The Challenge and Risks of Marijuana Legalization for Hospitals and Providers

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1 The Challenge and Risks of Marijuana Legalization for Hospitals and Providers By William J. McDonough and Audrey Greening The legalization of marijuana, for medical purposes or otherwise, is a widely covered and hotly contested topic. The discussion has largely focused on the ethics of legalizing marijuana, without much attention dedicated to a consideration of the risks for hospitals and physicians. This paper looks briefly at the current state of marijuana legalization in the U.S. and its impact on hospitals and providers from a risk perspective. The paper concludes with a brief consideration of how hospitals and providers can properly assess the risks presented by marijuana legalization. The Challenge and Risks of Marijuana Legalization As of January 10, 2015, the use of medical marijuana for medical purposes or otherwise is legal in 23 states and the District of Columbia, However, federal law still considers its use illegal. This presents both a challenge and risks to hospitals and providers who must remain compliant with federal law to continue receiving federal funding (including Medicare) while balancing the needs of patients and providers who support medical use of marijuana. Providers in some states, including physicians, hospitals, and hospice care have found what seems to be a loophole that allows them to prescribe or approve patients with debilitative diseases to use medical marijuana for therapeutic purposes. But in meeting the needs and demands of patients, hospitals and providers may be creating a risk and liability challenge. Chart 1 Legalization of Marijuana in the U.S. The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March

2 States Regulate Medical Marijuana Differently Medical marijuana laws, and the interpretation of those laws, vary from state to state. This lack of uniformity presents an additional challenge and risk for hospitals and providers. The types of medical conditions that allow for treatment vary, creating limitations on cannabis usage in some states. Additionally, in some jurisdictions, criminal penalties have been waived for people found in possession of small amounts of marijuana; even the definition of small amount is determined on a state specific basis. For instance, under Massachusetts state law, physicians sign a certificate for marijuana approving patients for treatment. Patients take the certificate to the MA Department of Public Health, where patients register as medical marijuana users. In this instance, physicians do not actually prescribe the drug. They approve and provide a certificate. Thus the loophole appears to be that physicians are not prescribing marijuana, but rather approving patients to secure the marijuana through the state s program. However, although they are classifying it as a certificate and not a prescription, immunity is not guaranteed. This presents a real risk to hospitals and providers since courts may still conclude that a certificate and a prescription are one and the same. Measuring the Risk Prosecutions and Professional Opinions Hospitals and providers looking for guidance from legal authorities and professional medical associations may be left feeling directionless when it comes to a proper assessment of their risks. In 2009, the U.S. Deputy Attorney General issued a memo that provided clarification and guidance to federal prosecutors on where to invest resources for investigation and prosecution of marijuana offenses in states that have enacted laws authorizing the medical use of marijuana. The U.S. Department of Justice stated in August 2013 that the federal government has and will continue to let state and local authorities handle medical marijuana investigations. So far, there are no cases where federal funding has been jeopardized by patients who use, or physicians who approve a patient for use of, marijuana, but that does not prevent the possibility from occurring and is therefore a risk that should still be considered and addressed by hospitals and providers. The Department of Veterans Affairs (VA) has relaxed its stance on medical marijuana for VA facilities and clinics in the 23 states that permit marijuana for medical use. Under previous policies, VA providers could deny pain medications to veterans who were found to be using illegal drugs, including marijuana. This change in policy makes an exception for marijuana used for medical purposes as long as VA providers are following state laws closely. The policy clarifies, however, that VA physicians may not prescribe marijuana and that the policy does not apply to facilities in states without medical marijuana legislation. The American Medical Association's (AMA) policy making body voted in 2013 to reaffirm its opposition to marijuana legalization, but also called the current federal approach to reducing marijuana use "ineffective" and endorsed a review of the "risks and benefits" of mature legal markets including Colorado and Washington. The AMA's 527 member House of Delegates decided to retain the long standing position that "cannabis is a dangerous drug and as such is a public health concern." The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March

3 Specifically, the AMA outlined support for a comprehensive review of the risks and benefits of U.S. statebased drug legalization initiatives, suggesting that the situation in Colorado and Washington could influence the group s future position on legalization, but only once results can be adequately assessed. Other changes seem to emphasize a public health approach to drug use, with the AMA stating its support for a national policy that would acknowledge that federal laws to address illicit drug use via supply reduction and enforcement have been ineffective and expand the availability and reduce the cost of treatment programs for substance abuse disorders, including addiction. All of these opinions and nuances can leave hospitals and providers wanting clear direction on how to best assess their particular risks when it comes to marijuana legalization. Chart 2 Summary of Organizational Commentary on Medical Marijuana Usage Organization American Medical Association Support for Medical Marijuana Limited Commentary Awaiting further research American College of Physicians Support Since 2008 American Academy of Pain Medicine American Academy of Family Physicians American Nurses Association Colorado Medical Society American Cancer Society Tentative Limited Support Support Limited Awaiting further research Only based on high quality evidence based research Support safe access to therapeutic cannabis Testified against treatment of PTSD with Medical Marijuana, which would have added post traumatic stress disorder to the list of conditions that could be treated with medical marijuana. More research needed Source: Internet research, Organization websites, Accessed The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March

