Krohn v. Home–owners Ins. Co.

Decision Date29 July 2011
Docket NumberDocket No. 140945.
Citation490 Mich. 145,802 N.W.2d 281
PartiesKevin KROHN, Plaintiff–Appellant,v.HOME–OWNERS INSURANCE COMPANY, Defendant–Appellee.
CourtMichigan Supreme Court


Logeman, Iafrate & Pollard, P.C. (by Craig J. Pollard), Ann Arbor, for plaintiff.Conlin, McKenney & Philbrick, P.C. (by Alen J. Philbrick), Ann Arbor, for defendant.Dykema Gossett PLLC (by Jill M. Wheaton and Joseph Erhardt), Ann Arbor, for amicus curiae the Michigan Catastrophic Claims Association.Speaker Law Firm, PLLC (by Liisa R. Speaker), Kalamazoo, and Sinas Dramis Brake Boughton & McIntyre PC (by George T. Sinas), Lansing, for amicus curiae the Coalition Protecting Auto No–Fault.Clark Hill PLC (by James E. Brenner), Detroit, for amicus curiae the Michigan Defense Trial Counsel.ZAHRA, J.

Plaintiff, Kevin Krohn, who suffered an extremely severe spinal fracture that left him paraplegic, brought this suit under the no-fault act, MCL 500.3101 et seq. Plaintiff sought personal protection insurance benefits from defendant, Home–Owners Insurance Company, to cover costs incurred for a surgical procedure performed in Portugal. It is undisputed that this surgical procedure was experimental and not a generally accepted treatment for plaintiff's injury. The dispositive question presented in this case is whether this experimental procedure was a reasonably necessary service for plaintiff's care, recovery, or rehabilitation under MCL 500.3107(1)(a). We conclude that if a medical treatment is experimental and not generally accepted within the medical community, an insured seeking reimbursement for this treatment must, at a minimum, present objective and verifiable medical evidence establishing that the treatment is efficacious. A treatment or procedure that has not been shown to be efficacious cannot be reasonable or necessary under the no-fault act. An insured's subjective belief that medical treatment is efficacious, reasonable, and necessary is not enough to create a question of fact. Viewed in the light most favorable to plaintiff, the objective and verifiable medical evidence presented at trial failed to establish that the experimental surgical procedure at issue was in any way efficacious in plaintiff's care, recovery, or rehabilitation. Plaintiff's expert witnesses merely opined that plaintiff's decision to undertake the experimental surgical procedure was an “understandable” personal decision that offered plaintiff only a medically unproven “possibility,” or hope, for an efficacious result. Therefore, the procedure was not an allowable expense under MCL 500.3107(1)(a). We affirm the judgment of the Court of Appeals.1


On December 11, 2001, plaintiff was struck head-on by a large van while riding his motorcycle. Plaintiff suffered a severe spinal fracture that left him paraplegic, without sensation or function below the mid-chest area (“injury site”). Consequently, plaintiff was unable to touch his feet, move any part of his lower body, or determine when to relieve himself. Plaintiff underwent intensive physical therapy but did not regain any sensation below the injury site and was released from the program.

While investigating treatment options, plaintiff discovered a procedure known as olfactory ensheathing glial cell transplantation, an experimental surgery performed in Portugal. The procedure involves transplanting tissue from behind the patient's sinus cavities, which contains stem cells, to the injury site. The theory behind the procedure is that, once applied to the injury site, the transplanted stem cells could develop into spinal cord nerves. The procedure is not approved by the United States Food and Drug Administration (FDA) and therefore cannot be legally performed in the United States. In addition, there is insufficient existing research to allow for clinical trials, including controlled studies, peer review, and publication for FDA evaluation. Thus far, no one has applied for FDA approval of the procedure for any purpose.

