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Top court to decide on issue of medical pot and workers' comp

New Hampshire Union Leader

July 09. 2018 10:54PM

CONCORD — A case now working its way through the state Supreme Court could determine if insurers have to pay for medical marijuana in workers’ compensation cases, even though state law exempts health insurance companies from covering the cost of therapeutic cannabis.

On one side are attorneys for an injured worker who say he is entitled to the coverage because workers’ compensation operates differently than health insurance, and the Legislature did not exempt workers comp carriers from medical marijuana claims.

Lawyers for the insurance company, with the support of the N.H. Compensation Appeals Board, argue they would face prosecution under federal law if they paid for a federally illegal drug.

Four of the five state Supreme Court justices recently heard the appeal of Andrew Panaggio, a former employee of the W.R. Grace Company who suffered a serious job-related back injury in 1991, and settled his workers’ compensation claim in 1997.

He is considered permanently disabled, having undergone several back surgeries, and was for years prescribed opioids for pain relief, which were fully covered by his workers compensation claim.

By 2015, however, he had developed a stomach condition that made regular opiate use difficult. When the state’s medical marijuana dispensaries opened in 2016, he was certified for the program by his primary care provider.

He purchased 14 grams of therapeutic cannabis at Sanctuary ATC in Plymouth and sent the bill for $170 along with qualifying paperwork to his workers compensation insurance carrier, which denied the claim on the basis that medical marijuana was not “reasonable, necessary or casually related to the injury,” according to court documents.

Decision appealed

Panaggio appealed that decision to the 32-member Compensation Appeals Board, which held last year that his use of therapeutic cannabis is medically necessary and related to his work injury.

But by a two-to-one margin, the board declined to order reimbursement, citing federal law that still makes marijuana illegal and the state’s exemption for health insurance companies in the Therapeutic Cannabis Act.

In a highly unusual move, the minority on the board issued a written dissent. Panaggio, represented by the law firm of Shaheen and Gordon in Manchester, appealed to the Supreme Court, which heard oral arguments on June 14.

“If we are ordered to pay, we would face the untenable choice of adhering to this court’s order and knowingly violating federal law every time that employee purchases and uses marijuana,” said Boston attorney Robert Martin, representing the insurance company.

While all states with legal medical marijuana have a carve-out for health insurance companies, some also explicitly added workers compensation to the exemption, but New Hampshire did not.

“States that bar reimbursement of medical marijuana specifically for injured workers, rather than for all purposes, have done so explicitly,” according to Panaggio’s attorney, Jared O’Connor. “Even if state law does prohibit reimbursement, it does so only as to health insurance providers and similar entities, and does not extend to casualty insurers like workers’ compensation carriers.”

No record of prosecution

According to O’Connor, the claim of the insurance company that it could face federal prosecution under the Controlled Substances Act is not supported by public record or precedent.

“For nearly a decade, the U.S. Department of Justice had declined to prosecute state-regulated marijuana markets, both recreational and medical,” according to O’Connor. “Even a theoretical threat of prosecution remains prohibited by Congressional restrictions on DOJ funding, maintaining a judicially enforced safe harbor for states that have approved and regulate medical marijuana.”

Martin argued that while the Obama administration turned a blind eye to enforcement in legal marijuana states, “the current administration under President Trump has clearly indicated a renewed effort and policy to prosecute such crimes. Thus an order against the insurer would force the insurer to be in express violation of federal law and open the insurer to federal prosecution.”

Tough questioning

Questioning by the four justices (Chief Justice Robert Lynn recused himself from the case) suggested some skepticism about the insurance company’s argument.

Newly appointed Associate Justice Patrick Donovan asked Martin if he could point to a single case of federal prosecution under similar circumstances since medical marijuana first became legal in the mid-1990s; Martin could not.

Associate Justice Anna Barbara Hantz Marconi pointed out that “Workers’ compensation is subject to a separate regulatory scheme than health insurance, right?”

The court is not expected to issue a decision until later in the year.

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