Ultra Health, New Mexico Cannabis Patients Sue Health Insurers
Courtesy of Ultra Health; Adobe Stock

Ultra Health, New Mexico Cannabis Patients Sue Health Insurers

The class-action lawsuit seeks to force health insurance companies to provide full coverage for medical cannabis used to treat behavioral health.

June 13, 2022

New Mexico’s largest cannabis company teamed up with five medical cannabis patients and the father of a minor participating in the state’s program in filing a class-action lawsuit June 10 against several of the state’s prominent health insurance companies.

The lawsuit, filed in the 2nd Judicial District Court in Bernalillo County, comes nearly four months after Ultra Health sent a letter to the health insurers, asking them to confirm their coverage for medical cannabis patients with certain conditions.

A vertically integrated operator with 38 dispensaries serving both patient and adult-use customers in the state, Ultra Health officials claim to have New Mexico law on their side through Senate Bill 317, legislation that expanded the definition of behavior health services to cover several treatment options.

RELATED: New Mexico Cannabis Provider Seeks Insurance Coverage for Patients

Becoming effective Jan. 1, 2022, the legislation intends to make mental and behavior health services more affordable for New Mexicans by eliminating all cost-sharing and any out-of-pocket costs for those services and accompanying medications.

Sent in February, Ultra Health’s letter asked health insurers to affirm they’ll be making payments for qualifying medical cannabis patients with behavior health conditions, such as the now 74,000-plus patients enrolled in the state program for post-traumatic stress disorder (PTSD). The letter also requested information from the insurers in regard to how they intend to pay for medical cannabis without any cost sharing for patients enrolled through their programs.

Ultra Health offered cooperation in building a system for efficient processing of insurers’ medical cannabis payments, but to no avail.

On June 10, Ultra Health and six individual plaintiffs filed a lawsuit against Blue Cross and Blue Shield of New Mexico, True Health New Mexico Inc., Cigna Health and Life Insurance Co., Molina Healthcare of New Mexico Inc., Presbyterian Health Plan Inc., Presbyterian Insurance Company Inc., and Western Sky Community Care Inc.

According to the lawsuit, the “individual plaintiffs seek recovery for themselves, and for every other similarly situated behavioral or mental health patient unlawfully subjected to paying for the entire cost of medically necessary cannabis, in violation of state law.”

The plaintiffs claim that qualified patients should no longer have any out-of-pocket costs or cost sharing, including copays, deductibles or coinsurance.

Under S.B. 317, insurers that offer coverage of behavioral health services cannot impose cost sharing on “professional and ancillary services for the treatment, habilitation, prevention and identification of mental illnesses, substance abuse disorders and trauma spectrum disorders, including … all medications.”

In New Mexico, cannabis is an approved medicine for several qualifying conditions, such as PTSD, opioid use disorder, severe anorexia and Parkinson’s disease, which are considered behavioral health disorders under the Lynn and Erin Compassionate Use Act.

As of May 31, 2022, there were 135,388 patients enrolled in New Mexico’s medical cannabis program, according to the state’s Department of Health. In addition to the 74,006 enrolled for PTSD, there were 928 patients enrolled for opioid use disorder, 333 for severe anorexia/Cachexia, and 452 for Parkinson’s disease.

New Mexico also has judicial decisions on the books recognizing that medical cannabis obtained from a licensed cannabis provider is the “functional equivalent of a prescription” and that medical cannabis is eligible for the same gross receipts tax deduction as prescription drugs, according to a June 13 press release from Ultra Health.

The class-action lawsuit, according to Ultra Health, seeks to have a court recognize what practitioners and patients have acknowledged for years: Medical cannabis is behavioral health care.

Ultra Health CEO and President Duke Rodriguez said he believes the lawsuit to be the first of its kind in the U.S., and that his company acknowledges that the idea of health insurers paying for medical cannabis may seem novel at first blush.

“The idea of health insurance plans paying for medical cannabis may seem like an impossible dream, but all the foundational elements have already fallen into place,” Rodriguez said in the release. “Revolutionizing behavioral health care in New Mexico will take only a few small steps, rather than a giant leap.”

The letter sent in February was also addressed to the Office of the Superintendent of Insurance, New Mexico Federation of Labor, and the New Mexico State Personnel Office.

However, the insurers and the Superintendent of Insurance have yet to act upon the demand that insurance companies pay for medical cannabis used to treat behavioral health conditions, thus necessitating litigation, according to Ultra Health.