State News : Pennsylvania

The Pennsylvania Supreme Court issued a recent decision on 03/20/25 relative to the case of Schmidt v. Schmidt, Kirifides & Rassias, PC (WCAB), No. 32 MAP 2024, 2025 WL 864223 (Pa. Mar. 20, 2025) which may significantly impact payment for “medical treatment” in Pennsylvania.  This decision pertained to reimbursement to a Claimant for CBD oil which was purchased on account of the work injury.  The Court affirmed the Commonwealth Court, which required the employer pay for the claimant’s CBD oil.  Further, the Pennsylvania Supreme Court set forth a broader interpretation of what constitutes “medicine and supplies” under Section 306(f.1)(1)(i) of the Act.  More significantly, and troubling from the defense perspective, the Court found that the cost-containment provisions of the Act apply to providers, they do not apply to the Claimant.

The Claimant in this matter is a workers’ compensation claimant’s attorney who injured his low back putting files into a bag. Instead of proceeding to incase his use of opioids, the Claimant elected to use CBD oil, which he indicated proved effective in managing his pain.  This also led to less narcotics and avoiding surgery.  There are questions from reading the decision if the recommended CBD oil was to be applied topically with the Claimant, then electing to get oral CBD oil.  The Claimant purchased this “medicine” at a natural remedy store and submitted the receipts for reimbursement which were not paid for by the Employer/Carrier on the basis that CBD oil was not a pharmaceutical drug.  The Claimant filed a penalty petition due to failure to pay for the treatment and penalties were awarded by the Workers’ Compensation Judge, who determined that CBD oil qualified as a “supply” under the Act and the Medical Cost Containment Regulations (MCCR), which require submission of a bill on a HCFA form and a corresponding medical report concerning the treatment, were not binding upon the Claimant.  These regulations also address re-pricing of medical treatment and have a provision that should a Medicare payment mechanism not exist for a particular treatment, accommodation or service, the amount of payment to be made to the healthcare provider is 80% of the usual and customary charge or the actual charge, whichever is lower. 

The Appeal Board was divided and reversed by finding that CBD oil was not a “supply” under the Act given it was not proven to be safe or effective by the FDA and because submission of a receipt did not trigger the payment obligation under the MCCR.  As previously intimated, the Commonwealth Court reinstated the Judge’s decision and found CBD oil was a medicine and supply as it was “prescribed” by the doctor’s office and managed the Claimant’s pain lessening opioid use and allowing the Claimant to avoid surgery.  The Court found there was no requirement for FDA approval of treatment under the Act and the billing requirements of the Act did not apply to the Claimant, who was not a healthcare provider. 

The Pennsylvania Supreme Court noted that the terms “medicines” and “supplies” was not defined under the Act.  It considered such words to be a singular phrase of “medicines and supplies” in undertaking its analysis.  Ultimately the Court felt this meant “any item that is part of a health care provider’s treatment plan for a work-related injury.” As for the FDA concerns, the Court indicated that such challenges are better left to be addressed via Utilization Review as to whether the treatment is reasonable and necessary.

This Decision is troubling given its potential implications moving forward.  The MCCR in Pennsylvania are now over 30 years old and it is well past time for them to be reviewed and revised so as to address changes in medicine and the current reality of medical care.  It is undeniable that the Workers’ Compensation Act requires payment for reasonable and necessary medical expenses which are causally related to the work injury.  Now, with where the Court has gone in terms of indicating that the MCCR do not apply to injured workers seeking reimbursement of “medicine and supplies”, the reasonableness and necessity portion of the Act has essentially been circumvented.  While the Court said that a Utilization Review should be pursued to address the issue of the lack of efficacy and approval by the FDA, the Defendant/Employer/Carriers have lost the opportunity to review treatment to determine if it is reasonable and necessary because the Court has said that the MCCR, which contain the provisions allowing for review of the reasonableness and necessity of treatment to not apply to the Claimant.

All that needs to happen is for a physician to not necessarily “prescribe” treatment but rather to just make a recommendation.  This can be for anything that could be a “medicine and supply”, CBD, medical marijuana, sleep aids such as beds, vitamins, hot tubs, etc. and if the Claimant then purchases the recommended “treatment” there is not a specific treatment that is subject to review (like 5 mg of Vicodin 4 x/day).  It is up to the Claimant to decide what he is to get and how much.  It is an extreme example but what would occur if a receipt was submitted for caseloads of CBD products where the volume would obviously not be able to be utilized except over years so that it was excessive so as to not be reasonable or necessary in terms of the amount.  There cannot be a utilization review filed on a Claimant and the medical provider, who does not write a specific prescription or even pick out the product or amount (where there is just a recommendation for CBD oil without more as to type, dosage, potency, frequency) as that is not something that is able to be reviewed.  

