NM Cannabis Companies Sue Medical Cannabis Patients Healthcare Providers
The New Mexico legislature last year passed a bill aimed at eliminating out-of-pocket expenses for behavioral health. As Gov. Michelle Lujan Grisham signed the measure into law, she said in a press release that the bill “could make a real, meaningful difference” by eliminating co-payments for behavioral health services.
Now a class action lawsuit filed last week is challenging health insurance companies in New Mexico for failing to cover medical cannabis expenses. New Mexico cannabis producer Ultra Health, along with six medical cannabis patients, filed a lawsuit against seven New Mexico health insurance providers, seeking unspecified damages, reimbursement for their respective cannabis purchases since January of this year, and coverage for medical cannabis from health plans going forward. The case appears to be the first of its kind nationwide.
Representing the cannabis company and medical cannabis patients is Christopher Saucedo, who is also Regent of New Mexico State University and served on the state district committee last year.
Ultra Health has earned a reputation for filing numerous lawsuits against government agencies on various cannabis-related issues, such as: B. Raising production limits for medicinal cannabis and repealing medicinal cannabis rules and regulations. But Duke Rodriguez, president and CEO of Ultra Health and former New Mexico Secretary of Health and Human Services, said this suit makes the most sense.
“Of all the litigation we’ve had to fight over the past decade, this class action is possibly the single most important issue we’ve brought and I think it’s our strongest legal position to date,” Rodriguez said NM Political Report.
Rodriguez said if the judge in the case recognizes medical cannabis patients as a certified class, the case could include more plaintiffs and more health insurance companies named than defendants.
“Every time one of those 75,000 medical cannabis patients walks into one of our dispensaries, reaches into their pocket and buys that gram [cannabis] Flower, they avoided prescription costs for this health insurer,” Rodriguez said.
In the lawsuit, Saucedo cited a number of studies showing the effectiveness of medicinal cannabis for conditions such as stress, anxiety and post-traumatic stress disorder. While post-traumatic stress disorder is a qualifying condition for medicinal cannabis in New Mexico, generalized stress and anxiety are not. But stress and anxiety are often cited as side effects of post-traumatic stress disorder. Saucedo also cited public comments from state senators Martin Hickey, D-Albuquerque, and Jeff Steinborn, D-Las Cruces, who sponsored the bill that became law requiring insurance providers to pay 100 percent of behavioral health treatment costs.
“In response to a media inquiry in February 2022, Senators Steinborn and Hickey said that ‘the law makes it clear that medical cannabis insurance should be offered to patients,'” Saucedo wrote.
There are two other recent cases that Saucedo says support the notion that medicinal cannabis should be treated the same as other, more traditional forms of behavioral therapy. He cited a 2014 New Mexico Court of Appeals decision that required workers’ compensation to compensate injured workers for legal purchases of medicinal cannabis.
“As New Mexico has recognized the need to exclude gross receipts from the sale of medicinal cannabis to people with debilitating conditions, the same applies to medicinal cannabis and behavioral health, and the relevant laws should be read harmoniously so that treatment through insurance coverage is more accessible,” wrote Saucedo.
Recently, the State Court of Appeals ruled that while medicinal cannabis is not prescribed in the same way as pharmaceutical drugs, a doctor’s recommendation to use medicinal cannabis is effectively equivalent to a prescription.
“The New Mexico Court of Appeals ruled that medical cannabis may be an appropriate and necessary medical care or service under workers’ compensation,” Saucedo wrote.
No cover for cannabis
Last year, the state legislature approved what was then known as Senate Bill 317, which in part required health care providers to cover all behavioral health services. Lujan Grisham said in a press release that she was “proud and grateful” to sign the “priority measure”.
“This law is an important first step in helping 23,000 uninsured New Mexicos access affordable health insurance,” the governor said.
Almost a year later, following a request from Ultra Health, the State Department, charged with overseeing insurance regulation, issued a letter to the cannabis company stating that state regulators cannot compel insurance companies to cover medical cannabis purchases.
Cassandra Brulotte, an attorney with the State Superintendent of Insurance, wrote in her letter to Ultra Health that without a clear mandate from the legislature, the department cannot mandate medical cannabis health insurance.
“Senate Bill 317 specifically prohibits cost-sharing for behavioral health services covered by a health plan,” Brulotte wrote in February of this year. “Please also note that this office does not direct insurers to register specific providers. Building a provider network for behavioral health services is the responsibility of the insurers themselves.”
