Kevin Krohn, who became a paraplegic as a result of a motorcycle accident, underwent an experimental medical procedure – olfactory ensheathing glia cell transplantation – that involved surgery followed by intensive physical therapy. This procedure, which was being performed in Portugal, is not approved by the Food and Drug Administration; it is illegal to perform the surgery in the United States.
In March 2005, before undergoing the procedure, Krohn met with Dr. Steven Hinderer of the Rehabilitation Institute of Michigan. Hinderer, who specializes in physical medicine and rehabilitation, told Krohn that he could not recommend the experimental procedure. Krohn’s health insurer denied coverage, as did Krohn’s no-fault auto insurer, Home-Owners Insurance Company. Home-Owners told Krohn that it would pay for physical therapy and for testing to determine if he was a candidate for the surgery. But Home-Owners refused to pay for the surgery itself, noting that the procedure was experimental, lacked FDA approval, and could not be performed in the U.S.
Krohn elected to pay for the procedure himself. Ten days after undergoing the surgery in Portugal, he returned to the U.S, and began a physical therapy program at the Rehabilitative Institute.
Krohn sued Home-Owners under the state’s no-fault act to recover out-of-pocket costs of about $51,000. At trial, Krohn testified that he noticed improvement immediately after the surgery. The evidence included video depositions of Hinderer and Dr. Lima, a member of the medical team that operated on Krohn. Hinderer testified that he did not prescribe or recommend the experimental surgery for Krohn, and that the procedure is not part of the standard clinical care for patients suffering from spinal cord injuries. With respect to Krohn’s claimed improvement, Hinderer testified that he would not be able to determine whether any improvement was due to the surgery, the aggressive physical therapy program, or a combination of both. The doctor acknowledged that he could not recall any patient with such a severe spinal cord injury improving with physical therapy alone to the same extent that Krohn experienced following the surgery.
Lima, a neurologist and neuropathologist at a Lisbon hospital, testified about his research and the procedure. He acknowledged that the surgery was experimental, but opined that it was reasonably necessary because there was no other option for a person with a chronic spinal cord injury.
Home-Owners moved for a directed verdict, arguing that the surgery was not covered by the no-fault act because it was neither “reasonably necessary” under MCL 500.3107(1)(a)
nor “lawfully rendered” under MCL 500.3157. Under MCL 500.3107(1)(a)
, “personal protection insurance benefits are payable for . . . (a) Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation. . . .” MCL 500.3157 states in part: “A physician, hospital, clinic or other person or institution lawfully rendering treatment to an injured person for an accidental bodily injury covered by personal protection insurance, and a person or institution providing rehabilitative occupational training following the injury, may charge a reasonable amount for the products, services and accommodations rendered. . . .” But the trial court denied Home-Owners’ motion and the jury returned a unanimous verdict in favor of Krohn, finding that the surgery was reasonable and necessary. Krohn was awarded $51,412.85 in allowable expenses, along with interest, case evaluation sanctions, and taxable costs.
On Home-Owners’ appeal, the Court of Appeals reversed the trial court and remanded for entry of judgment in favor of Home-Owners. The majority held that Krohn’s surgery was not reasonably necessary, noting that Krohn’s own treating physician, Hinderer, did not testify that the procedure was either reasonable or necessary. Lima was not qualified to testify under MRE 702, the majority said; moreover, Lima acknowledged that the procedure had not gained general acceptance in the international medical community. “We reject the argument that defendant is required to pay for the costs of experimental surgery that is part of an experimental human clinical trial still in its infancy in another country,” the majority concluded. The dissenting judge, who voted to affirm the jury’s verdict, criticized the majority for raising sua sponte – on its own motion – the issue of the admissibility of Lima’s testimony. Krohn presented sufficient facts and circumstances to present the issue of the treatment’s reasonableness and necessity to the jury, the dissenting judge stated. Krohn appeals.