Michigan Supreme Court; Docket #140945; Published
Opinion by Justice Zahra, joined by Justices Markman, Young, and Mary Beth Kelly
Official Michigan Reporter Citation: Forthcoming; Link to Opinion 
Link to COA Summary
STATUTORY INDEXING:
Allowable Expenses for Medical Treatment [§3107(1)(a)]
Allowable Expenses: Reasonable Necessity Requirement [§3107(1)(a)]
Allowable Expenses for Experimental Treatment [§3107(1)(a)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this 4-3 Opinion by Justice Zahra, joined by Justices Markman, Young, and Mary Beth Kelly, the Supreme Court dealt with the issue of whether an experimental medical procedure involving transplanting stem cells from a quadriplegic patient’s sinus cavities to his damaged spinal cord was a “reasonably necessary” expense for plaintiff’s care, recovery, or rehabilitation under Section 3107(1)(a). In resolving this issue, the majority opinion articulated the following rule:
“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.”
The plaintiff in this case was a paraplegic who had virtually no anatomical function below the site of his spinal cord injury. This included complete loss of normal bowel and bladder functions. The stem cell procedure in question was developed and performed in Portugal. Plaintiff was one of many patients from Michigan who had heard about the procedure and went to Portugal for treatment. The plaintiff in this case was a patient at the Rehabilitation Institute of Michigan where he was under the care of Dr. Steven Hinderer. After plaintiff underwent the procedure in Portugal, he reported significant improvement, including regaining some bowel and bladder function, and some sensory function. Dr. Hinderer acknowledged that the stem cell procedure in question had not received FDA approval and that it was “certainly not standard of practice given its experimental nature.” Dr. Hinderer went on to characterize the procedure as one where “we don’t know the outcomes yet because this is such a new procedure.” Based on Dr. Hinderer’s testimony, the majority concluded that “Dr. Hinderer’s testimony does not provide any evidence that the experimental procedure presented plaintiff a medically verifiable chance that it would be efficacious in his care, recovery, or rehabilitation. Accordingly, Dr. Hinderer’s testimony did not provide an objective basis from which a jury could conclude that the experimental surgical procedure was reasonably necessary.”
In reaching its conclusion, however, the Court emphasized that it was not holding that experimental procedures are, ipso facto, barred from reimbursement under section 3107(1)(a). On the contrary, the Court stated:
“We reject defendant’s position and conclude that experimental treatments are not necessarily barred from being compensable under the no-fault act. The ultimate question whether the surgical procedure at issue here is a covered expense under the no-fault act does not turn on its status as experimental. Rather, like all claims for allowable expenses, the question turns on whether the procedure was reasonably necessary for plaintiff’s care, recovery, or rehabilitation.”
The Court then went on to hold that the determination of whether a procedure is reasonably necessary is a determination that requires the use of an objective standard. In this regard, the Court stated:
“Accordingly, we conclude that reasonableness is not based merely on the subjective perception that a service is necessary for an injured person’s care, recovery, or rehabilitation. Rather, the term “reasonably” must be determined under an objective perspective…having determined that the term “reasonably necessary” must be assessed from an objective perspective, we next consider what it is that must be reasonably necessary under MCL 500.3107(1)(a)…a service, product or accommodation must be (1) objectively reasonable and (2) necessary for an insured’s care, recovery, or rehabilitation. If, as in this case, the service under consideration is an experimental surgical procedure, the insured must present evidence that the surgery may result in care, recovery or rehabilitation. In other words, there must be evidence that the surgery is efficacious. Further, because a surgery involves the exercise of medical judgment, the efficacy determination must be based on objective and verifiable medical evidence. Experimental surgical procedures lacking objective and verifiable medical evidence of their efficacy cannot be “reasonably necessary” simply because it cannot be shown to effect the insured’s care, recovery or rehabilitation. To interpret MCL 500.3107(1)(a) as allowing reimbursement for non efficacious experimental treatments “for an injured person’s care, recovery, or rehabilitation” would be to read the phrase “reasonably necessary” out of this provision.”