Lujan Grisham’s office did not respond to questions about whether the governor views medicinal cannabis as a behavioral health treatment that should be covered by insurance or whether she could guide the Office of the Superintendent of Insurance to change its stance.
In March of this year NM Political Report asked several health insurers in New Mexico if they planned to cover the purchase of medical cannabis as a form of behavioral health care. Two providers referred the Office of the Superintendent of Insurance and another avoided fully answering the question.
Joanie Griffin, a spokeswoman for True Health New Mexico, said the decision to cover medical cannabis purchases rests with state regulators.
As a health insurance company offering group and individual insurance to New Mexicans, True Health New Mexico is regulated by the New Mexico Office of the Superintendent of Insurance,” Griffin said. “Health insurance coverage is a decision made appropriately by the OSI based on all applicable state laws.”
Blue Cross and Blue Shield of New Mexico chief of staff Laurie Volkin praised Brulotte’s letter, but Volkin sidestepped the question as to why the company might not cover the cost of purchasing medicinal cannabis, or even addressed whether it would company would consider this .
“Blue Cross and Blue Shield of New Mexico appreciate and support the Office of Superintendent of Insurance’s February 24, 2022 response to Ultra’s February 18, 2022 letter regarding medical cannabis,” Volkin wrote in an email NM Political Report. “Our benefit plans are designed to facilitate members’ access to safe, appropriate and effective healthcare solutions.”
Melanie Mozes, the communications director for the Presbyterian Health Plan, in March NM Political Report in an email that the organization supported the law change but pushed it back to Superintendent of Insurance Russell Toal.
“PHP supports the intent of the new law, which focuses on ensuring New Mexico residents have access to the behavioral health services they need,” Mozes wrote. “The Superintendent of Insurance has also provided standardized guidance for health plans on behavioral health services that are not cost-sharing.”
The guide referenced by Mozes, a Toals behavioral health insurance bulletin, makes no mention of medicinal cannabis and only refers to pharmaceutical drugs.
“It is up to the airline to decide whether the drug should be treated as a bra drug for cost-sharing purposes,” Toals wrote in the June 2021 Bulletin.
Rodriguez said when his company investigated coverage of medical cannabis purchases, the superintendent’s office and vendors pointed fingers at each other and there was “a lot of foot shuffling and paper passing around.”
“It was clear that without legal action they would not be able to fulfill their obligations,” Rodriguez said.
Rodriguez said he expects attorneys for the seven healthcare providers not only to challenge the case over procedural issues, but also alleging that the providers could run into trouble with the federal government because cannabis is still illegal at the federal level.
“The first thing they’re going to talk about is a conflict with federal law,” Rodriguez said. “We expect the usual standard objections, but I don’t think they will prevail in New Mexico.”
In the State Court of Appeals case relating to workers’ compensation and cannabis, an employer challenged a workers’ compensation judge’s decision that purchases of medicinal cannabis should be reimbursed. The employer argued in part that reimbursement for purchases of medicinal cannabis would violate federal law.
Former appellate judge James Wechsler wrote that the employer could not prove this point.
“… The employer is not relying on any federal statute that he would be compelled to break, and we will not seek any such statute,” Wechsler wrote.
For years there seemed to be a misconception that banks and other cannabis-related utilities would have trouble doing business with cannabis producers and dispensaries. But in a recent episode of the cannabis podcast Growing Forward, a collaboration between New Mexico PBS and NM Political Reportformer Bernalillo County Commissioner and cannabis banking expert, debunked this idea.
Talbert and other cannabis banking experts agree that the risk facing cannabis banks is a loss of assets, not federal criminal charges. Additionally, federal agencies have repeatedly signaled that they would not prioritize cannabis fees in states where it’s legal, with the exception of at least one case on state land.
When asked whether insurance coverage for medical cannabis purchases could drive up the cost of medical cannabis in general, Rodriguez said dispensaries would likely be bound by what state rules and regulations call usual and customary fees , meaning pharmacies would not be able to charge more than usual or customary.
Rodriguez added that full coverage for medical cannabis purchases could both save insurance providers money and save patients’ lives.
“If that avoids a hospital stay, avoids a suicide, avoids every other medical catastrophe that might be out there, without question, it’s a cost savings for insurers,” Rodriguez said.