Insurers in cannabis suit want case heard in federal court

Several New Mexico health insurers involved in a class-action lawsuit that argues they should bear the brunt of the cost of medical cannabis for patients are trying to move the case to federal court.

The seven insurers – Blue Cross and Blue Shield of New Mexico, True Health New Mexico, Cigna Health and Life Insurance Co., Molina Healthcare of New Mexico, Presbyterian Health Plan, Presbyterian Insurance Co. and Western Sky Community Care – filed the notice of removal last week, arguing that the case should be moved out of the 2nd Judicial District Court in Albuquerque and into the hands of a federal court.

The lawsuit was filed by New Mexico Top Organics-Ultra Health and six medical cannabis patients in mid-June. They argue that medical cannabis as a prescription should be paid for by health insurers in the state under a law for behavioral health cost sharing that went into effect in January.

The law says that insurers should cover 100% of behavioral health services, including the prescribed treatment of a behavioral health condition. Post-traumatic stress disorder is a qualifying condition under that law and a majority of patients in New Mexico's cannabis program qualified under that condition, according to a New Mexico Department of Health report.

A hearing on whether the case will move forward in federal court is scheduled for September, effectively delaying the legal proceedings for more than a month.

A spokeswoman for Presbyterian declined to comment on the matter. Attorneys representing other health insurers in the lawsuit didn't immediately respond to email requests for comment.

Ultra Health CEO Duke Rodriguez told the Journal on Friday that he believes those claims were made in a move to "delay the process" of the lawsuit.

"We clearly believe it belongs in state court," he said.

The insurers argued in their notice of removal that the six medical patients listed as plaintiffs in the case have health insurance coverage under plans governed at the federal level.

More specifically, they say that coverage for at least two of the plaintiffs – both of whom are medical cannabis patients – is governed by the Employee Retirement Income Security Act that "completely preempts those claims and converts them into federal claims that are removable to this Court."

They also argue that the number and type of potential plaintiffs and the dollar amount involved qualify the suit to fall under the jurisdiction of the federal Class Action Fairness Act.

Lastly, the defendants argued that although the plaintiffs made claims in the lawsuit under state law, each claim "raises disputed and substantial issues of federal law, including whether federal law – namely, the Controlled Substances Act – permits a State to mandate coverage, under a health plan regulated by federal law, of substances prohibited by the Controlled Substances Act."

Rodriguez said it's important the case moves forward.

"I understand that these insurers may not want to immediately pay for the cost of medical cannabis for these patients," he said. "But these patients today continue to pay for medical cannabis out of pocket."

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