November 20, 2023

WORKERS’ COMPENSATION ALERT Commonwealth Court clarifies that CBD Oil should be covered under the Pennsylvania Workers’ Compensation Act

A case from the Commonwealth Court of Pennsylvania on November 14, 2023 examined the issue of whether cannabidiol (CBD) oil qualifies as a substance to be covered under the Workers’ Compensation Act. In M.R. Schmidt v. Schmidt, Kirifides and Rassias, PC (Workers Compensation Appeal Board), the injured worker (an attorney) tripped over his trial bag and sustained a back injury. The injured worker representing himself against his law firm, 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 OxyContin, the pain management physician prescribed CBD oil.  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, contending that CBD oil is not a “pharmaceutical drug.”  As a result, Claimant filed a Petition for Penalties. The Workers’ Compensation Judge granted the Petition for Penalties and ordered the out-of-pocket expenses related to the CBD oil to be paid by the insurance carrier, but did not access a penalty. The WCJ found that the CBD oil was a medical supply, was prescribed as part of the treatment for a work-related injury and would be payable under the Act.

The WCJ decision was appealed by the insurance carrier to the Workers’ Compensation Appeal Board who reversed. The WCAB determined that 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.  Claimant filed an appeal to the Commonwealth Court of Pennsylvania.

The Court reversed the WCAB and found the decision of the WCJ was correct. The Court reasoned that the Pennsylvania Workers’ Compensation Act requires that the insurance carrier pay for all reasonable and necessary medical treatment related to the work injury.  The Court noted 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.  The Court held that 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 WCJ decision, the Court noted that the WCAB disregarded these supported Findings of Fact.

Interestingly, the Court rejected the insurance carrier argument that CBD oil is not a “medicine” or “supply”, to require reimbursement under the Act.  After analysis, the Court held that CBD oil is both a medicine and a supply, and does require reimbursement.  Since Claimant was not a “provider” to be paid under the Act, the Court agreed that the WCJ was correct that Claimant only needed to submit 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.  The Court noted this was done by the Claimant for reimbursement. The Court reasoned that the mere fact the FDA warned some marketers regarding the sale of CBD oil does not make reimbursement inappropriate since CBD oil is legally sold in Pennsylvania.  The Court held that evidence supported the WCJ’s Findings of Fact that the CBD oil was prescribed and used to treat the work injury. So, the WCAB erred in concluding requiring reimbursement would violate Federal Law. Finally, the Court cited the Act’s humanitarian objectives regarding Claimant’s right to treatment and the goal of enabling injured workers to return to and continue to work.

In this split 5-2 en banc ruling, the Court’s majority determined CBD oil to be a medicine and supply for reimbursement purposes of Section 306(f.1)(1)(i) of the Act. The Court’s Dissent argued that CBD oil was not subject to reimbursement under the Act since it is not a legal treatment for pain and has not been approved by the FDA. A major takeaway is that the Court strongly affirmed the role of workers’ compensation judges as exclusive fact-finders in reviewing claims and stressed that neither the Workers’ Compensation Appeal Board nor this Court has authority to reweigh the evidence. In this case, the Court has agreed with the Judge and liberally construed “medicine” and “supply” to include CBD oil. Finally, the Court commented that the Act’s Utilization Review process is the appropriate place for disputes over whether treatments are reasonable and necessary.

Zachary M. Rubinich is a partner in our Philadelphia office. He focuses his practice on the defense of insurance carriers, self-insured entities and third-party administrators against workers’ compensation claims in Pennsylvania. Based on his extensive experience, the Pennsylvania Bar Association Workers’ Compensation Law Section has certified him as Specialist in the practice of workers’ compensation law Zach has handled all aspects of litigation before workers’ compensation judges, the Workers’ Compensation Appeal Board, the Commonwealth Court and the Pennsylvania Supreme Court. Zach has been appointed to the following American Bar Association Tort Trial and Insurance Practice (TIPS) leadership positions: Chair-Elect of the Litigation and Trial Practice Committee; Vice-Chair of the Appellate Advocacy Committee; member of the Ethics and Professionalism Standing Committee; and member of the CLE Board Committee. He is the Past Chair of the ABA’s Tort Trial and Insurance Practice (TIPS) Workers’ Compensation and Employers’ Liability Law Committee from 2018-2019. He served as Vice-Chair of this committee for 2015 to present. In addition, Zach served as Vice-Chair of the 2017-2018 American Bar Association Standing Committee for Diversity and Inclusion. He is also a Committee Member of the ABA’s Legal Opportunity Scholarship Fund. Zach has been rated AV Preeminent by Martindale-Hubbell for the twelfth consecutive year for 2024. He has been selected as a 2019, 2020 and 2021 Pennsylvania Super Lawyer by Super Lawyers. He was selected as a Pennsylvania Rising Star by Super Lawyers from 2010 to 2014. He was selected as an International Advisory Experts (IAE) Award recipient in 2019 for his accomplishments as a workers’ compensation attorney in Pennsylvania. Zach has been selected as a Fellow of the College of Workers’ Compensation Lawyers Class of 2020. Mr. Rubinich was recognized as a Main Line Today 2023 Top Lawyer.

Zach can be reached directly at: (215) 575-4340 •

Workers’ Compensation Section

CHAIR: Claudio J. DiPaolo
PARTNERS: Zachary M. Rubinich; J. Brendan O’Brien; Richard B. Polner
OF COUNSEL: Christian M. Stein, Edward J. Chiodo; Delia A. Clark; James Curry; Daniel Spafford, Jennifer Schwartz
ASSOCIATES: Mary Bergmann, Iyanna Greene 

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