A police officer [Claimant] had established two workers' compensation claims. Following years of treatment, which included physical therapy, surgeries and various prescription pain medications, and a subsequent diagnosis of chronic regional pain syndrome of the right upper extremity, a Workers' Compensation Law Judge [ALJ] classified Claimant as permanently partially disabled and apportioned liability for indemnity benefits and medications between the two claims. Claimant continued receiving treatment with varying degrees of success, and his use of prescription pain medications continued to increase.
Ultimately Claimant, after years of treatment with opiate pain medications, began being treated by a pain management specialist [Specialist]. Specialist continued Claimant on his regimen of, among other medications, Oxycontin and Oxycodone to treat his pain but subsequently certified Claimant for use of medical marihuana pursuant to Public Health Law Article 33, Title V-a, also referred to as New York's "Compassionate Care Act."
Specialist then filed a NYS Workers Compensation MG-2 variance form requesting authorization to use medical marihuana to treat Claimant's chronic pain resulting from his work-related injuries. The Employer and its workers' compensation carrier [Carrier] denied the request. Although the Workers' Compensation Board [Board] initially sustained the denial, in response to Claimant's request for further action, the Board rescinded its earlier decision and continued the case for a hearing.
Following a hearing the Worker's Compensation Law Judge approved the variance request for medical marihuana treatment as apportioned, and instructed Carrier to pay for such treatment. Upon administrative review, the Board, among other things, sustained the request for the variance.
Employer and Carrier appealed the Board's decision, contending that the requirement that Carrier provide insurance coverage for Claimant's medical marihuana expenses under the Compassionate Care Act conflicted with the Controlled Substances Act and, in light thereof, the Compassionate Care Act was preempted by federal law.
The Appellate Division disagreed, finding that the Board's decision to grant the requested variance to treat Claimant's chronic pain with medical marihuana was supported by substantial evidence and declined to disturb it.
The court explained that the federal preemption doctrine has its roots in the Supremacy Clause of the United States Constitution, and federal preemption of state laws generally can occur in three ways:
1. Where Congress has expressly preempted state law;
2. Where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law; or
3. Where federal law conflicts with state law.
In the eyes of the court, the issue was one of "conflict preemption. Referring to Balbuena v IDR Realty LLC, 6 NY3d 338, the Appellate Division opined that "conflict preemption" occurs "when compliance with both federal and state law is a physical impossibility, or where the state law at issue ... stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."
Noting that neither the Compassionate Care Act nor Workers' Compensation Law §13(a) requires a workers' compensation carrier to manufacture, distribute or possess marihuana, the Appellate Division indicated that all that is required of the Carrier in this instance is its reimbursing Claimant's monetary costs associated with the medical marihuana obtained from his or her medical practitioner, an activity that is not expressly prohibited under the Controlled Substances Act.
Moreover, opined the Appellate Division, reimbursing a claimant "does not serve to subvert, in any way, the principal purposes of the Controlled Substances Act in combating drug abuse and controlling 'the legitimate and illegitimate traffic in controlled substances,' particularly where, as here, [Claimant] was validly prescribed and authorized to use medical marihuana by his pain management specialist to both treat his chronic pain and reduce his reliance on opiates."
Addressing another conundrum, the Appellate Division pointed out that "even assuming, without deciding, that [Claimant's] procurement and possession of medical marihuana under the Compassionate Care Act is illegal under the Controlled Substances Act, any such criminal transaction in this regard is necessarily completed prior to any request being made for reimbursement from the carrier; thus, as 'one cannot aid and abet a completed crime' ... the [Carrier] cannot be said to be aiding and abetting a crime and/or engaging in a conspiracy to commit same."
Holding that Carrier can comply with the State's statutory scheme without running afoul of federal law, the Appellate Divisions concluded that it could not find any conflict between the Controlled Substances Act and either the Compassionate Care Act or Workers' Compensation Law §1(a) with regard to Carrier's obligation to reimburse Claimant for his medical marihuana expenses.
Addressing and disposing of additional arguments raised by Employer and Carrier, the court cited Public Health Law §3368(2), which provides as follows:
Nothing in this title shall be construed to require an insurer or health plan under [the Public Health Law] or the [I]nsurance [L]aw to provide coverage for medical marihuana. Nothing in this title shall be construed to require coverage for medical marihuana under [Public Health Law article 25 (maternal and child health)] or [Social Services Law article 5 (public assistance)].
However, said the Appellate Division, "[a]ccording to its express terms, the provided exemption from coverage for medical marihuana expenses pertains only to three chapters of law: the Public Health Law, the Insurance Law and the Social Services Law. No reference is made in the text of the statute to an exemption from coverage under the Workers' Compensation Law.
The Appellate Division then observed that "If the Legislature intended for said exemption to apply to workers' compensation insurance carriers, it certainly could have included such language in the text of the statute; it chose not to."
Finding that the Board properly granted Claimant's request for a variance and that the Public Health Law and its accompanying regulations authorize the use of medical marihuana to treat certain enumerated and serious conditions, including - as relevant here - chronic pain, the court observed that the Workers' Compensation Law also requires that treatment be rendered in accordance with its Medical Treatment Guidelines.
Citing 12 NYCRR 324.2[a], the court explained that in the event a medical provider determines that medical care that varies from the Medical Treatment Guidelines is warranted, he or she "shall request a variance from the insurance carrier" by submitting such request in the prescribed form. Although "the burden of proof to establish that a variance is appropriate for a claimant and medically necessary shall rest on the treating medical provider requesting the variance," if the Board's decision is supported by substantial evidence, the Appellate Division held that it would not be disturb.
In this instance the court determined that the Board's decision to grant the requested variance to treat Claimant's chronic pain with medical marihuana was supported by substantial evidence and sustained it.