Board did not directly address this contention. However, a footnote to the Board's opinion stated that it did not reach the federal law issue because the Medical Marijuana Act "already preclude[d] insurers from being obligated to pay for medical marijuana." The Commonwealth Court pointed out that, even though the Board had reached the incorrect conclusion, it had done so based on an interpretation of Pennsylvania law, meaning it was of no consequence that the Board did not address the federal law question.
The judges, however, went one step further and stated that section 841(a) of the Federal Drug Act prohibited "the manufacture, distribution, dispensing, or possession with the intent to manufacture, distribute, or dispense, a controlled substance." Merely reimbursing Sheetz for the costs of his lawful use of medical marijuana would neither force Firestone's workers compensation insurer to violate federal law nor place it in fear of federal prosecution for violation of federal law.
The denial of Sheetz's Penalty Petition was reversed and remanded.
Editor's Note: Though there is no unity of structure for medical marijuana regulations among states where it is legal, Pennsylvania is now the third state where workers compensation insurers have been chastised for not providing reimbursement for the lawful use of medical marijuana. The judges of the Commonwealth Court of Pennsylvania joined state courts in New Hampshire and New Jersey in making it clear that providing reimbursement for costs related to the lawful use of medical marijuana is not the same as providing full-on coverage for medical marijuana.
Though acceptance of medical marijuana is growing, the no-man's-land between insurance and medical marijuana is not becoming any clearer. As marijuana of any kind remains illegal on the federal level, it is likely more courts in states with an established medical marijuana program will have to confront the issue of coverage versus reimbursement.
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