CBD Oil is Payable Under PA Workers’ Compensation

We often have issues regarding whether a particular medical expense is payable by the workers’ compensation insurance carrier.  The issue could be whether it is a “medical” treatment at all, whether it is related to the work injury, or whether it is “reasonable or necessary.”  A recent case from the Commonwealth Court of Pennsylvania examined a few of these issues.

In M.R. Schmidt v. Schmidt, Kirifides and Rassias, PC (Workers Compensation Appeal Board), the injured worker (Claimant) suffered an “aggravation of a preexisting degenerative disc disease at the levels of L4-5 and L5- S1 with radiculopathy” while he was loading files into a bag.  The injured worker litigated, and won, a Claim Petition to have this injury accepted as compensable.  Despite his injury, Claimant continued to work with the assistance of pain management.  In an effort to avoid increasing the amount of Oxycodone and/or OxyContin he was taking, the pain management physician prescribed cannabinoid (CBD) oil.  Since the dosages of the opioids has not been increased again, and Claimant has been able to avoid surgery, the use of CBD oil appears to have been successful.

The Pennsylvania Workers’ Compensation Act (Act) requires that the insurance carrier pay for all reasonable and necessary medical treatment related to the work injury.  As such, Claimant provided the insurance carrier with the prescription for the CBD oil, as well as his out-of-pocket receipts.  The insurance carrier refused to reimburse these expenses, alleging that CBD oil is not a “pharmaceutical drug.”  As a result, Claimant filed a Petition for Penalties.

After hearing the evidence, the Workers’ Compensation Judge (WCJ) granted the Petition for Penalties and ordered the out-of-pocket expenses related to the CBD oil to be paid by the insurance carrier (though no penalty was assessed).  The WCJ found that the CBD oil was a medical supply and was prescribed as part of the treatment for a work-related injury.  As such, the WCJ found that it would be payable under the Act.

This decision was appealed by the insurance carrier to the Workers’ Compensation Appeal Board (WCAB), who reversed the decision of the WCJ.  According to the WCAB, CBD oil cannot be a reasonable and necessary medical treatment because the FDA has issued warning letters to firms marketing CBD products for violating federal law.  This, said the WCAB, means, “Finding a violation here is concomitant to compelling an employer to violate [f]ederal law.”

Claimant filed an appeal to the Commonwealth Court of Pennsylvania, which reversed the WCAB and found the decision of the WCJ was correct and should stand.  Initially, the Court noted that under the Act, “the employer must pay the claimant’s medical bills within 30 days of receiving them, unless the employer disputes the reasonableness and necessity of the treatment.”  If there is a dispute as to reasonableness and necessity, that must be addressed by Utilization Review (UR).

The WCJ found that the low back injury was accepted, that the CBD oil was prescribed to treat this injury, that CBD oil is a supply for which Employer is responsible to pay under the Act, that Claimant submitted receipts for his payment for the CBD oil, and that the insurance carrier did not properly reimburse Claimant.  Since evidence supports all of these findings, the decision of the WCJ was proper and should not have been disturbed by the WCAB.  In reversing the decision, the WCAB disregarded these supported Findings of Fact.

The insurance carrier had argued before the Court that CBD oil is not a “medicine” or “supply”, to require reimbursement.  After analysis, the Court held that CBD oil is both a medicine and a supply, and does require reimbursement.  As to whether CBD oil need not be reimbursed since it is not approved by the FDA, the Court explained such an analysis can only be addressed through the Utilization Review process, which was not initially sought in this case (UR was later sought, and the CBD oil was found to be reasonable and necessary).

The insurance carrier then argued that reimbursement was not required because Claimant failed to submit the appropriate forms and records, as required for a “provider” to be paid under the Act.  The Court agreed that the WCJ was correct in her decision – since Claimant is not a “provider,” he need not comply with that Section of the Act.  Instead, all that was required to be submitted was the doctor’s prescription for CBD oil to treat the pain caused by his work injury, and the receipts for the purchase of the CBD oil.  This was done by the Claimant.

The mere fact the FDA warned some marketers regarding the sale of CBD oil does not make reimbursement inappropriate.  The CBD oil is legally sold in Pennsylvania.  Evidence supports the WCJ’s Findings of Fact that the CBD oil was prescribed and used to treat the work injury.  The WCAB erred in concluding requiring reimbursement would violate Federal Law.  Indeed, there is no prohibition on such reimbursement.

Concerns raised by the WCAB about the impact reimbursement would have on the insurance industry were erroneous and misplaced.  As the Court explained, “Accordingly, the Board erred by theorizing about the effect on insurers if they are required to pay for over-the-counter medicines or supplies, and disregarding the Act’s humanitarian objectives regarding Claimant’s right to treatment and the goal of enabling injured workers to return to/continue to work.”

As attorneys who represent injured workers, we appreciate the decision of the Commonwealth Court of PA.  We note that, despite the work injury, Claimant here continued to perform his employment, partially through the assistance of the very treatment the insurance carrier fought against.  While we find the thought process of the insurance carrier short-sighted and completely illogical, what we think is rather moot.  On the other hand, since the Court essentially agreed, it appears logic and justice prevailed.

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