Workers' Compensation Law
Cannabis and Workers’ Compensation
By Randy H. Pollak, Esq.
I. INTRODUCTION
The legal status of cannabis in the United States is an evolving landscape. California is a leader in the push for the legalization of cannabis. However, California is also less progressive, or outright confusing, in terms of what the legalization of cannabis means for the daily lives of those who use it for medical and recreational purposes. In the context of workers’ compensation, the state of California is ambiguous as to the impact of cannabis on injured workers who may benefit from its use in treating their work injuries. For example, try to answer the following questions with clarity: Can an injured worker get cannabis for treatment in a workers’ compensation claim? Can the employer be made to pay for it? The answer to each of those, in the view of this author, is: It’s complicated. This article attempts to provide answers to those questions as far as existing law can provide guidance and to discuss the legal framework for workers’ compensation practitioners addressing these issues.
II. CANNABIS DEFINED
To start, this article is using the word cannabis, not pot or weed or dope or even marijuana. Those terms are imprecise and can connote stigma or judgment. Cannabis refers to all products derived from either the plant cannabis sativa or the plant cannabis indica. Cannabinoids are a group of substances found in the cannabis plant. The major cannabinoids are tetrahydrocannabinol (THC) and cannabidiol (CBD).
III. CANNABIS AND U.S. LAW
At the federal level, cannabis remains classified as a Schedule 1 substance under the Controlled Substances Act. Schedule 1 substances are considered to have a high potential for dependency and no accepted medical use, making their distribution a federal offense. However, this legal status is evolving. Recently, U.S. President Joe Biden directed the Department of Health and Human Services and the U.S. Attorney General to initiate the administrative process to review how cannabis is scheduled under federal law. (See https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/06/statement-from-president-biden-on-marijuana-reform/.)
Despite cannabis being a Schedule 1 substance, enforcement of its possession, cultivation and personal use is another matter altogether. Since 2014, Congress has barred the Justice Department from expending funds to impede states from implementing their own medical cannabis laws. For example, if a criminal defendant charged under the Controlled Substances Act can show that they strictly complied with state medical marijuana laws, the government may not expend funds on their prosecution and the criminal proceeding must halt. (See, for example, United States v. Pisarski, 965 F.3d 738 (9th Cir. 2020) (affirming stay of federal prosecution when the defendant strictly complied with state medical marijuana law).)
This enforcement landscape has provided room for states to experiment with varying legal schemes for cannabis, ranging from full legalization for recreational use to only medicinal use to some variation in between.
IV. CANNABIS IN CALIFORNIA
California became the first state to allow medicinal cannabis use when voters passed the Compassionate Use Act in 1996. In 2016, California voters passed Proposition 64, which legalized possession, cultivation and personal use of cannabis.
In California, it is legal for a person 21 years of age or older to possess, purchase or give away up to one ounce of cannabis and as much as eight grams of concentrated cannabis. Adults can also cultivate up to six live cannabis plants. Smoking or ingesting marijuana is illegal in public places, as is its use while in a car. Retail sales of cannabis at licensed dispensaries are subject to standard state sales tax and an excise tax of 15 percent. Local governments may enact additional taxes on cannabis businesses.
With legalization, various businesses, including growers and dispensaries, have taken a dive into the cannabis industry. Cal/OSHA regulates these entities as it does other employers. Under Cal/OSHA, employers must take steps to protect their employees from all health and safety hazards associated with their work; this includes employers who cultivate, manufacture, distribute, sell or test cannabis products.
Employers in the cannabis industry can also get insurance. The first filing and approval of an admitted commercial insurer offering insurance for the cannabis industry was announced in November 2017. There are now more than 30 insurance companies and managing general underwriters that write lines of coverage for the cannabis industry, with an even more extensive list of brokers involved in the procurement of coverage for employers. (These insurance companies and managing general underwriters are listed at: https://www.insurance.ca.gov/01-consumers/160-cannabis/upload/Cannabis-Insurance-List-Updated-10-21-20.pdf.)
V. CANNABIS AS A MEDICAL TREATMENT
Cannabis, under federal law, is recognized as having no accepted medical use. That designation has had a significant impact on research into its use for medical treatment in the United States, which, in the discussion on the Medical Treatment Utilization Schedule (MTUS) later in this article, will become apparent. Currently, the FDA has not approved the cannabis plant for any medical use.
However, the FDA has approved for medical use several drugs that contain individual cannabinoids. Epidiolex, which contains a purified form of CBD derived from cannabis, was approved for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome, two rare and severe forms of epilepsy. Also, the FDA approved for medical use Marinol and Syndros, which contain dronabinol (synthetic THC), and Cesamet, which contains nabilone (a synthetic substance similar to THC). Dronabinol and nabilone are used to treat nausea and vomiting resulting from cancer chemotherapy. Dronabinol is also used to treat loss of appetite and weight loss in people with HIV/AIDS.