In the context of medical marijuana, it is the Claimant who picks everything.  They get approved for a card and then they pick out the amount, the form (vape, leaf, etc), the strain (potency), etc. the If the Claimant cannot be subject to a Utilization Review by a peer of the same medical specialty (as would we have Claimant’s then reviewing other Claimant), then the reasonableness and necessity of treatment cannot be reviewed and the Defendant/Employer/Carrier is now in a position where they may be required to pay for treatment, contrary to the Act, which is not reasonable and necessary.  The Court makes blanket statements about treatment needing to be paid for that is reasonable and necessary and that if there is a challenge a Utilization Review can be filed; however, it apparently does not know this is how the Act works in connection with the Medical Cost Containment Regulations.  The practical reality is, in this newly created situation of reimbursements to the Claimant, this is not something that works so that now there is no mechanism to address whether “treatment” to be reimbursed is reasonable and necessary and it cannot be re-priced.  If the Claimant gets something recommended by a doctor and submits a receipt, it apparently is now to be reimbursed or the Employer/Carrier may be subject to penalties even if the treatment is not reasonable and necessary because that cannot now apparently be addressed.    

The Commonwealth Court recently addressed the use of CBD oil in Schmidt v. Schmidt, Kirifides & Rassias, P.C., _ A.2d _ (Pa. Cmwlth. 2023).  There the claimant’s treatment for a back injury treatment was mostly pain management, for which he was prescribed various medications, and CBD oil.  The CBD oil was prescribed to avoid the use of increased narcotics.  The employer refused payment on the basis that CBD oil is not a pharmaceutical drug.  Consequently, the claimant filed a Penalty Petition.  The Workers’ Compensation Judge granted the Penalty Petition, concluding that the CBD oil was a medical supply under the Act, and was reasonable and necessary.  While the Judge ordered payment, she did not assess a penalty.

On appeal, the Workers’ Compensation Appeal Board reversed the decision and order of the WCJ.  The Board concluded that CBD oil could not be a reasonable and necessary medical treatment when the FDA has issued several warning letters to firms marketing CBD products for violating federal law.  The WCAB also reasoned that the claimant did not submit the required medical reports and forms to trigger the employer’s reimbursement obligations.  The claimant appealed to the Commonwealth Court.

As was the case in the medical marijuana decisions of Fegley and Appel, dealing with the issue of whether medical marijuana is payable as treatment for a work injury, the Commonwealth Court reversed the decision of the Board.  This decision, as did the medical marijuana reimbursement cases, reflected a lack of understanding by the Court regarding application of the Medical Cost Containment Regulations in Pennsyvlania.  If there is no submission of medical bills with reports, the time frame to issue payment under the Medical Cost Containment Regulations never starts to run.  In fact, in this matter, the claimant’s medical provider appears to have “prescribed” topical treatment and the Claimant, on his own volition, elected to change what was “prescribed” or recommended to be ingestible CBD oil.  Thus, the treatment that was subject to reimbursement may not have actually had been “prescribed” by the medical provider.

If all that is required is a “recommendation” by the medical provider for medical marijuana or a CBD product or any other potential treatment modality, do we no longer need to have specific prescription provided for this to be treatment for which a insurer/employer/carrier is required to issue payment for reimbursement?  Why are reimbursements to be treated differently than payment of a medical bill under the Act and Regulations?  A medical provider does not simply indicate in a note that he is prescribing or recommending “narcotics” or pain medication and the Claimant is then allowed to determine the type, dosage, and frequency of what pain medication they feel works best.  The narcotic medication is actually being prescribed by a physician in terms of type, amount, dosage and frequency. 

This may now not necessarily be the case in Pennsylvania with recent reimbursement cases being handed down by the Commonwealth Court.  The Court either did not consider this issue or lost sight of what actually happens when there is a prescription provided by a medical provider.  The Claimant now apparently simply gets “prescribed” medical marijuana or a CBD product and then has carte blanche to determine what he or she wants so as to obtain this “treatment” without any actual further guidance from his or her medical provider.

