Fraud & Medical Marijuana

Requests for medical marijuana have skyrocketed.  Some reports estimate an increase anywhere between 50% and 300% since President Obama took office and indicated that he wouldn’t override state laws with federal ones as the Bush administration did.

In November, the American Medical Association changed it’s tune with regard to the potential medical benefits of marijuana.  The AMA “urges that marijuana’s status as a federal Schedule I controlled substance be reviewed with the goal of facilitating the conduct of clinical research and development of cannabinoid-based medicines.”  The statement indicates that the AMA is not endorsing legalization of marijuana but that further research is warranted.

The announcement comes exactly one year after the Michigan Medical Marihuana Act was voted into effect.  According to the Michigan Medical Marihuana Program (MMMP) website, more than 12,000 people have registered for the program since it’s inception – an average of 71 applications per day!

Perhaps marijuana does have medicinal benefits.  But can such programs contribute to an increase in fraud?  You bet.  Unscrupulous workers seeking a little relaxation may be inclined to fake a workplace injury, begin receiving workers compensation benefits and get a doctor to prescribe some cannabis for their “ailment”.   What’s better than a paid vacation from work – especially when that vacation comes with a free pass to get high?  Insurance fraud with a bonus.


12 Responses to Fraud & Medical Marijuana

  1. woodbutcher says:

    That is the single most idiotic anology i have ever heard. Cannabis is already so widely aval that it is easier to find than a grocery store in most neighborhoods . & if people wanted to fake an injury to get drugs there are already a whole laundry list of aval substances that will get you much higher than cannabis.Medical cannabis saves lives there no way to deny this any longer. With in the next couple yrs we will have legal cannabis for recreational use in several states so the prohibitionists are just going to have to get over this .In 5000 yrs of use this plant has never caused a over dose death we cant eve say that about tylenol that kills over 20thousnad people a yr our former drug czar has called it the most theraputicly safe substance known to man.So if you want to look for fraud look at why big pharma backs keeping this illegal when a safe inexpensive plant that can help releive pain from a variety of illnesses is still being lied about and kept from the public

  2. James Ruotolo says:

    Thanks for your comment. I’m not debating the medical efficacy of cannabis. That’s a topic for another discussion. But research has shown that a rather large percentage of the population tolerates insurance fraud – and many believe that it’s a victimless crime. In this set of circumstances, those who might choose to avoid an illegal drug like marijuana may choose instead to commit insurance fraud in an effort to legally obtain the drug. This type of drug diversion is common for all sorts of medications, especially narcotics. There is no reason to think that cannabis would be any different.

  3. woodbutcher says:

    All the more reason that it should be legal for any one over 18 to grow or purchase from a licensed grower that has proven that they are able to produce a quality product w/o using any dangerous pesticides or chemicals like the ones that are used in our food supply. As for insurance fraud I seriuosly doubt that any one is going to start caring about the insurance company’s profits the way they treat thier customers these days after canceling policys over 1 accident your fault or not.. or the way that they have bled familys dry for health insurance for yrs. deny ng coverage for pre existing conditions Insurance should be heavily regulated by the govt with no profits going to a few people since it is a requirement for most people who own a vehicle or home or what ever . health and auto insurance should never have been allowed to be a for profit industry since it is now required for auto’s and soon wll be required for peoples health. A few already wealthy people should not be profiting off what is required by a law. If it was run as a nonprofit orginization people would pay far less inclined to sue for as many frivolous claims. and the savings from this would show up in the now failing economy almost overnite..

  4. Jeff says:

    What about all the fraud the insurance industry has carried out on America?? AIG anyone?

    If you can get your weed and rent paid for by an insurance company than more power to you.

  5. Dennis Jay says:

    Jeff says: “If you can get your weed and rent paid for by an insurance company than more power to you.”

    Only problem is we who choose not to cheat end up subsidizing pot-smoking fraudsters by paying increased premiums. Not cool.

  6. James Ruotolo says:

    On Monday, the NJ legislature approved the New Jersey Compassionate Medical Marijuana Act. NJ becomes the 14th state in the nation to pass such a bill, though it now awaits the governor’s signature. Experts say that this is the most strict of all medical marijuana laws passed thus far in the US. One of the biggest restrictions compared to other states: stress and anxiety do not qualify as diagnoses that are eligible for treatment with medical marijuana. More at

  7. Kevin says:

    I enjoy your blog James! You seem to touch on a number of different areas relevant to the industry and it provides a good read. As an individual looking to make a career within this line of work I definitely will be revisiting.

  8. The MMMP lists the specific ailments a patient must have in order to be considered for a recommendation (not technically a prescription) for medicinal marijuana. Unless you have cancer, HIV, AIDS, (more) or at least a proven history of chronic and debilitating pain verified by a licensed MD you can’t get it. Also, marijuana is not covered by insurance for treatment.

    A person cannot fake an injury and have access to pot, it doesn’t work that way, the guidelines are clear. Therefore, a person has no additional incentive to commit insurance fraud based on the potential for being able to use marijuana paid for by their insurer.

  9. James Ruotolo says:

    Thanks Kevin. I understand the way it is SUPPOSED to work. But the fact is that some people will see this as an opportunity to scam the system. If everyone always followed the rules, there wouldn’t be any insurance fraud at all. But there is. One of the “specific” ailments you describe includes “severe and chronic pain.” That’s anything but specific. I don’t deny that any patient that has legitimate symptoms the right to any and all means of legal medical treatment. And while most licensed MDs are ethical, there are a small percentage of doctors who are not. And my observation is that this new law presents a new opportunity for unscrupulous patients and doctors to exploit.

  10. SIU Sam says:

    In Los Angeles there have been a number of structure fires that were caused by the lighting systems used to grow marijuana. The majority of these fires occurred at businesses that grow medical marijuana. It seems that some medical marijuana growers are more interested in making a fast buck off of their weed then they are interested in the safety of their neighbors. The voters have spoken on medical marijuana. Now we need some regulation on the growers so they dont burn down the place with their shoddy electrical systems used for their grow lights. Looks like they arent immune to reed either…what a shock!

  11. It shouldn’t be surprising that requests for medical marijuana have skyrocketed because a legal market for the substance has never existed before in the U.S., and there is pent-up demand. High growth rates are a hallmark of new, unpenetrated markets (e.g. growth of Internet users in the mid-’90s).

    A clarification regarding the Obama administration’s position: They have said that they will respect state’s rights (which, BTW, has historically been the policy of the Republican party) but that they will prosecute those who violate both state and federal laws. That was the rationale behind the DEA’s raid of Emmalyn’s cannabis club in San Francisco in March 2009, which was just three months into Obama’s presidency.

    I would challenge you to produce evidence of a causal relationship between the introduction of medical marijuana programs and an increase in insurance fraud. As others have already posted, workers have been filing fraudulent claims to obtain narcotics such as Vicodin and Oxycontin from unscrupulous providers for many years. The availability of one additional drug is unlikely to boost the total number of fraudulent claims, considering the pharmaceutical industry introduces new painkillers every year.

    In addition, I know of no insurance carrier that will pay medical benefits for marijuana. So any worker who wants to stay home and smoke will have to pay out of pocket. Even if the worker is getting permanent total disability, he or she is unlikely to receive any more money each month than he or she would have received while working. So the worker won’t receive an extra stipend for marijuana.

    BTW, I’m not advocating for or against medical marijuana. I just think your argument is flawed.

  12. Bill Curry says:

    “medical marijuana” is a scam !!! Its a fraud perpetrated by pot heads who just want the excuse to smoke. get real! read this

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