VI. CANNABIS FOR CHRONIC PAIN
Despite the federal designation, studies have been conducted investigating the efficacy of cannabis for chronic pain patients. In a 2017 survey, 984 chronic pain patients, including those with neuropathic pain, back pain, arthritis, postsurgical pain, headaches and abdominal pain, were evaluated. Two-thirds of patients reported pain relief as the main benefit of cannabis use. Improved sleep was the second most commonly reported benefit. The primary negative theme among these patients was the cost associated with medicinal cannabis. Other negative themes associated with medicinal cannabis use among these patients were adverse effects of the marijuana and perceived bias against its use. (Piper et al., Chronic pain patients’ perspectives of medical cannabis (July 2017) Pain, pages 3–6.)
In another study, chronic pain patient participants who used medical marijuana had a 64 percent reduction in opioid use. These patients experienced fewer side effects and improved quality of life. Unlike opioids, marijuana does not cause respiratory depression, thus leading to lower mortality rates. (Boehnke, et al., Medical Cannabis Use Is Associated With Decreased Opiate Medication Use in a Retrospective Cross-Sectional Survey of Patients With Chronic Pain (June 2016).)
VII. WORKERS’ COMPENSATION TREATMENT OF CANNABIS
To comprehend the legality of prescribing and approving or rejecting cannabis in a workers’ compensation claim, it is important to understand the legal framework underpinning the way a requested medical treatment is processed in California.
Pursuant to Labor Code section 4600(a), an injured worker is entitled to:
Medical, surgical, chiropractic, acupuncture, and hospital treatment, including nursing, medicines, medical and surgical supplies, crutches, and apparatuses, including orthotic and prosthetic devices and services, that is reasonably required to cure or relieve the injured worker from the effects of his or her injury shall be provided by the employer.
Moreover, Labor Code section 4600(b) provides:
…medical treatment that is reasonably required to cure or relieve the injured worker from the effects of his or her injury means treatment that is based upon the guidelines adopted by the administrative director pursuant to Section 5307.27.
Finally, Labor Code section 5307.27(a) provides for the adoption of the MTUS:
The administrative director, in consultation with the Commission on Health and Safety and Workers’ Compensation, shall adopt, after public hearings, a medical treatment utilization schedule, that shall incorporate the evidence-based, peer-reviewed, nationally recognized standards of care recommended by the commission pursuant to Section 77.5, and that shall address, at a minimum, the frequency, duration, intensity, and appropriateness of all treatment procedures and modalities commonly performed in workers’ compensation cases. Evidence-based updates to the utilization schedule shall be made through an order exempt from Sections 5307.3 and 5307.4, and the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), but the administrative director shall allow at least a 30-day period for public comment and a public hearing. The administrative director shall provide responses to submitted comments prior to the effective date of the updates. All orders issued pursuant to this subdivision shall be published on the Internet Web site of the Division of Workers’ Compensation.
That website is https://www.dir.ca.gov/dwc/mtus/mtus.html.
Why does all of this matter? It matters because any treatment request in the California workers’ compensation system is evaluated for approval by the employer against the framework of the “evidence-based” medical (EBM) approach referenced in Labor Code section 5307.27(a). The evaluation is done through the employer’s Utilization Review (UR) process and, if the injured worker seeks it, through Independent Medical Review (IMR). (See generally Labor Code §§4610 and 4610.5.) The reviewer is to follow a hierarchy of evidence to guide decision-making (found at https://www.dir.ca.gov/dwc/medicalunit/toc.pdf).
In short, this decision-making process involves first checking whether the MTUS covers the condition and the recommended treatment. Then, if the MTUS does not address the condition or if the MTUS’ presumption of correctness is challenged, the second step is to search the American College of Occupational and Environmental Medicine or Official Disability Guidelines (ODG) to find recommendations. If these don’t provide support, the physician can search other EBM guidelines or current studies supporting the request.
VIII. REASONABLY REQUIRED STANDARD
With the legal framework of the EBM approach in mind, one can assess a request for cannabis in terms of whether it is reasonably required to cure or relieve an injured worker’s injury.
Admittedly, not very many examples are available, but the case of IMR Decision CM19-0016741 is illustrative. (84 Cal.Comp.Cases 465.) The case involved a 65-year-old injured worker with a January 15, 2000, date of injury. The diagnoses included degeneration of the lumbar or lumbosacral intervertebral disc, degeneration of the cervical intervertebral disc, brachial neuritis or radiculitis, neck sprain, cervical spondylosis without myelopathy, neck pain, spasms of muscle and spondylosis of unspecified site without mention of myelopathy. Treatments and evaluations included physical therapy, aqua therapy, massage therapy, acupuncture, yoga, Effexor, Norco, topical cream and ibuprofen. The request for authorization was for a referral to a pain physician who specializes in prescribing cannabis for pain control. UR non-certified the request.
