New state law requires health insurers cover medical cannabis for some conditions – Santa Fe New Mexican

New Mexico’s largest medical cannabis producer is seeking clarification from the state on a new law that allows patients in the Medical Cannabis Program with some behavioral health conditions to obtain cannabis at no cost through an accredited health insurance plan.

“Patients are suffering physically and emotionally and should have [free] access to medical cannabis under the law,” said Duke Rodriguez, president and CEO of New Mexico Top Organics-Ultra Health.

He was referring to Senate Bill 317, which was signed into law in 2021 and took effect Jan. 1.

The law says accredited group health plans or individual plans “under the Health Care Purchasing Act that offers coverage of behavioral health services shall not impose cost sharing” — or a copay. Services covered under the law include “all medication” for behavioral health conditions.

In June, the state Office of the Superintendent of Insurance sent a letter to health insurance firms alerting them about the change.

But Rodriguez fears insurers and even patients may have forgotten the law took effect at the start of the year.

Based on state Department of Health data, the law could apply to tens of thousands of patients. Of the 130,345 people enrolled in the New Mexico Medical Cannabis Program, more than 71,000 have post-traumatic stress disorder, one of the program’s eligible behavioral health conditions.

Substance abuse and some pain disorders also are covered under the law.

Ultra Health’s inquiry over the health insurance law comes as the New Mexico Supreme Court has determined medical cannabis, like other prescription drugs, is not subject to the state’s gross receipts tax. 

The order, issued Wednesday, upholds a state Court of Appeals ruling in 2020. The case stemmed from requests for tax refunds by producers in 2014 and again in 2018. The state Taxation and Revenue Department had denied those claims.

The ruling means the state must refund medical cannabis producers for taxes collected since the requests were made. Some in the industry have estimated the amount to be between $25 million and $30 million.

Ultra Health said it will be refunded $7.4 million plus interest on taxes it has paid since at least 2018.

The Taxation and Revenue Department said it was disappointed with the Supreme Court’s decision.

“We respect the decision and will move forward to issue refunds to the affected taxpayers once the court’s decision is mandated to become final,” agency spokesman Charlie Moore said.

The new law and the gross receipts tax ruling could create incentive for more people to enroll in the Medical Cannabis Program, despite an April 1 deadline for the start of legal sales of recreational cannabis for adults over 21.

Rodriguez said many patients struggle to pay for cannabis, which costs an average of just over $10 per gram.

Ultra Health sent letters of inquiry Friday to several health insurance firms, as well as the Office of the Superintendent of Insurance and the State Personnel Office, to obtain confirmation of “cannabis [insurance] coverage as a behavioral health service.”

The letter said Ultra Health “constantly receives questions from qualified medical cannabis patient customers regarding how they can obtain insurance payments for their medical cannabis.”

The sponsors of SB 317, Democratic Sens. Jeff Steinborn of Las Cruces and Martin Hickey of Albuquerque, said Wednesday the law makes it clear insurance coverage of medical cannabis should be offered to patients.

But, Hickey said, “The health plan is not on the hook for it unless it is a clinician who has prescribing authority by license and is credentialed by a health plan.”

The law does not apply to patients who receive Medicaid coverage, which is in part funded by the federal government, Hickey added.

Melissa Gutierrez, a spokeswoman for the Office of the Superintendent of Insurance, wrote in an email Wednesday her agency has received the letter from Ultra Health and “is working on a response.”

It is unclear if any insurers in the state have begun offering coverage of medical cannabis.

Presbyterian Healthcare Services spokeswoman Amanda Schoenberg wrote in an email Wednesday the organization is reviewing its copy of the letter from Ultra Health.

Presbyterian “supports the intent of the new law, which focuses on ensuring that New Mexico residents can access the behavioral health services they need,” she wrote.

The Ultra Health letter, signed by Kristina Caffrey, chief legal officer for the company, asks for responses by March 11 “so that we may evaluate whether to pursue this issue in other forms.”

Rodriguez said he hopes the state and health insurance companies “get on this” quickly.

“Unfortunately, no pay or slow pay has been the philosophy of many insurers for too long,” he added.

The Associated Press contributed to this report.