Pennsylvania court clarifies if CBD should be covered under workers' comp

In a case involving a workers’ compensation attorney who was injured on the job, a Pennsylvania appeals court answered whether cannabidiol (CBD) oil qualifies as a substance that can be reimbursed for workers’ compensation purposes.

In a Nov. 14 opinion, a split en banc Commonwealth Court panel clarified that CBD oil is a supply under the Workers’ Compensation Act for which employers must reimburse. The 7-2 ruling reversed the Workers’ Compensation Appeal Board’s order, which had reversed a judge’s decision that had determined CBD oil to be a medicine and a supply for purposes of Section 306(f.1)(1)(i) of the act.

The Commonwealth Court majority ruled that the board had improperly engaged in its own fact finding, and erred in “expressly refusing” to define whether CBD oil is a medicine or supply under the act.

Further, the court said the board erred in “concluding it would violate federal law to direct an insurer to reimburse a claimant for CBD oil,” ”theorizing about the effect on insurers if 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.”

Judge Anne Covey, who wrote the majority’s precedential opinion, was joined by Judges Renee Cohn Jubelirer, Michael Wojcik, Ellen Ceisler and Stacy Wallace, who also submitted her own concurrence. Judge Christine Fizzano Cannon wrote a dissent, which Judge Lori Dumas joined.

The dispute stemmed from attorney Mark Schmidt of Schmidt, Kirifides and Rassias sustaining a back injury when he tripped over his trial bag while loading in files. Schmidt’s doctor gave him prescriptions for various medications, and later prescribed CBD oil to avoid increasing the dosage for his other medications and to stall the need for surgery.

After Schmidt supplied his employer with his CBD oil prescription and receipts, it refused to reimburse him on the basis that the oil isn’t a pharmaceutical drug. Schmidt filed a penalty petition.

The workers’ compensation judge reviewing the case concluded that the firm had to pay the costs of Schmidt’s CBD oil because it was a medical supply under the act and part of his “reasonable and necessary medical treatment.”

The judge, however, didn’t assess penalties against the firm.

On appeal, the review board held that the CBD oil couldn’t “be a reasonable and necessary medical treatment where the [U.S. Food and Drug Administration] had issued several warning letters to firms marketing CBD products for violating federal law, including the Federal Food, Drug, and Cosmetic Act.”

After Schmidt appealed to the Commonwealth Court, the majority determined the board “completely disregarded [the judge]’s findings of fact, which are supported by substantial evidence, and proceeded to do its own fact finding to support its preferred conclusions.”

The court also agreed with Schmidt that the board erred in refusing to define whether CBD oil was a medicine or supply within the meaning of the act, and said prescribing CBD did not violate federal law.

“The fact that some firms marketing CBD products may violate federal law, and/or selling approved products with unsubstantiated therapeutic claims violates federal law, does not make claimant’s use or employer’s reimbursement for CBD oil illegal,” Covey said. “There was no record evidence that the CBD oil claimant used is illegal under federal law. Because the board is not the fact-finder, any conclusion it made to the contrary exceeded its authority.”

The board also improperly focused on “possible” impact to insurers, Covey said.

In her dissent, Fizzano Cannon argued that CBD oil wasn’t subject to reimbursement under the act as the oil “cannot be marked for a therapeutic purpose” without premarketing approval from the FDA, and Schmidt’s “oral use of CBD oil as a treatment for pain is not legal,” claiming it hasn’t been approved by the FDA.

Wallace’s concurrence argued that CBD oil should be considered a medicine rather than a supply.

Schmidt, who represented himself, did not immediately respond to a request for comment.

Schmidt Kirifides’ attorney, John Francis Kennedy of Elias Mickle Kennedy, declined to comment.

Related: 

• Side effects may vary: Medical marijuana’s unintended impact on workers’ comp
• Side effects may vary: Medical marijuana’s unintended benefits to workers’ comp
• Exploring the impact of legalized cannabis on P&C insurance

ALM has created the six-part Cannabis Insurance Coverage Specialist (CICS) designation, which addresses insurance issues surrounding cannabis, risk management, insurance claims, real estate, workers’ compensation and banking. To purchase the designation or individual courses or to learn more, visit www.coveragespecialist.com/CICS or contact Johanna Abshear at jabshear@alm.com.