The IMR review noted that the 2017 MTUS is silent regarding cannabinoids. The review also noted that the ODG states that cannabis is not recommended for pain relief. The reviewer went on to provide:
As of August 2014, 23 states and DC have enacted laws to legalize medical marijuana (Markoff, 2014), but there are no quality studies supporting cannabinoid use, and there are serious risks. Restricted legal access to Schedule I drugs, such as marijuana, tends to hamper research in this area. It is also very hard to do controlled studies with a drug that is psychoactive because it is hard to blind these effects. At this time, it is difficult to justify advising patients to smoke street-grade marijuana, presuming that they will experience benefit, when they may also be harmed. (Mackie, 2007) (Moskowitz, 2007) One of the first dose-response studies of cannabis in humans has found that mid-range doses provided some pain relief, but high doses appeared to exacerbate pain. (Wallace, 2007)
Furthermore, the IMR reviewer provides:
The medical documentation provided for review indicates this injured worker (IW) is currently undergoing treatment for degeneration of lumbar or lumbosacral intervertebral disc, degeneration of cervical intervertebral disc, brachial neuritis or radiculitis, neck sprain, cervical spondylosis without myelopathy, neck pain, [spasms] of muscle, and spondylosis of unspecified site without mention of myelopathy. Guidelines recommend against the use of Cannabinoids for chronic pain. The treating physician has not provided rationale to go against guideline recommendations. As such, the request for Referral to pain physician who specializes in cannabis prescribing for pain control is not medically necessary at this time.
In this instance, the IMR reviewer went through the EBM hierarchy and concluded that the request for a pain physician who specializes in cannabis was not reasonably required. However, as this article has demonstrated, studies not discussed in this review exist addressing chronic pain and the usage of cannabis. Moreover, as the legal landscape changes, especially with a possible re-designation of cannabis from Schedule 1 status, more research is likely to be conducted that a UR/IMR reviewer can review, as part of the EBM hierarchy of evidence, to support a finding of medical necessity.
IX. PAYMENTS FOR CANNABIS TREATMENT
Assuming a finding of medical necessity could be made, can the employer be required to pay for cannabis treatment? This is a hotly litigated topic in the United States. The legal argument by employers is that it is a violation of the Controlled Substances Act to reimburse or pay for cannabis for the treatment of an injured worker and that state laws are preempted by this Act.
In short, there is a split in the states. Recently, the matter was submitted to the United States Supreme Court in the case of Musta v. Mendota Heights Dental Ctr., 2022 U.S. LEXIS 1036. That case involves the state of Minnesota, in which the state supreme court ruled that the Controlled Substances Act preempted a state order requiring reimbursement for medical cannabis. The injured worker in that case argued to the U.S. Supreme Court that two state supreme courts, in New Hampshire and New Jersey, had found that federal law did not preempt the states. However, the U.S. Supreme Court declined review of the matter.
This direct question about the Controlled Substances Act and preemption has not worked its way through the WCAB and court system in California. However, employers have used a different, potentially less thorny legal argument to oppose reimbursement, and that is California Health and Safety Code section 11362.785(d), which, as part of the legal medicinal cannabis framework in California, provides:
This article does not require a governmental, private, or any other health insurance provider or health care service plan to be liable for a claim for reimbursement for the medicinal use of cannabis.
There is a WCAB panel decision that partially addressed this issue and the argument, by a defendant, of no liability. In Cockrell v. Farmers Insurance, 2015 Cal.Wrk.Comp. P.D. LEXIS 95, the judge issued a finding and award for reimbursement of self-procured medically recommended cannabis.
The defendant argued this finding and award were in error because of California Health and Safety Code section 11362.785(d). On review, the WCAB commented:
[P]arties and the WCJ did not analyze the issue of whether a workers’ compensation insurer constitutes a “health insurance provider” for the purposes of Health and Safety Code section 11362.785(d).
The WCAB noted, with a rather complex statutory discussion that is omitted in this article, that the medical cannabis program in the state of California does not appear to specifically define the term health insurance provider, and whether a workers’ compensation insurance company came within that definition was an open question. The WCAB reversed the judge’s finding and award and returned the matter to the trial level for the parties to analyze the issue in a manner consistent with the WCAB’s comments, but the WCAB stated specifically, “We take no position on this issue.”
It is noteworthy that there are no subsequent proceedings in this matter that this author can locate. It is fair to assume, given that this was a 2015 case, that the parties informally resolved the matter, without further litigation and briefing. At this point, the issue of payment remains an open legal question.
X. CONCLUSION
Were you able to answer the two questions from the beginning of this article? Can an injured worker get cannabis for treatment in a workers’ compensation claim? Can the employer be made to pay for it? As this article has demonstrated, the answer to each is, it’s complicated. However, the article presents the framework for parties to navigate these questions.
Randy Pollak is the managing partner for Wintersteen | Casarez Law Corporation in Southern California. He is a Certified Specialist in Workers’ Compensation Law and the former managing editor of Workers’ Compensation Quarterly, a publication of California Lawyers Association’s Workers’ Compensation Section.