The opinion
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
KRIS CRUTCHER, et al., )
)
Plaintiffs, )
)
v. ) Case No. 6:15-CV-03484-MDH
)
MULTIPLAN, INC., et al., )
)
Defendants. )
ORDER
Before the Court are Defendants Multiplan, Inc. and Private Healthcare Systems, Inc.’s
Motions for Summary Judgment. (Docs. 294 and 370) and Plaintiffs Kris Crutcher and Tri-Lake
Diagnostic Imaging, LLC’s Motions for Summary Judgment. (Docs. 300 and 379). Plaintiffs have
sued Defendants for violations of the Racketeer Influenced and Corrupt Organization Act
(“RICO”), Unjust Enrichment, Civil Conspiracy, Common Law Fraud, and Breach of Contract.1
(Doc. 33). Plaintiffs, who provide diagnostic medical imaging services to patients, allege that
Defendants, who operate a preferred provider organization (“PPO”), engaged in a “Silent PPO”
scheme to deprive them of substantial revenues to which Plaintiffs were entitled. Defendants in
their Motions ask the Court to hold that (1) Plaintiffs cannot establish the essential elements of its
RICO claims; (2) Plaintiffs’ unjust enrichment claim fails as a matter of law and for lack of
evidence; (3) Plaintiffs’ civil conspiracy claim fails a matter of law; (4) Plaintiffs cannot establish
a claim of fraud; and (5) Plaintiffs’ breach of contract claim fails as a matter of law. Plaintiffs, in
their Motions for Summary Judgment, ask for judgment on their six claims. For the reasons
1 Plaintiffs have submitted that Count VI of its Amended Complaint, a claim for Accounting and
Disgorgement, is no longer necessary and is withdrawn. (Doc. 315 at 24, n. 47).
explained below, the Court will grant Defendants’ Motion as to Plaintiffs’ RICO claims, unjust
enrichment claim, civil conspiracy claim, and fraud claim, but deny it in part as to Plaintiffs’ breach
of contract claims. The Court will grant Plaintiffs’ Motion for Summary Judgment as to its breach
of contract claim in part but deny the balance of their motions.
Background
Plaintiff Tri-Lakes Diagnostic Imaging (“TLDI”), a company owned by Plaintiff Kris
Crutcher, provides diagnostic imaging services to patients in Branson, Missouri. Defendants
operate a PPO, which is an intermediary between health care providers and payors, including
health insurance companies, that pay providers on behalf of their clients. When an insured patient
uses TLDI’s services, it is the insurance company, not the patient, who pays TLDI, excluding any
co-payment or deductible borne by the patient. PPOs create relationships between payors, like
insurance companies, and providers whereby the payors steer patients to providers in the PPO
network. In exchange for the increase in business as a result of being in-network, the provider
agrees to charge the payors a discounted rate. In theory, providers benefit despite receiving lower
payments because they receive an increased volume of customers. Payors, meanwhile benefit from
being able to pay at a discounted rate. The role of the PPO operator is to create and maintain these
networks, determine which patients are in and out of network, and to notify payors of available
discounts they can apply to payments to in-network providers so that payors may pay the provider
the discounted rate.
In this case, Plaintiffs allege that no PPO agreement existed between them and Defendants.
Plaintiffs also allege that Defendants were involved in a silent PPO scheme. A silent PPO scheme
is an illicit payment scheme whereby the payor rents out their negotiated PPO discount to other
payors who are not entitled to that discount. As a result, providers are paid at discounted rates,
instead of their usual rates, by payors who are not party to the PPO agreement.2 Because the third-
party payors are not obligated to steer its customers to the provider but nonetheless pay the
discounted rate, the provider receives none of the benefits of the PPO agreement and bears all of
its costs. Plaintiffs allege they lost significant revenue as a result of Defendants’ scheme.
a. Corporate History
Medical Investments of Branson, LLC, was organized as an LLC in Missouri in 1999 with
a business address at 523 State Hwy. 248, Suite 300, Branson, Missouri 65616. That same year, it
registered the fictitious name “Branson Imaging, LLC.” On April 1, 2000, the company entered in
a Provider Agreement contract with a PPO, United Payors and United Providers (“UP&UP”).