In March 2005, plaintiff visited the Rehabilitation Institute of Michigan (RIM) and discussed the procedure with Dr. Steven Hinderer. Dr. Hinderer specializes in physical medicine and rehabilitation and is the medical director of the Center for Spinal Cord Injury Recovery Program (CSCIRP). Dr. Hinderer explained to plaintiff that he could not endorse or in any way recommend the procedure because it was highly experimental, had not yet been approved by the FDA, could not be legally performed anywhere in the United States, and lacked medical evidence to establish its efficacy.2 Neither party disputes that no one had yet applied for FDA approval of the procedure for any purpose, and the existing research was insufficient to allow clinical trials to begin. Dr. Hinderer also informed plaintiff that the procedure was not part of standard clinical care and was not likely to be covered by insurance. After consulting with Dr. Hinderer, plaintiff met with a patient who had undergone the procedure. Plaintiff claimed that this individual was able to stand on a device similar to a treadmill and walk with braces after the procedure.3

After seeking advice from family members, plaintiff decided to undergo the procedure in Portugal. Plaintiff's primary health insurer denied coverage. Plaintiff then sought coverage from defendant, a no-fault auto insurance provider. Defendant's claims specialist told plaintiff that defendant would pay for testing to determine whether plaintiff medically qualified for the procedure, but would not pay for the procedure itself because it was experimental, non-FDA approved, and illegal to perform in the United States.

Plaintiff traveled to Portugal and underwent the procedure on November 10, 2005. Ten days later, plaintiff returned to the United States and began what he described as a grueling physical therapy program at the RIM, entailing four-hour therapy sessions three times a week. Defendant paid for all the postsurgical physical therapy treatment plaintiff received. Plaintiff filed suit against defendant to recover the expenses he incurred traveling to and from Portugal and undergoing the surgery. At trial, plaintiff testified that he noticed improvements immediately after the procedure. Specifically, plaintiff testified that he could sometimes move his legs, crawl forward and backward, and control bowel and bladder movements, resulting in fewer urinary tract infections.

Dr. Hinderer testified that plaintiff had experienced “some small amount of voluntary motor function” after the procedure. Dr. Hinderer also testified that it was not possible to conclude that these minor improvements were the result of the procedure. Dr. Hinderer acknowledged that the intense physical therapy program in which plaintiff engaged postprocedure could alone have accounted for plaintiff's improvements.4 Dr. Hinderer testified about the highly experimental nature of the procedure. He described plaintiff's decision to undergo the procedure as a “personal choice” and acknowledged that this procedure was not considered necessary to the treatment and care of spinal cord injuries.

Dr. Carl Lima, a neurologist and neuropathologist at a public hospital in Portugal who is not licensed in the United States, was a member of plaintiff's surgical team, but did not perform the procedure. According to Dr. Lima, experimental data showed that transplanting nasal tissue, which contains stem cells, to the injury site provides functional recovery of neurons. He testified that this research had begun 18 years earlier on guinea pigs. There was no evidence presented at trial that the procedure has been efficacious in guinea pigs. The testimony established only that the procedure could be performed on guinea pigs without the guinea pigs' developing infections or forming tumors.

Dr. Lima testified that he started conducting human trials of the procedure in the government-operated hospital where he works, which sanctions the procedure for research purposes. No testimony was offered to suggest that the hospital had sanctioned the procedure because of its efficaciousness. Dr. Lima testified that, since 2001, 110 patients have undergone the procedure; however, Dr. Lima did not offer testimony regarding individual patients, the severity or location of their injuries, the outcomes following their procedures, or their prognoses. Dr. Lima published a paper in 2006 that summarized the outcome for seven patients who had undergone the procedure. All seven patients engaged in physical therapy following the procedure, but only two of the seven showed improvements in bladder and bowel control. Although there had been no controlled clinical studies regarding this procedure, Dr. Lima testified, “I would say the majority of the patients have some kind of improvement.” 5

Dr. Lima found plaintiff's spinal cord injury to be one of the most severe injuries that he had ever treated. Dr. Lima testified that he was very surprised by the “quite unexpected” results of plaintiff's procedure. Dr. Lima acknowledged that plaintiff would never fully recover from such a severe injury. Nonetheless, Dr. Lima testified that the procedure was necessary to allow plaintiff a chance at some recovery. He added that any degree of recovery requires physical therapy. Although Dr. Lima conceded that the procedure was experimental, he opined that it was reasonably necessary because a person with a chronic spinal cord injury has no other available option. The lack of FDA approval did not change Dr. Lima's opinion.

Defendant moved for a directed verdict, arguing that as a matter of law, experimental surgery is not “reasonably necessary” under the no-fault act. The trial court denied defendant's motion, ruling that whether the procedure was “reasonably necessary” was a question of fact. The jury rendered a verdict in favor of plaintiff, concluding that the procedure was reasonably necessary. Judgment was entered, awarding plai...

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