Opinion ID: 4656289
Heading Depth: 3
Heading Rank: 1

Heading: 2015 MBR Plan

Text: Central Valley asserts that, under the 2015 MBR plan, TBG and AMPS were fiduciaries because (1) TBG exercised control over plan assets when it made payments to providers; and (2) TBG and AMPS exercised control over plan assets when they expanded the claims subject to MBR review, thereby increasing their compensation. Central Valley’s assertions are not supported by the evidence in the record. TBG did not exercise control over plan assets when it made payments to providers because Central Valley retained possession and had dominion over all plan assets at all times, only granting TBG the authority to cut checks in the precise amount approved by Central Valley. In light of Central Valley’s ability to “freely reject” any payment recommendation it received from TBG, no fiduciary relationship existed between TBG and Central Valley. Id. at 1073–74 (service provider is not a fiduciary if a plan can freely reject its actions); see also IT Corp. v. Gen. Am. Life Ins. Co., 107 F.3d 1415, 1419 (9th Cir. 1997) (“If a fiduciary tells a bookkeeping service to send a check for $950 to Mercy Hospital, the bookkeeping service does not thereby become a fiduciary.”). -7- Similarly, TBG and AMPS did not exercise control over plan assets by making undisclosed “kickback” payments. The contracts between the parties disclosed the payments. AMPS was paid 30% of savings it achieved in administering the MBR plan under its contract with Central Valley. TBG’s contract with Central Valley permitted TBG to collect additional fees from firms involved in the MBR process like AMPS. These disclosed “kickback” payments did not create a fiduciary relationship. Central Valley’s second argument also fails because TBG and AMPS did not possess the requisite discretion over the amount of compensation that they received to become fiduciaries. While TBG and AMPS could increase the number of claims that AMPS reviewed, that only had the potential to increase their compensation. It is true that by reviewing more bills AMPS would be able to make more recommendations to Central Valley, and could thereby potentially trigger more “savings” for Central Valley (which determined AMPS’s compensation), but Central Valley still had to approve AMPS’s recommendations. Thus, Central Valley ultimately decided what portion of each medical bill was paid. Because Central Valley made the final payment decisions, AMPS and TBG did not have discretion over their compensation and were not fiduciaries. See Rozo, 949 F.3d at 1073–74.2