With narcotics or any other actual prescription, a Utilization Review can find it to be reasonable and necessary but at a lower dosage or frequency than what was actually prescribed by the treating physician if the matter is referred to utilization review.  With reimbursement cases, there will not be ongoing bills submitted along with office notes from the prescribing physician so as to trigger the time period to file for utilization review.   If the submission of the invoice by the Claimant is what triggers the need to file Utilization Review, it is the Claimant who is picking the strain and amount of medical marijuana or the type and amount of CBD product such that the Claimant may potentially be the “provider” subject to review since they are actually determining what is being purchased and used as “medical treatment” based upon a recommendation as opposed to an actual prescription.  If so, there is no reviewer of the same specialty, as is required to be the peer conducing Utilization Review, given the Claimant is not an actual medical provider such that a proper Utilization Review may not be able to be properly performed.  A Utilization Review of the “prescribing” doctor would not be able to comment on what is actually being prescribed if there is no actual prescription in terms of type, amount, dosage, frequency, which is what is present on a normal prescription should it be subject to utilization review.

Regardless of how one feels about the benefits of medical marijuana and CBD oil, there is an established body of law and procedures to deal with these very issues of prescription medication and recommended medical treatment. However, years established procedures are now being short-circuited by the Court in allowing for unregulated “prescriptions” and treatment in the form of medical marijuana and CBD products for which the employer is responsible.  This same issue could later be applied to other “treatment” modalities for which reimbursement is sought.  This could be recommendations for a “firm bed”, “soaking tub” or “transportation device” or other such “treatment” where the Claimant has carte blanch to interpret as they see fit and then seek reimbursement for what is “prescribed.”

Do any and all recommendations of a medical provider that result in the Claimant purchasing a something arguably related to treatment of a work injury now need to be reimbursed in Pennsylvania given the recent Court holdings concerning reimbursement or should payment for all medical treatment still be subject to the terms and provisions of the Act and corresponding Regulations before payment need be made for such “treatment”? The recent holdings are problematic as they allow for circumvention of the Act and Regulations and if they continue to be followed by the Court, can allow for potential abuses and deny Employers and Carriers the rights afforded under the Act and Regulations before payment is required to be remitted for treatment of a work-related injury.  The Pennsylvania Supreme Court has granted allowance of appeal in the Schmidt matter such that hopefully these issues can be further reviewed and properly addressed by the Court. 

Bradley R. Andreen, Esq.

Rulis & Bochicchio LLC 

In Fegley, as Ex'x of the Est. of Paul Sheetz, v. Firestone Tire & Rubber (WCAB), _ A.3d _ (Pa. Cmwlth. 2023) and Edward Appel v. GWC Warranty Corp. (WCAB), _ A.3d _ (Pa. Cmwlth. 2023), the Commonwealth Court held that workers’ compensation insurers must reimburse injured workers for medical marijuana where it has been determined that such treatment is related to the work injury and is reasonable and necessary.  The Court reversed the denial of the claimant’s penalty petition in spite of the employer’s objections that the Pennsylvania Medical Marijuana Act prohibited an insurer from covering the expenses for medical marijuana treatment and that marijuana is still an illegal, controlled substance under federal law.

As for the actual language of Section 2102 of the Medical Marijuana Act (MMA), the Court ruled that coverage is different and distinct from reimbursement and while the plain language of Section 2102 of the MMA states that insurers cannot be required to provide coverage for medical marijuana, there is no statutory language which prohibits insurers from reimbursing claimants who lawfully use medical marijuana to treat an accepted work injury when such treatment is medically reasonable and necessary.  So, carriers may not have to cover medical marijuana, but there is no language prohibiting them from reimbursing for medical marijuana.

As to the issue of the potential violation of federal law, the Court noted that Section 2013 of the MMA says that nothing in the MMA shall require an employer to commit any act that would put the employer or any person acting on its behalf (workers’ compensation carriers) in violation of federal law.  Under the Federal Drug Act, it is unlawful to “manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.”  Despite this plain language of the statute, the Commonwealth Court reasoned that reimbursing an injured worker his out-of-pocket expenses for medical marijuana does not require a workers’ compensation carrier to do any of these prohibited activities. Apparently, the long-stated legal maxim of “One cannot do indirectly what one cannot do directly” did not bother the court.

