By: Bridget Zeier


In Indiana, how should employers handle employees with pre-existing medical conditions who are using legally prescribed medical marijuana? Second, how should an insurer handle an injured employee who has been legally prescribed medical marijuana for treatment within a workers’ compensation claim?


At this time, medical marijuana is not legal in Indiana. It has been a topic that has been broached by the Indiana legislature, but those legislative efforts have all failed. After the Indiana General Assembly’s 2018 session ended, a committee met to discuss the future of medical marijuana in the State. However, the committee could not decide how they wanted to proceed on the issue of medical marijuana and were not able to come to a consensus as to whether this was an issue that they wanted to study further. [1]

As medical marijuana is not legal in Indiana, it is not a prominent issue in worker’s compensation claims. However, the issue of what to do when a worker, who is on light duty restrictions due to a worker’s compensation claim, tests positive for TCH, is something that we do encounter in the defense of Indiana claims.  In this situation, the employer may want or need to fire that employee for violating the company’s drug policy. Unfortunately, due to the Court’s holding in Masterbrand Cabinets v. Waid, 72 N.E.3d 986 (2017), if the employee is terminated, even due to his or her own misconduct, prior to the time that they have been released to full duty work and/or released at maximum medical improvement, they are entitled to temporary total or temporary partial disability benefits.

The opioid crisis facing our nation right now is also a real issue in Indiana. The Indiana Worker’s Compensation Board, in an effort to help combat this problem, has adopted the Drug Formulary. (I.C. 22-3-3-4.7/22-3-7-176). This new law went into effect on January 1, 2019 but other states who have previously adopted the Drug Formulary have seen a change in the way that drugs are prescribed to worker’s compensation patients. Prior to this new law going into effect, if an authorized medical provider prescribed a medication, it had to be authorized. Now, if the drug prescribed is recognized as an “N” Drug by the Drug Formulary, the medication does not have to be automatically authorized.

If an authorized medical provider prescribes medication that is a non-referred drug, also know as a “N’ drug, and the injured worker wants the employer/carrier, or “payer” to pay for the drug, the payer must approve the prescription. If the N drug is not approved, the injured worker can still fill the prescription but will have to pay for it out of pocket.

When a claims adjuster receives a request for authorization for a drug from an authorized treating physician, he or she can put the drug into the formulary, found for free at If the drug prescribed is a “Y” drug, it should be immediately approved. If the drug is an “N” drug, the adjuster has a few options on how to proceed. However, if the “N” drug is being prescribed for an emergent situation, which it should be indicated in the request, it should be authorized. If it is not an emergency situation the adjuster then has the option to:

  1. Still approve the drug.
  2. Send out for Utilization Review and notify prescriber and claimant in writing.
    1. Must give notice of approval or denial within 5 days of the request. If notice not given it is considered approved.
    2. If the UR denies, you can deny the prescription

“N” drugs cannot be denied based on lack of information from prescribing physician. If additional information  is required, the adjuster must seek the information needed from the physician in the time frame set out in IC22-3-3-4.7(e)(2)/22-3-7-16.6(e)(2). Once the additional information is received, then the time clock starts to run for obtaining the UR. It is important to note that if a drug is approved once it does not mean that it has to be approved every time. Approval is only good for a single prescription order.

If the drug is denied, the injured worker has a chance to appeal the denial. These are considered emergent and the Board will address the issue immediately. For a litigated claim, the injured worker should file a petition to the Single Hearing Member. For non-litigated claims, the injured worker should file a petition to the Chairman of the Board.

There is a Grandfathering Provision for drugs prescribed prior to the law being enacted January 1, 2019. If an employee begins us of the “N” drug before 7/1/2018 and continues after 1/1/2019, reimbursement is permitted until 1/1/2020. The Provision in IC22-3-34.7(c)/22-3-7-17.6(c) does not apply to “N” drugs prescribed after 7/1/2018. Appeals will be necessary for prescriptions after 1/1/2019.

Only time will tell the impact that the adoption of the drug formulary will have on Indiana Worker’s Compensation claims.  Other states have seen alternatives to prescription drugs being prescribed by treating physicians, such as Yoga, acupuncture, psychiatry referrals. We understand that the UR process can be quite expensive, especially if you have to run a prescription through UR each time it is prescribed. If the Board overrides denials by UR, this portion of the Act may turn out to be a costly addition for employers/carriers who will pay for the UR and then litigating the appeals.

Practice Tip:

Medical marijuana is not legal in Indiana.  Indiana employers should consider doing a pre-employment drug test and random drug tests throughout employment to test for illegal drug usage including marijuana.  However, if an employee is fired after a work injury for testing positive for marijuana, the employer may still be obligated to pay TTD/TPD benefits until the employee is released to full duty work or reaches maximum medical improvement.

[1]Medical Marijuana and Indiana : What we know about the effort to legalize weed. Dwight Adams, Indianapolis Star, Nov. 19, 2018.