Ince v. Aetna Health ManagementInce v. Aetna Health Management
Paula W. Theisen, Minneapolis, MN, argued, for Defendant-Appellee Aetna Health Management, Inc.
Donald M. Lewis, Minneapolis, MN, argued (Prasanta K. Reddy, on the brief), for Defendants-Appellees HealthPartners, Inc. and MedCenters Health Care, Inc.
Before BOWMAN, Chief Judge, LOKEN, Circuit Judge, and HAND,* District Judge.
LOKEN, Circuit Judge.
1 This dispute concerns the manner in which a health maintenance organization asserted subrogation claims for health benefits provided to members who later recovered from third-party tortfeasors. MedCenters Health Care, Inc., is a health maintenance organization (“HMO“) licensed by the Minnesota Commissioner of Health. See
2 MedCenters charges a fixed monthly fee for each employee enrolled in its Plan. MedCenters contracts with a network of health care providers to provide Plan benefits to enrolled members. At the time in question, MedCenters did not compensate its primary care physicians under the traditional fee-for-service method, but rather paid them fixed sums, called “capitated” payments, for each member who enrolled in their clinics. MedCenters paid other providers, such as physician specialists and hospitals, on a fee-for-service basis at negotiated, usually discounted rates. The MedCenters Plans include “Subrogation” provisions declaring that, when an enrolled member suffers injury at the hands of a third-party tortfeasor, the Plan has a primary right to recover “the reasonable value of services and benefits provided.” In asserting Plan rights under this provision, MedCenters and Aetna based Plan claims on the providers’ published fee-for-service charges, without disclosing whether MedCenters had paid the providers less because of capitated payments or substantially discounted fee-for-service rates. (According to MedCenters, it passes on to the medical providers any “extra” amounts recovered.)
4 1. Are Defendants ERISA Fiduciaries? To establish a breach of fiduciary duty, plaintiffs must prove that MedCenters and Aetna are ERISA fiduciaries. ERISA provides that each written plan should identify “one or more named fiduciaries.”
5 to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets ... or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.
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7 The district court concluded that Aetna was not an ERISA fiduciary when asserting, negotiating, and collecting subrogation claims on behalf of the MedCenters Plans because “Aetna‘s control remained at the level of administering subrogation claims and did not rise to control or discretion over the plan‘s terms or the procedures outlined in the plan.” Plaintiffs argue summary judgment was improper on this issue because there is evidence Aetna exercised discretionary authority over Plan assets—the subrogation liens—and over management of the Plans’ subrogation function.
8 In general, we agree with the district court. Plaintiffs stipulated that Aetna performed claim processing services for MedCenters, including “subrogation recovery services.” The processing of claims is the kind of “purely ministerial function” that does not give rise to fiduciary duties when performed by a third party on a contract basis. See
9 We are nonetheless wary of affirming summary judgment in favor of Aetna on this ground. ERISA imposes some fiduciary duties on those who implement a plan‘s claims procedures. See
11 There was no comparable failure to disclose in this case. The Plan‘s right to assert subrogation claims need not be disclosed in its summary plan description. See
12 Plaintiffs also argue that defendants breached ERISA fiduciary duties because Aetna‘s claims personnel occasionally sent subrogation notices describing the Plan‘s subrogation interest as being based upon “HMO paid” rather than the reasonable value of provider services. Plaintiffs contend this misrepresentation led them to believe MedCenters made cash expenditures of the listed amounts. This contention is fatally flawed. First, plaintiffs have no authority for the proposition that ERISA fiduciary duties apply to this kind of communication between the Plan and a beneficiary who has a contractual obligation to reimburse the Plan for benefits provided. The Department of Labor‘s regulation prescribing claims procedures imposes no such duty. See
13 3. Did Defendants Breach the Terms of the Plan? Plaintiffs further argue the district court erred in dismissing their claims that MedCenters and Aetna breached the Plans by asserting and collecting subrogation claims for more than the Plans in fact paid providers. As we have explained, defendants’ methodology in calculating subrogation claims was consistent with the Plans because the well-established meaning of the term “reasonable value” in the Plan subrogation provisions is the medical providers’ normal charges for the services provided. Of course, there is always a potential question whether the amount demanded in subrogation was in fact the reasonable value of the medical services actually provided. If plaintiffs raised that issue in the district court, which is not at all clear, they presented no evidence to counter defendants’ evidence that every subrogation claim was based upon provider billings at the providers’ normal fees for such services. In their reply brief, plaintiffs point to a Wall Street Journal article to argue that “in Minnesota, discounts are the norm.” But this falls far short of evidence that any of the subrogation claims in question were based upon illegitimate provider billings. See Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1328-29 (8th Cir.1995). A party opposing summary judgment who will bear the burden of proof at trial must come forward with evidence substantiating his position to avoid summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
15 The judgment of the district court is affirmed.