While the Court has split hairs relative to the issue of “coverage” versus “reimbursement” so as to provide a potential pathway for the payment of medical marijuana, these decisions did not address a multitude of other issues that do not appear to have been raised in the litigation and which still need to be addressed.  Many employers and carriers, especially those public entities and health carriers that obtain federal funding may be cautious to even reimburse medical marijuana given it may lead to them facing issues with receiving federal funding.  When Ohio enacted its medical marijuana statute, it required university studies to be conducted but faced reluctance in Universities wanting to get involved with studying medical marijuana for fear it may lead to issues with their receiving federal funding. 

As for the other issues not addressed by the decisions, the payment for or reimbursement of medical marijuana is problematic in that such reimbursement would totally circumvent the Medical Cost Containment Regulations.  First, there obviously is no re-pricing mechanism for the payment of marijuana.  Thus, this may fall under the 80% provision for reimbursement.  However, the bigger issue is whether this is actually medical treatment.  There must be a medical provider who certifies that the Claimant meets the requirement of the Medical Marijuana Act to be certified to obtain a Medical Marijuana card to obtain the treatment.  However, there is no actual medical provider who actually prescribes any medical marijuana product, such as form, strain and amount.  When a medical provider prescribes narcotics for a patient, they provide the specific medication, dosage, frequency, and amount.  With medical marijuana, once the claimant is certified, they can go to a dispensary and essentially work with a salesperson to determine what form (leaf, vape, etc.), strain, amount, etc. to obtain.  There also is no re-pricing mechanism given medical marijuana is not payable under Medicare.  Thus, the reimbursement is most likely under the provision that provides for payment at 80% of the usual and customary charge for treatment provided for in 34 Pa. Code § 127.102.  However, there most likely are not sufficient reporting data available for carriers to determine what is the “usual and customary” charge such that the payment would be at 80% of the actual charge.  If the dispensary inflates the amount they are charging for the produce they are distributing, that may me carriers are paying more than they should for this “treatment.” 

Further, there is no medical provider upon which a Utilization Review can be filed.  If filed upon the certifying physician, the issue would be whether it was reasonable and necessary treatment for the Claimant to be certified for medical marijuana.  There is no peer that can conduct a review when the “medical provider” is a salesperson or a medical marijuana “pharmacist.”  Thus, the Employer/Carrier is denied the ability to conduct a Utilization Review.  These are issues that are going to eventually need to be addressed in litigation.  Until they are, there are going to be arguments against whether medical marijuana is to be reimbursed other than simply that the MMA does not require insurance “coverage” for payment of the same.

Bradley R. Andreen, Esq.

Rulis & Bochicchio, LLC

VNA of St. Luke’s Home/Hospice, Inc., v. Ortiz (WCAB) A.3d. No. 1312 and 1362 C.D. 2022 (Pa Cmwlth. 7/23/2024)

Holding- Under Section 413(a) of the Pennsylvania Workers Compensation Act, an employer who initially agrees to a Stipulation of Facts can set aside the Stipulation if it is shown that the Claimant/employee falsely provided information material to the Stipulation. Claimant, Elizabeth Ortiz was an administrative assistant who initially claimed a November 2017 work injury in the form of a left shoulder strain alleging that she fell while attempting to sit on a chair and injured her shoulder. In May of 2018, the Employer issued a notice of temporary compensation payable (NTCP) accepting a left shoulder strain. In June 2019, the Claimant filed a claim petition seeking to expand the work injury to a left shoulder rotator cuff tear and biceps tendon injury. In September 2019, the parties entered into a Stipulation of Fact, approved by the trial judge, for additional injuries, specifically a full thickness tear and a biceps tenodesis of the left shoulder. While Claimant was being paid total disability benefits in October 2020 and January 2021 the employer filed two Modification petitions asserting that Claimant had failed to respond to modified-duty job offers that would have paid her wages less than her average weekly wage. In the course of litigating the Modification petitions, newly discovered medical records disclosed to the Employer revealed that a left shoulder rotator cuff tear and biceps tendon injury pre-existed the November 2017 work accident. The Employer sought to set-aside the Stipulation of Facts accepting the expanded injury description based on the newly uncovered medical records. The WCJ had found that the Claimant repeatedly under oath falsely denied having suffered and being treated for the stipulated before the work accident. The Judge ruled that, inter alia, Employer’s request to set aside the September 2019 stipulation of facts was denied for lack of sufficient competent evidence. The Employer appealed to the WCAB, but the Board affirmed the WCJ’s refusal to set aside the stipulation. The Board treated the matter as a legal issue, as one of waiver, determining that there was no indication that the Employer lacked the opportunity to fully investigate the challenged finding before entering into the stipulation and that it failed to act properly in seeking relief. The Employer appealed to the Commonwealth Court who noted that this case boils down to how much an employer is expected to do by way of investigation and within what timeframe when a claimant misrepresents her condition and/or existence of prior injuries. The Court in an opinion written by Judge Leadbetter noted “turning to the extent to which Employer should have conducted a more rigorous investigation before entering the stipulation, it bears repeating that Claimant time and again misled Employer, her own surgeon, and the workers compensation tribunal as to pre-existing left shoulder issues. It was noted that the Employer was not seeking to set aside its original acceptance of the work injury (left shoulder strain). It was disingenuous for the Claimant to attempt to shift blame for her repeated misrepresentations when such false statements had the practical effect of complicating the proceedings. The Court reversed the Board in deciding that the stipulation could be set aside based on the false statements by the employee.

