NM Court Limits Cannabis Reimbursement to Amount Set in Fee Schedule

In an unpublished opinion, the Court of Appeals of New Mexico affirmed a decision by a state workers’ compensation judge that denied an injured worker’s request for full reimbursement of out-of-pocket costs for medical cannabis used in connection with his injury [Barrozo v. Albertson’s, Inc., 2022 N.M. App. Unpub. LEXIS 372 (Oct. 11, 2022)]. The court acknowledged that N.M. Stat. Ann. § 52-1-49 obligated employers to provide their workers with health care services following work-related injuries including, under appropriate circumstances, medical cannabis expenses. It held, however, that such reimbursement was limited to the amount allowed under the health care provider fee schedule established by the Workers’ Compensation Administration pursuant to N.M. Stat. Ann. § 52-4-5(A) and § 11.4.7.9(D) NMAC of the administrative code.

Background

The worker suffered a work-related injury to his wrists and elbows and was awarded employer-paid benefits, including ongoing medical care. He qualified for medical cannabis pursuant to the Lynn and Erin Compassionate Use Act and bought a quantity of medical cannabis for $453.05. He sought reimbursement from his employer through its workers’ compensation insurer. The employer/Insurer reimbursed the worker $108.18, the amount allowed under the health care provider fee schedule. The worker then filed a request with the Administration seeking the difference between the amount he paid and the amount he was reimbursed. After a hearing, the WCJ denied his request.

Appellate Court’s Discussion

The court acknowledged that in Vialpando v. Ben’s Auto. Servs., 2014-NMCA-084, ¶ 5, 331 P.3d 975, the court had interpreted “health care services” in Section 52-1-49(A) to include the use of medical cannabis. Vialpando also indirectly recognized that reimbursement to an injured worker—as opposed to direct payment to a health care provider—was an avenue through which an employer would cover the costs of the drug. The court stressed that while Vialpando paved the way for workers to be reimbursed by employers for their medical cannabis purchases, it did not address whether such reimbursements were subject to cost limits.

The court addressed the employer’s argument—that Section 52-4-5 requires the Administration to establish, and give effect to, pecuniary caps on the “health care services” referred to in Section 52-1-49(A). Specifically, Section 52-4-5(A) requires the Administration to “adopt and promulgate regulations establishing a schedule of maximum charges as deemed necessary for treatment or … service … provided by a health care provider.”

Pursuant to Section 52-4-5(A), and in response to Vialpando, the Administration promulgated 11.4.7.9(D) NMAC and established the maximum allowable payment for medical cannabis in the fee schedule. The court indicated that it understood that the worker had again contended that the word “provide” in Section 52-1-49(A) required the employer to reimburse the worker the full amount paid for medical cannabis. The court said, however, that this “reiteration” did little to persuade the court that the employer/insurer’s statutory construction was flawed or that the WCJ erred. The worker had not explained how the the employer/insurer had failed to provide medical services. Reimbursement here was limited to the amount set in the fee schedule.