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As our understanding of medicine evolves - alongside society’s increasingly relaxed attitude toward cannabis - it’s no surprise that corresponding adjustments are emerging in the field of workers’ compensation law.
On March 20, 2025, the Supreme Court of Pennsylvania issued a decision that will likely have a ripple effect across workers’ compensation law. A dispute over a claimant’s reimbursement for CBD oil resulted in a ruling that “any item that is part of a health care provider’s treatment plan for a claimant’s work-related injury falls within the purview of the broad-encompassing phrase ‘medicines and supplies.’” Accordingly, under the Workers’ Compensation Act, a claimant is entitled to reimbursement for out-of-pocket expenses related to such treatments.
Schmidt v. Schmidt, Kirifides and Rassias, PC (WCAB)
In this case, the claimant - a workers’ compensation attorney himself - sustained back injuries in the course and scope of his employment. Opting to avoid surgery, he focused on pain management. His treating physician initially prescribed OxyContin and Oxycodone, but the claimant’s pain persisted. When the physician suggested increasing the dosage, the claimant declined, fearing it would impair his ability to serve his clients.
The physician then recommended CBD oil and issued a prescription. The claimant purchased both a CBD oil and a CBD topical from a natural remedy store and submitted receipts and the prescription to his employer for reimbursement. The employer refused, arguing that CBD oil is not a pharmaceutical drug. The claimant then filed a Penalty Petition against the employer.
Relevant Law
Under the Workers’ Compensation Act, employers must pay for:
“Reasonable surgical and medical services, services rendered by physicians or other health care providers, including an additional opinion when invasive surgery may be necessary, medicines and supplies, as and when needed.”
77 P.S. § 531(1)(i).
Procedural Background
The Workers’ Compensation Judge (WCJ) ruled in favor of the claimant, concluding that CBD oil qualifies as a supply under Section 306(f.1)(1)(i) and that the claimant is not a healthcare provider. Because the claimant did not obtain the oil directly from a healthcare provider, the cost containment regulations did not apply.
The employer appealed to the Workers’ Compensation Appeal Board (WCAB), which reversed the WCJ’s decision, finding that the Penalty Petition should be denied. The WCAB reasoned that the claimant “did not follow the rules triggering [Employer’s] obligation to pay” and asserted that, even if he had complied, CBD oil could not be considered a “supply” under the Act, as the Food and Drug Administration (FDA) “has concluded that it has not been proven safe or effective.”
The claimant then appealed to the Commonwealth Court, which held that CBD oil is a “medicine and supply” for purposes of the Act. The court also noted that no Utilization Review Petition had been filed, so the issue of reasonableness was not properly raised. Additionally, the court found that the claimant was not obligated to submit HCFA forms or periodic medical reports to the employer, as those statutory requirements apply to providers - not to claimants.
The employer subsequently appealed to the Supreme Court.
Supreme Court Ruling
The Pennsylvania Supreme Court ultimately held that “any item that is part of a health care provider’s treatment plan for a work-related injury falls within the purview of the broad-encompassing phrase ‘medicines and supplies’ as provided in Section 306(f.1)(1)(i) of the WCA.” Accordingly, if a treatment is part of a provider’s documented treatment plan and is reasonable, the employer is obligated to pay for it.
Breaking from the lower courts, the Supreme Court found the distinction between “medicine” and “supply” to be immaterial. Noting that neither the Workers’ Compensation Act nor Section 1991 defines either term, the Court interpreted the statutory language broadly, as the General Assembly intended. The central question, the Court said, is not whether the item is a medicine or a supply, but whether it is prescribed by a healthcare provider as part of a treatment plan for a work-related injury.
The Court further clarified that the Act does not require treatments to be FDA-regulated.
In addition, the Court found that the claimant was not required to comply with cost containment provisions such as producing HCFAs or following the Department of Labor’s regulations, as those provisions apply only to healthcare providers - not to employees.
Going Forward
The Court’s decision offers clarity regarding employers’ and carriers’ reimbursement obligations. A new standard has emerged: insurers must now reimburse over-the-counter, nonprescription, and unconventional treatments, provided they are part of a provider’s treatment plan.
However, this ruling does not authorize unregulated or unlimited treatments without oversight. The Court explicitly reaffirmed that reasonableness and necessity can still be challenged through the utilization review process. As noted in footnote 9 of the opinion:
“While we recognize that not every item that is part of a health care provider’s treatment plan may be deemed reasonable and/or necessary, challenges thereto may be raised before a utilization review organization as part of the utilization review process under the WCA. See 77 P.S. § 531(6)(i)-(iv). Those challenges, however, do not inform whether an item is a ‘medicine or supply’ in the first instance under Section 306(f.1)(1)(i) of the WCA.”
As a result, while there may be an increase in reimbursement obligations, we also anticipate a rise in utilization review litigation to contest treatments that insurers believe are unnecessary or unreasonable.
Practical Implications