4 How Hospitals and Providers Can Assess Their Risk Factors to Consider There are many risks for Hospitals and providers that should be fully analyzed as Risk Managers review implications of Medical Marijuana programs in their respective organizations. These factors should be considered as Risk Managers perform their reviews. 1. As noted above, Hospitals and providers must be in compliance with Federal law in order to receive funding and federal payments for care and treatment. Non compliance could severely jeopardize an organization s bottom line. 2. If it is determined that a Hospital is not in compliance with federal law, the IRS may also become interested and investigate the organization s status. There are billions of dollars in grant monies provided to U.S. medical centers and non compliance could place those funds in jeopardy from the National Institutes of Health and other larger grant authorities. 3. Hospitals and providers should review their professional liability policies to determine if the coverage would cover a claim involving an activity (often times defined as medical professional services in a malpractice policy) which is not in compliance with federal law. Often times these very insurance policies exclude coverage for illegal activity. At the very least, Risk Managers should determine if defense would be afforded to the Hospital or physician if a claim arose from approving or prescribing medical marijuana. 4. Risk Managers should review all other scenarios of risk and liability which may arise if supporting therapeutic marijuana, including but not limited to: a. Directors and Officer Liability b. Employers Liability c. General Liability d. Workers Compensation e. Managed Care Errors and Omissions 5. Hospitals should review their Informed Consent policies to ensure they appropriately address the risks, benefits, and alternatives to the use of medical marijuana. 6. Hospitals and medical staff may want to develop medical marijuana clinical guidelines to assist providers in determining which patients are appropriate for the course of treatment and for which patients is it contra indicated. 7. Hospitals should create written policies or protocols addressing the use of medical marijuana on their campuses. Those policies/protocols should be compared to other no smoking policies commonplace to U.S. healthcare settings. 8. Medical marijuana training programs highlighting important risk management issues should be provided to hospital and medical staff. Content of those programs should include warning patients about the side effects of medical marijuana therapy. 9. Organizations should define standard of care as it relates to medical marijuana and devise methods to monitor programs and measure outcomes in the same way it would for other high risk protocols. The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March

5 Conclusion Hospitals and providers considering allowing medical marijuana use should strive to strike a delicate balance between an improved quality of life for patients who use the drug and federal and state regulations regarding its use. The needs and wishes of other patients and staff, best practices identified by medical societies and associations, and liability risks should all be a part of the process of finding that balance. About the Authors William J. McDonough William McDonough is a managing principal and executive broker within Integro s healthcare practice. With more than 25 years of experience in the brokerage, risk financing, and healthcare risk management field, Bill counsels clients across the U.S. on healthcare alternative risk financing vehicles, captive best practices, and loss prevention. He speaks and writes regularly on patient safety, reporting systems, and strategic planning, among other topics, and is a Fellow with the American Society for Healthcare Risk Management (ASHRM). Bill holds a BS degree from the University of Miami, a Masters in Public Health Administration from Suffolk University, and PhD (ABD) in Health Policy from Northeastern University. He is an ARM and a candidate for the CPCU designation. Phone: william.mcdonough@integrogroup.com Audrey Greening Audrey Greening is a managing principal within Integro s healthcare practice. She has more than 20 years of experience in risk management and risk financing for healthcare clients, including integrated delivery systems, physician groups, dental groups, and rehabilitation hospitals. Audrey is recognized as an expert in developing creative alternative risk financing program structures, identifying unique health care industry specific concerns and developing non conventional solutions, and creating new products that provide long term solutions for clients evolving risks. Her experience includes consulting for health care clients throughout the U.S. Audrey holds a BA from the LaSalle University and an MBA from Loyola University. Phone: audrey.greening@integrogroup.com About Integro Integro is an insurance brokerage and risk management firm. Clients credit Integro s superior technical abilities and creative, collaborative work style for securing superior program results and pricing. The firm's acknowledged capabilities in brokerage, risk analytics and claims are rewriting industry standards for service and quality. Launched in 2005, Integro and its family of specialty insurance and reinsurance companies, some having served clients for more than 150 years, operate from offices in the United States, Canada, Bermuda and the United Kingdom. Its U.S. headquarter office is located at 1 State Street Plaza, 9th Floor, New York, NY Integro Ltd The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March

6 Resources for Further Research Top Doctors Association Says Yes to Medical Marijuana in Historic Endorsement, The Hope Clinics. Accessed online on Feb. 6, 2015 at: doctors association says yes to medicalmarijuana in historic endorsement/ 3. Volkow ND, Baler RD, Compton WM, Weiss SR. Adverse Health Effects of Marijuana Use. N Engl J Med Jun 5;370(23): Study: Medical Marijuana Leads to Fewer Overdose Deaths, Minnesota Physical Medicine Blog. Accessed on Feb. 6, 2015 at: medical marijuana leads fewer overdose deaths/ 5. Wang GS, Roosevelt G, Heard K. Pediatric marijuana exposures in a medical marijuana state. JAMA Pediatr Jul;167(7): content/uploads/supporting_orgs.pdf 7. Medical Marijuana, Colorado Medical Society. Accessed on Feb. 6, 2015 at: marijuana 8. Koppel BS, Brust JC, Fife T, Bronstein J, Youssof S, Gronseth G, Gloss D. Systematic review: efficacy and safety of medical marijuana in selected neurologic disorders: report of the Guideline Development Subcommittee of the American Academy of Neurology. Neurology Apr 29;82(17): Zuardi AW. History of cannabis as a medicine: a review. Rev Bras Psiquiatr Jun;28(2): Available online at &lng=en&nrm=iso&tlng=en. Accessed The Challenge and Risks of Marijuana Legalization for Hospitals and Providers March