Author(s): Emily Lee Partridge

JURY FINDS THAT AN EXPERIMENTAL STEM CELL SURGERY PERFORMED IN CHINA IS NOT A REASONABLY NECESSARY MEDICAL EXPENSE PURSUANT TO MCL 500.3107

In Baumgard v Farmers Insurance Exchange, unpublished opinion per curiam of the Court of Appeals, issued March 24, 2009 (Docket No. 281589), the plaintiff appealed the jury’s verdict in favor of Farmers, arguing that Farmers had wrongfully denied payment of PIP benefits for an experimental stem cell transplant received in Beijing, China.

The plaintiff argued that Farmers had pre-authorized, or she had reasonably believed, that Farmers had preauthorized the stem cell surgery in China. She Claimed that Farmers had paid for the rehabilitation which was a precondition for the stem cell surgery and that Farmers had not responded to a letter from her treating physician. However, the appellate court pointed out that Farmers had specifically informed the plaintiff that it was not its “practice to preauthorize or pre- guarantee payment for any treatments.” Furthermore, Farmers had stated that it did “not view the surgery as an appropriate allowable expense under MCL 500.3107.” Clearly, the evidence established that Farmers had not preauthorized or guaranteed payment for an experimental surgical procedure.

Next, the plaintiff argued that the jury should have found the stem cell surgery was a reasonably necessary expense based upon the testimony of her treating physician, Dr. Steven Hinderer. However, Dr. Hinderer’s testimony actually showed that he had, understandably, provided emotional support to his patient for the decisions that SHE had made regarding her own treatment, namely, traveling to Beijing, China for an experimental stem cell surgery. However, he had NOT actually recommended or advised his patient to undergo the surgery as the benefits of the experimental treatment were still unknown.

This case follows the well-established principle that an expense needs to have been “incurred” in order for consideration to be made as to payment for a claimed PIP benefit pursuant to MCL 500.3107. Moreover, it distinguishes the difference between when a treating physician has a medical opinion as to whether a course of treatment is reasonable and necessary and when he is simply being emotionally supportive of a patient’s decisions regarding her own treatment.

{Editor’s Note: Some physicians prescribe therapies which may not be proven to have scientific validity. One recent example is the use of hyperbaric oxygen treatment for TBI. Also, many physicians prescribe or administer drugs which are “off label” (i.e., not FDA approved). Whether this falls within the definition of “experimental” use, and therefore not compensable as a no-fault benefit, will be discussed at the Firm’s Breakfast Seminar in Troy on November 5, 2009.}

Friend of Court Liens: Part II

In a previous Law Fax article (Volume XXI, No. 7), we looked at whether a Friend of Court Lien could reach a settlement in a 3rd party automobile negligence suit or compensation under a worker’s compensation order or settlement. We found that under MCL 552.625c, a title IV-D agency (Friend of Court) may levy against both settlements in a 3rd party automobile negligence suit and compensation under a worker’s compensation order or settlement. See Volume XXI, No. 7, February 18, 2009, for a discussion on 3rd party negligence suits and worker’s compensation.

2 Ms. Stuursma is a Shareholder with our Grand Rapids Office and can be reached at (616)242-5562 or astuursma@garanlucow.com ; Ms. Velting is an Associate with our Grand Rapids Office and can be reached at (616)242-2723 or tvelting@garanlucow.com

In this Law Fax, Part II on Friend of the Court Liens, we look at whether Friend of the Court Liens can reach first party no-fault benefits, specifically medical, work loss, and replacement services.

MCL 500.3107 sets forth the benefits available under the statute:

“(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…

(b) Work loss consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured…

(c) Expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he or she had not been injured, an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or herself or of his or her dependent.” MCL 500.3107 excerpts.

MCL 552.625a governs accrual of past due support and enforcement and scope of liens generally. Subsection (6) provides a list of items not subject to liens by creditors. Two of these items, in particular, are worth noting:

“(f) Money to be paid under an insurance policy for the repair or replacement of real or tangible personal property.

(g) Money to be paid for allowable expenses that are payable as benefits under section 3107(1)(a) and for expenses under section 3107(1)(c) of the insurance code of 1956, 1956 PA 218, MCL 500.3107. “ MCL 552.625a(6)(f),(g).

3107(a) benefits are medical benefits that include rehabilitation, attendant care, accommodations, housing, transportation, medical mileage, etc. These types of benefits may not have liens placed upon them by creditors, as provided for by MCL 552.625a(6)(g), above.

3107(c) benefits replacement services benefits that include cooking, cleaning, or other non- personal medical care. These types of benefits may not have liens placed upon them by creditors, as provided by MCL 552.625a(6)(g), above.

However, you will notice that MCL 552.625(a) makes no similar protection for 3107(b) benefits. 3107(b) benefits are wage loss benefits and the Friend of Court may place liens upon these benefits.

In answering the question of whether Friend of the Court liens can reach first party no-fault benefits, you must first define what type of first party no-fault benefits are in question. The Friend of Court cannot reach medical or replacement services, those benefits provided under 3107(a) and 3107(c). However, the Friend of Court can place liens upon wage loss benefits, those benefits provided under 3107(b).

NO AFFIRMATIVE DUTY TO CHECK WITH FRIEND OF THE COURT & LEGISLATIVE OUTLOOK

Regardless of which type of first party no-fault benefit you are talking about, there is no affirmative duty to check with the Friend of the Court to determine if there are any arrearages prior to settling with a claimant regarding any first party no-fault benefits. In our discussions with Friend of the Court collections workers, they report that there have been discussions in the State Legislature about changing the law to make all first party no-fault benefits subject to liens, so it is worth keeping an eye on the horizon for any possible changes to the law. We at GLM certainly will be watching and are committed to keeping you informed of any changes in this area of the law.