Colorado’s workers compensation program may not be a one-off experiment. It could represent a national trend. This trial is a good way to see how the federal government will eventually integrate medical marijuana into reimbursements for traditional healthcare.
Medical cannabis is almost exclusively a cash expenditure today. Patients—even those with physician recommendations—typically pay out of pocket because federal prohibition prevents most insurers from treating cannabis like other prescription medications.
A rescheduling does not mean that insurers will automatically cover medical cannabis. By recognizing that cannabis is a medicine with an accepted medical purpose under federal law it will remove the biggest legal barrier preventing insurers to develop reimbursement models. This would increase the opportunities for clinical studies that are often used by insurers to make coverage decisions.
A shift in this direction could allow for the medical use of cannabis to be more comparable to prescription drugs, with physician supervision, standard dosage, and reimbursement by insurance. Patients would also have greater access to it. A Colorado study, published in the spring of this year, gives an idea about how that might look for injured workers.
An article peer reviewed in The Journal of the Journal of Occupational and Environmental Medicine Documented what researchers call the first official reimbursement of medical marijuana through an state workers’ compensation plan.
Instead of evaluating the cannabis plant itself, Colorado Division of Workers’ Compensation developed the project in order to answer the practical question: could medical cannabis reimbursement be integrated into a system of insurance?
This is the first attempt to evaluate a medical marijuana reimbursement program from an insurance company that offers a voluntary plan, said Dr. Ethan Moses. He’s the lead author of the study and medical director of Colorado Division of Workers’ Compensation.
Colorado’s Special Funds Program allowed a patient aged 74 with an old lumbar spinal injury to purchase medical cannabis prescribed by a physician from licensed dispensaries. The receipts were submitted for reimbursement. No prior authorization was required, nor did the reimbursement system require direct billing by dispensaries or a complex formulary. Researchers describe this as a simple and straightforward model that can be used elsewhere.
Only oral cannabis formulations—including THC and CBD/CBN gummies—were reimbursed. Smoked and vapourized cannabis products are not eligible for reimbursement due to respiratory issues, inconsistencies with dosing and difficulties in standardizing administration.
Patient reported reduced pain, better mobility, and improved quality of life. He voluntarily decreased hydrocodone usage by 17% in twelve months and stopped self-directed cannabis vapourization. There were no adverse safety incidents reported.
Moses stated that the patient’s reaction was profound and unexpected. Pain levels have dropped dramatically. Quality of life increased based on the measures that we took… Disability decreased, function increased.”
Moses cautioned, however, that it was not the intention of this study to prove that marijuana itself is responsible for these improvements.
He said: “Based on a sample of just one patient, it is impossible to say whether the changes were caused by medical cannabis use or the medicalization thereof.” It could be due to the close coordination of care. Moses, on the other hand, stated that studies conducted prior to cannabis-free care coordination did not reveal such significant improvements in patient outcomes.
It is not clear that the cannabis caused the results, but the observation suggests they may have been due to more than simply care coordination. The question of whether the improvements were due to medical cannabis or intensive clinical supervision, or a combination, remains open. Larger, controlled studies are needed to determine the answer.
Colorado’s reimbursement program is run by the state, but insurance coverage across the country will be dependent on a federally rescheduled schedule.
Cannabis is currently classified as Schedule I, which places it with drugs that are deemed not to be accepted for medical purposes. This creates significant administrative and legal barriers for insurance companies.
The addition of cannabis to Schedule III will acknowledge the accepted medical uses under federal law, while also dramatically increasing opportunities for clinical studies. This would allow medical cannabis to be regulated in the same way as prescription medicines.
The rescheduling of cannabis would not necessarily make it available on prescription, nor would it require insurers to cover the cost. But it would eliminate one of federal’s biggest obstacles in evaluating marijuana as a reimbursed therapy. Rescheduling combined with further regulatory action, new physician prescribing paths, and more research could create the foundation for coverage of cannabis similar to prescription medication.
Moses expects that rescheduling will accelerate the research which could influence the willingness of insurers to cover. However, he cautioned that this won’t solve immediately any reimbursement issues that are currently facing people.
As the Colorado Constitution states, insurance companies are not required by law to cover medical marijuana. They would therefore have to internalize a motivation for them to do so.
Moses’s repeated encounters with injured workers led to the birth of Colorado’s pilot.
They would ask me, “Is there a way that I can get my insurance to cover this?” Moses said. Moses said.
According to him, the new program will address two problems in the system.
Moses noted that the safety of cannabis was a concern, but also pointed out that many patients use it without telling their doctors, causing gaps in return-to work assessments and medication reconciliation. It also created equity gaps, as only people who can afford it could buy it at the dispensary.
Medical cannabis is a treatment that’s largely only available in cash today. Many patients with chronic pain are unable to afford cannabis treatment, especially those on fixed incomes or disability payments.
In addition to improving affordability, formal reimbursement allows doctors to record cannabis usage in the medical records of patients. This helps them monitor their treatment with other drugs and reduces potential risks.
Moses stated that the primary goal was to find a solution for integrating reimbursements of medical cannabis into our system in a manner which improved safety and equity. It was, to me a great success.
Colorado is not the only state that has explored reimbursement models. New Mexico has incorporated cannabis as part of its fee schedule for workers’ compensation beginning in 2025. It does not mandate that insurers cover cannabis, or set clinical eligibility criteria. However, it provides a standard mechanism to determine reimbursement for medical cannabis approved in a workers compensation claim. These efforts are different from Colorado’s study, but they reflect a growing desire among regulators and insurers to prepare for a world where medical marijuana is more closely regulated.
The federal rescheduling could give insurers greater access to the clinical evidence they need to assess cannabis in conjunction with other treatments covered.
Colorado’s constitution prohibits insurers from requiring reimbursement for medical cannabis, so rescheduling by itself would not change coverage in the state. Schedule III status nationally could reduce legal uncertainty regarding reimbursement in other states that do not have constitutional restrictions like Colorado.
Although Colorado has shown that the reimbursement model can be expanded beyond patients who are retired, there is another obstacle: safety in the workplace.
As the patient in this pilot study was retired, researchers didn’t have to consider questions about workplace impairment or fitness-for duty that are frequently asked by employers.
Moses stated that any future reimbursement programs should include patients who are actively employed to understand the role of medical cannabis within workers compensation systems, while also addressing protocols for return-to work and occupations with safety concerns.
Authors of the study identify return-to work protocols, impairment guidelines and care coordination frameworks that are scalable as next critical steps to expand reimbursement models responsibly.
Colorado’s program study illustrates what medical cannabis could eventually resemble if federal rescheduling leads to broader integration into healthcare: rather than patients navigating treatment largely outside the healthcare system and paying entirely out of pocket, physician-supervised cannabis therapy could become part of traditional medical practice, with standardized prescribing, clinical oversight, and—eventually—insurance reimbursement for eligible patients.
Before this vision can become reality, much work is needed. There will be a need for larger clinical studies, more insurer participation, changes to federal regulation, as well as workplace safety standards.
Colorado has shown that reimbursements are possible.
Moses said that the research enabled by the new scheduling could provide insurance companies with all the information they require to accept medical marijuana as a legitimate treatment and even to save money.
He said, “That is my wish.”
Colorado’s Compensation Study could serve as an example of how marijuana could be integrated as a medically prescribed therapy that is covered by insurance in the future.
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