The Court then addressed the nature of the proof that plaintiff must offer to satisfy this “threshold” determination that there is objective and verifiable evidence of the efficacy of experimental treatment. In this regard, the Court stated:
“If a surgical procedure is experimental, an insured cannot establish its reasonable necessity under MCL 500.3107 unless expert testimony indicates that the surgery presents a reasonable chance that it will be efficacious in the injured person’s care, recovery, or rehabilitation. Contrary to the Court of Appeals’ holding in this case, an insured is not required to prove that an experimental surgical procedure gained general acceptance in the medical community before its reasonable necessity becomes a question for consideration by the trier of fact. MCL 500.3107(1)(a) does not require that medical treatment be shown to have gained general acceptance within the medical community. Rather, an insured must present objective and verifiable medical evidence that medical treatment is efficacious in an injured person’s care, recovery, or rehabilitation. If there is objective and verifiable evidence that an experimental surgical procedure is efficacious, the finder of fact can begin to make an informed decision in regard to whether the treatment was reasonably necessary by considering whatever factors were relevant in that case, which may include but are not limited to the severity and chronicity of the condition, the outcomes of any previous treatments, the likelihood that alternative treatments would be efficacious, a personal physician’s recommendation in conjunction with the a patient’s preference, and both the short-term and long-term risks and benefits. Absent objective evidence to establish that the experimental surgical procedure is at least efficacious, there would not exist a material question of fact about whether the medical treatment was reasonably necessary to the care recovery or rehabilitation of an insured.”
Based on the foregoing, the Court ultimately concluded that the plaintiff had failed to meet this burden “that the experimental surgical procedure at issue presented him with an objectively verifiable chance that it would be efficacious in his care, recovery, or rehabilitation. Therefore, defendant was entitled to judgment as a matter of law because plaintiff did not meet the minimum threshold for recovery.”
A vigorous dissent was written by Justice Hathaway, who was joined by Justice Cavanagh and Justice Marilyn Kelly. In her dissent, Justice Hathaway wrote: “today’s decision erroneously changes the mandates of the no-fault act and replaces them with standards that are inconsistent with the language and history of that act…the majority also errs because it misconstrues the meaning of the term ‘reasonably necessary’. Without any statutory support, it interprets the word “reasonably” to mean “objective and verifiable.” The majority then declares that the term “necessary” creates a strict standard requiring “evidence” of “efficacy.”…under the majority’s own stated principle, words cannot be read into this statute…For all practical purposes, this is a “medically necessary” or “medically appropriate” standard, despite the majority statements to the contrary.”
The dissenting opinion also went on to state that the majority opinion is a patently unreasonable interpretation of Section 3107(1)(a) because similar concepts were rejected by Michigan voters when they defeated the no-fault referendum identified as 1993 PA 143. This referendum dealt with a statutory amendment passed by the Michigan Legislature that amended Section 3107 so as to adopt a “medically necessary or medically appropriate standard” that prohibited coverage for “experimental treatment” and would have required that courts decide claims under Section 3107(1)(a) as questions of law rather than questions of fact.
The majority opinion bristled at the suggestion that it was somehow adopting legal standards that the legislative process had rejected. In this regard, the majority opinion responds to the dissent by stating:
“This case does not turn on any aspect of 1993 PA 143. As already stated, we reject defendant’s claim that plaintiff cannot prevail merely because the procedure was experimental. We also reject the Court of Appeal’s holding that an insured is required to prove that an experimental surgical procedure has gained general acceptance in the medical community before consideration by the trier of fact. The question whether an experimental treatment is reasonably necessary for an insured’s care, recovery, or rehabilitation must be resolved by a fact-finder if the insured can present objective and verifiable medical evidence to support the conclusion that the treatment is efficacious.”…”And contrary to the dissent’s representation, we do not hold that the objective and verifiable medical evidence must include ‘controlled studies subject to peer review or scholarly publications’ supporting the science behind the surgery. Likewise, we are in no way suggesting that data from the FDA are required. Rather, these are additional examples of objective and verifiable evidence that can establish efficacy. Presentation by an expert witness of any of this objective and verifiable evidence, even if opposed by several witnesses claiming the proposed medical treatment is not efficacious, is sufficient to sustain plaintiff’s burden. Since we are not medical experts, we are not going to artificially limit the types of objective and verifiable evidence that a party may present to support its claim; instead, we simply note that there must be some evidence from the medical community that a particular procedure would have some beneficial effect on a person’s ‘care, recovery, or rehabilitation’ in accordance with MCL 500.3107(1)(a).…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 in this case was any way efficacious in the care, recovery, or rehabilitation of plaintiff’s injury.”
