Broad Inclusion of Provider-Prescribed Items under Section 306(f.1)(1)(i): Employers’ Duty to Reimburse CBD Oil as “Medicines and Supplies”

Introduction

Schmidt, M. v. Schmidt, Kirifides & Rassias, PC (2025) is a landmark Pennsylvania Supreme Court decision clarifying that any item prescribed by a health care provider as part of a work-related treatment plan—including over-the-counter remedies such as cannabinoid oil (CBD oil)—qualifies as “medicines and supplies” under Section 306(f.1)(1)(i) of the Workers’ Compensation Act (WCA). The dispute arose when claimant and workers’ compensation attorney Mark R. Schmidt, who suffered an aggravation of preexisting degenerative disc disease on the job, began using CBD oil on his physician’s recommendation to manage pain without resorting to higher doses of opioids or surgery. His employer, Schmidt, Kirifides & Rassias, PC, refused to reimburse him, arguing that CBD oil is not a pharmaceutical drug and that the claimant was not a “provider” entitled to cost-containment protections. After a WCJ award, a divided Workers’ Compensation Appeal Board decision, and an en banc Commonwealth Court reversal in the claimant’s favor, the Supreme Court affirmed that employers must pay for provider-prescribed CBD oil under the WCA and that cost-containment regulations do not bind non-providers.

Summary of the Judgment

In a unanimous opinion by Justice Brobson, the Supreme Court of Pennsylvania held:

“Medicines and supplies” in Section 306(f.1)(1)(i) of the WCA is a broad, encompassing phrase that includes any item prescribed by a health care provider as part of a claimant’s work-related treatment plan.
Cannabinoid oil (CBD oil), prescribed to treat pain, falls squarely within that definition and must be paid for by the employer or insurer.
Cost-containment provisions and Pennsylvania Department of Labor regulations (34 Pa. Code §§ 127.201–127.202) apply only to health care providers, not to claimants acting in a non-provider capacity, so the claimant need not submit HCFA forms or provider billing codes to obtain reimbursement.
The Commonwealth Court’s order requiring reimbursement was affirmed.

In so ruling, the Court declined to impose additional requirements—such as FDA approval or proof of THC content—beyond the plain statutory language and left challenges to reasonableness and necessity to the utilization review process.

Analysis

Precedents Cited

Statutory Construction Principles: 1 Pa. C.S. § 1921(a)–(c) and § 1903(a)—the Court relied on the plain-meaning rule and context-driven interpretation, acknowledging that remedial statutes like the WCA are construed liberally in favor of injured workers (Martin v. Workers’ Comp. Appeal Bd., 652 A.2d 1301 (Pa. 1995)).
Workers’ Compensation Medical Payment Cases:
- Giant Eagle, Inc. v. Workers’ Comp. Appeal Bd. (Givner), 39 A.2d 287 (Pa. 2012)—Section 306(f.1) is the core employer-payment clause for medical expenses.
- Fegley v. Firestone Tire & Rubber, 291 A.3d 940 (Pa. Cmwlth. 2023)—held that medical marijuana, although not FDA-approved, could qualify as “medical supplies” when part of a provider’s plan.
- Keystone RX LLC v. Bureau of Workers’ Comp. Fee Rev. Hearing Off., 265 A.3d 322 (Pa. 2021)—employers must pay providers for reasonable and necessary treatment under Section 306(f.1)(1)(i).
Prisoner Rights Cases (Scope of Judicial Review of Medical Judgments): Inmates of Allegheny County Jail v. Pierce, 612 F.2d 754 (3d Cir. 1979), and Kretchmar v. County of Allegheny, 831 A.2d 793 (Pa. Cmwlth. 2003)—courts will not second-guess a health care provider’s treatment plan or substitute their judgment for that of a medical professional.
Utilization Review Framework: 77 P.S. § 531(6) and 34 Pa. Code §§ 127.459–127.471, establishing that challenges to reasonableness or necessity go through the URO process, not through initial entitlement to payment under Section 306(f.1)(1)(i).

Legal Reasoning

1. Plain Language of “Medicines and Supplies.” The Supreme Court observed that Section 306(f.1)(1)(i) requires the employer “to provide payment … for … medicines and supplies, as and when needed.” Because neither “medicine” nor “supply” is separately defined in the WCA, the Court treated “medicines and supplies” as a single, broad phrase. That reading avoids rendering either term redundant and gives full effect to the General Assembly’s choice of language.

2. Provider-Prescribed Standard. The Court held that any item prescribed by a health care provider as part of a claimant’s treatment plan for a workplace injury falls under that phrase. Thus, employers cannot second-guess whether a provider’s chosen remedy qualifies as a “medicine” or “supply.”

3. Non-Provider Exemption from Cost-Containment Regulations. Section 306(f.1)(2) and 34 Pa. Code §§ 127.201–127.202 impose billing forms and cost-containment duties only on “providers.” The Court confirmed that a claimant is not a “health care provider” under 77 P.S. § 29 and therefore need not use HCFA forms or abide by provider billing rules to obtain reimbursement.

4. FDA Approval and Illegality Not Prerequisites. The opinion clarified that the statute does not require FDA approval of every treatment, nor does it demand proof that CBD oil is THC-free as a condition of reimbursement. Disputes about safety or efficacy must be aired in a utilization review challenge to the reasonableness or necessity of treatment.

Impact

This decision has significant implications:

It cements a broad remedial scope for the WCA’s medical payment provision, making clear that novel or non-traditional treatments—so long as prescribed by a provider—are covered.
Employers and insurers must adjust their practices to reimburse over-the-counter or alternative remedies when properly prescribed, without imposing provider billing form requirements on employees.
Workers’ compensation tribunals and UROs will see an uptick in utilization review disputes over the reasonableness and necessity of alternative treatments, rather than threshold coverage battles.
The ruling may spur health care providers to explore and prescribe a wider range of therapies, knowing their patients’ employers must pay for them under the WCA.

Complex Concepts Simplified

Section 306(f.1)(1)(i) WCA: The cornerstone of employer liability for “reasonable surgical and medical services … medicines and supplies.” It does not separately define “medicines” or “supplies,” so both terms are read together.
Cost-Containment Regulations (34 Pa. Code §§ 127.201–127.202): Rules requiring licensed providers to submit bills on standard forms. They do not apply to injured employees seeking reimbursement.
Health Care Provider: Any person or entity licensed to offer medical services. Claimants are not providers.
Utilization Review (URO): A statutory process (77 P.S. § 531(6), 34 Pa. Code §§ 127.459–127.471) for challenging whether a treatment is “reasonable or necessary.” It does not govern initial coverage under Section 306(f.1)(1)(i).
FDA Approval: Whether a therapy is FDA-approved affects its reasonableness or legality but is not a prerequisite for coverage under the WCA’s plain language.

Conclusion

The Supreme Court’s decision in Schmidt clarifies and expands the remedial reach of the Workers’ Compensation Act’s medical payment provision. By holding that any item prescribed by a health care provider as part of a work-related treatment plan qualifies as “medicines and supplies,” the Court ensures that injured workers receive comprehensive coverage—even for unconventional or over-the-counter remedies such as CBD oil—so long as they are professionally recommended. Simultaneously, it relieves non-provider claimants of burdensome provider billing rules and directs disputes over safety, efficacy, or cost to the utilization review process. In doing so, the ruling reaffirms the WCA’s humanitarian purpose: to facilitate access to necessary medical care for injured employees without undue procedural obstacles.