Paul C. Cipriano Jr., Esquire

Rulis & Bochicchio, LLC 

Notice Issue- Section 311 Business owned by Claimant.

Erie Insurance Property & Casualty v. Heater, No. 148 C.D. (2023)  (Pa Cwmlth -05/29/2024)

Where the Claimant is both the injured employee and employer/sole proprietor, the employer to whom the Claimant must provide notice of a work related injury  for compliance with Section 311 of the PA Workers Compensation Act, is the insurance company that bears the ultimate responsibility for the claim, which allows the insurer to complete a prompt and thorough investigation into the alleged work injury which would normally be performed by the employer. Claimant, David Heater, filed a work injury claim against his company, David W. Heater, a sole proprietorship for which he was employed. The WCJ granted his claim petition finding that he gave timely notice of his injury and that he was injured in the course and scope of his employment. Erie Insurance appealed to the Board which upheld the judge’s decision. Insurer then appealed to the PA Commonwealth Court arguing that Claimant should have been required to give notice to Insurer within 120 days of the injury and the judge’s finding that Claimant’s notice of the injury on himself, as Employer, was sufficient is inconsistent with the purpose of Section 311 of the Act, prejudicial to the Insurer and a violation of Insurer’s due process rights. Claimant responded that the Board did not err in affirming the WCJ’s decision because neither Section 311 of the Act, nor precedent interpreting that provision, required him to provide notice to the Insurer as the Employer received timely notice of the injury. The Commonwealth Court reversed the Appeal Board holding that under these circumstances where a claimant is both the injured employee and the sole proprietor/.employer, the “employer” to whom the claimant must notify of a work-related injury for the purposes of Section 311 in the insurer that bears the ultimate liability for the claim. This allows the insurer to ensure that prompt and complete investigation into the claimed injury, that would normally be performed by a disinterested employer, can be performed to protect stale claims, thereby meeting the purpose of Section 311. Because Claimant did not provide timely notice to Insurer under Section 311, “no compensation shall be allowed” and Claimant’s Claim petition is barred. 23-page decision by Hon. Renee Chon Jubelirer, President Judge.

Paul C. Cipriano Jr., Esquire

Rulis & Bochicchio, LLC

On January 27, 2023, the Commonwealth Court issued a memorandum opinion in City of Pittsburgh v. Ronald Dobbs (Workers’ Compensation Appeal Board), in which it expandedthe application of impairment rating evaluations to all injuries, including injuries that occurred prior to the enactment of Act 57.  The Court noted that Act 57, in which the impairment rating evaluation (IRE) process was initiated, limited its application to injuries sustained prior to its enactment on June 24, 1996.  Subsequently, however, the IRE process was declared null and void by the Pennsylvania Supreme Court in Protz v. Workers’ Compensation Appeal Board (Derry Area School District).  In striking down the entirety of Section 306(a.2), the Supreme Court held that the IRE process of Act 57 violated the nondelegation doctrine of the Pennsylvania Constitution.  The Pennsylvania General Assembly responded, and enacted the Act 111 Amendments to the Workers’ Compensation Act in 2018.  However, unlike Act 57, there was no specific provision in Act 111 that limited it application to injuries suffered prior to a specific date.  In Dobbs, the Court noted that Act 111 has since withstood several Constitutional challenges, and held that in the absence of any language within Act 111 limiting the date of injury, its application was extended to all injuries, including those injuries occurring prior to June 24, 1996.

Author: Melissa C. Petersen, Esquire