Medicinal cannabis and CTP treatment disputes: Review Panel rejects reimbursement as not accident-related (and not reasonable and necessary)

Insurance Australia Limited t/as NRMA Insurance & Anor v McCarthy [2026] NSWPICMP 184

In Insurance Australia Limited t/as NRMA Insurance & Anor v McCarthy [2026] NSWPICMP 184, the NSW Personal Injury Commission Review Panel revoked a Medical Assessor’s certificate which had approved the reimbursement of medicinal cannabis for a claimant diagnosed with post-traumatic stress disorder (PTSD) following a motor accident. The Panel held that the medicinal cannabis was neither “related to the injury caused by the motor accident” nor “reasonable and necessary in the circumstances” for the purposes of s 3.24(2) of the Motor Accident Injuries Act 2017 (NSW) (MAI Act). The decision is a useful illustration of the Commission’s approach to treatment disputes involving medicinal cannabis, particularly where a claimant has a substantial pre-accident psychiatric history and the evidentiary record shows mixed or diminishing clinical benefit.

Background

The claimant was injured on 11 April 2019 when, while stationary on his motorbike at a stop sign, the insured vehicle reversed into him. He later received a diagnosis of PTSD. Medicinal cannabis was prescribed by the claimant’s general practitioner, and that prescribing decision was supported by the claimant’s treating psychiatrist.

In May 2022 the insurer declined to reimburse a pharmacy claim for medicinal cannabis. Following internal review and referral to the Commission, Medical Assessor Samuell issued a certificate in November 2023 finding the medicinal cannabis was both related to the accident and reasonable and necessary. The insurer sought review of that determination and the Lifetime Care and Support Authority (CTP Care) was later joined as a party, given the potential for any treatment dispute to have consequences beyond the five-year statutory benefits period.

The claimant did not attend the scheduled medical assessment and could not be contacted by his solicitors. In those circumstances, the Review Panel proceeded to determine the dispute on the papers.

Statutory test and evaluative framework

Section 3.24(2) of the MAI Act provides that statutory benefits are not payable for treatment and care unless the treatment is reasonable and necessary and related to the injury caused by the motor accident. The Panel approached the provision as imposing two cumulative requirements; unless both limbs are satisfied, payment is not available.

In addressing “reasonable and necessary”, the Panel had regard to the Clinical Framework for the Delivery of Health Services referenced in the Motor Accident Guidelines. The Panel also considered the factors identified in Diab v NRMA Ltd as relevant (although not determinative) to reasonableness, including whether the treatment is appropriate, whether there are available alternatives, whether it is cost effective, whether it has actual or potential effectiveness, and the extent to which it is accepted by medical experts.

The “related to the injury” limb: why the Panel found the causal link was not established

The key to the Panel’s conclusion on relatedness was the claimant’s extensive pre-accident psychiatric history. Clinical records dating back to 2016 documented longstanding anxiety, panic disorder, and obsessive-compulsive traits, as well as multiple medication trials, psychiatric referrals, and periods of being unfit for work prior to the 2019 accident. That history was not treated as background noise. Instead, it was central to the Panel’s evaluative task of identifying what condition the medicinal cannabis was being prescribed to treat, and whether that condition was an injury caused by the accident.

A prior 2023 Medical Review Panel had already found that the claimant suffered from pre-existing generalised anxiety disorder, OCD, and a probable panic disorder which were aggravated (rather than caused) by the accident, alongside a diagnosis of PTSD. Against that clinical landscape, the Panel focused on the content of the TGA approval supporting the claimant’s medicinal cannabis prescription, which was for anxiety rather than PTSD.

The Panel did not accept the original Medical Assessor’s reasoning that PTSD contains a “significant anxiety component” such that a prescription approved for anxiety could be treated as sufficiently directed to PTSD for the purposes of s 3.24(2). The Panel observed that anxiety is not itself a diagnostic criterion of PTSD under DSM-5-TR and considered that, on the available material, the claimant’s anxiety symptoms were better explained by the pre-existing generalised anxiety disorder than by accident-caused PTSD. On that footing, the Panel characterised the prescription as treatment for anxiety symptoms referable to a pre-existing condition and held that it was not established to be related to an injury caused by the motor accident.

The “reasonable and necessary” limb: why the Panel found the treatment was not justified in the circumstances

The Panel also considered whether medicinal cannabis was reasonable and necessary in the claimant’s particular circumstances, assessing the evidence of efficacy over time, the availability of alternatives, and the risk profile of THC-based products. In doing so, the Panel placed weight on professional guidance and contemporaneous clinical records rather than isolated statements of early improvement.

The Panel noted that the RANZCP clinical memoranda (2021 and 2024) describe the evidence base for medicinal cannabis as limited. The memoranda were treated as important evidence for assessing expert acceptance and the quality of evidence supporting the claimed therapeutic benefit, particularly in relation to PTSD where the evidence was described as very limited. The Panel also noted that the claimant had previously ceased CBD oil because it increased his anxiety, and that two treating psychiatrists separately reported the same adverse reaction. While there were some early reports of benefit for sleep and intrusive thoughts, later clinical notes recorded that the cannabis was “not helping with his sleep”, which the Panel regarded as indicating that any benefit was not sustained.

The Panel further observed that by mid-2022 the claimant’s routine psychiatric medication had narrowed to mirtazapine and diazepam, being conventional treatments used in PTSD management. In weighing risks against claimed benefit, the Panel took into account recognised adverse effects of THC-based products, including disorientation, dizziness, euphoria and confusion, and the potential for elevated motor accident risk while driving. Ultimately, the Panel was not persuaded that any short-term benefit outweighed the potential for harm and concluded that the medicinal cannabis was not reasonable and necessary in the circumstances.

Outcome

The Review Panel revoked Medical Assessor Samuell’s certificate dated 20 November 2023. It found that the medicinal cannabis prescribed by the claimant’s GP did not relate to the injury caused by the accident and that the treatment was not reasonable and necessary in the circumstances.

Practical implications for claimants and practitioners

The decision does not stand for the proposition that medicinal cannabis can never be funded under the NSW CTP statutory benefits scheme. It does, however, demonstrate that treatment disputes will be decided by close attention to diagnosis, authorisation, and clinical efficacy. Where the claimant has a complex pre-accident psychiatric history, the Commission is likely to scrutinise whether the symptoms said to be treated by cannabis are truly attributable to an accident-caused condition or are better explained by a pre-existing disorder.

The case also highlights the importance of ensuring that the evidentiary record matches the statutory requirements in s 3.24(2). In practical terms, claimants and their legal advisers should be able to point to treating material that clearly links the prescription to the accident-related diagnosis.