Under that contract, the Provider Agreement would be renewed automatically every year unless
either party gave written notice of its intention to terminate the agreement at least ninety days prior
to the expiration of the current one-year term. The contract stated that UP&UP was contracting for
itself and for the benefit of any affiliates having common management and control with UP&UP,
including any subsequently-acquired affiliate. Later, UP&UP was acquired by BCE Emergis
2 A paradigmatic silent PPO scheme is described in Roche v. Travelers Prop. Cas. Ins. Co., 2008
WL 2875250 at *1 (S.D. Ill. 2008) as such:
“Essentially, a silent PPO occurs when a payor receives a PPO discount to which
he is not entitled. For example, suppose a patient with an indemnity insurance plan
goes to a provider who is part of a PPO. By definition, the patient with an indemnity
insurance plan is not steered towards a provider, but is free to choose any provider
he wishes. The patient typically pays a percentage of the total bill and his insurance
pays the rest. In a silent PPO, after the patient pays his share of the bill and the
provider submits the outstanding balance to the payor for payment, the payor
notices that the provider is a member of a PPO. The payor then proceeds to pay the
provider at the PPO discounted rate instead of the usual and customary rate. If the
payor and provider are both members of the PPO, this discount payment may
constitute a breach of the PPO contract. If the payor is not a member of the PPO,
but pays only the PPO rate, this discount payment may constitute fraud.”
Corp., which was in turn acquired by Multiplan in 2004. Multiplan also acquired Private
Healthcare Systems, Inc. (“PHCS”) in 2006.3
On October 2, 2000, Articles of Organization were filed creating Branson Imaging, LLC.
It was organized by the same person at the same business address as Medical Investments of
Branson. Its registered agent and managing partner was Robert Heriford. On April 2, 2001,
Medical Investments of Branson, LLC, cancelled the fictitious name of “Branson Imaging.”
Medical Investments of Branson did not file Articles of Termination until April 17, 2013.
On January 10, 2003, Articles of Incorporation were filed creating Tri-Lakes Diagnostic
Technologies, Inc. (“TLDT”). Its business address was identical to Branson Imaging’s address.
On February 8, 2003, Robert Heriford, in his capacity as Branson Imaging, LLC’s managing
partner and registered agent, wrote to Blue Cross Blue Shield:
Effective February 6, 2003, Branson Imaging, LLC is now operating under the new
name of Tri-Lakes Diagnostic Technologies, Inc. Everything remains the same as
before. Attached is a W-9 for your convenience.
Branson Imaging, LLC – Tax ID number of 43-1904174 is now Tri-Lake
Diagnostic Technologies, Inc. Tax ID number of 42-1570105.”
Please note this change.
Soon after, Multiplan changed the provider name and tax identification number (“TIN”) associated
with the Network Agreement to reflect Heriford’s requested changes. An employee of Multiplan
who manages Network Agreements, Nina Conway, testified at deposition that such a change would
not have been made absent a specific request from the provider. TLDT was administratively
dissolved on November 10, 2008.
3 Because PHCS is a wholly-owned subsidiary of Multiplan, the Court will, when convenient refer
to the defendants collectively as “Multiplan” in this Order.
On February 5, 2008, Articles of Organization were filed creating Tri-Lakes Diagnostic
Imaging (“TLDI”) with Kris Crutcher as the registered agent and sole organizer. Its business
address was identical to Branson Imaging’s address. On February 22, 2008, Crutcher wrote to
Multiplan that TDLI was a freestanding imaging facility that had a previous contract with
Multiplan through a radiologist who was no longer affiliated with the facility and that the facility’s
ownership and name had “changed slightly.”
On May 5, 2008, Crutcher sent a message to Multiplan, stating:
We have changed our name and EIN. The former name for our company was
Branson Imaging. The address remains the same as well as the services and imaging
capabilities we offer. Please make the following changes to update your system . . .
The billing address is the same as the business address above. We look forward to
continuing to provide imaging services for our clients. Thank you for your time and
attention.
On June 9, 2008, Crutcher sent a similar message to Multiplan, where she again asked to substitute
the new name and TIN (Tri-Lakes Diagnostic Imaging, LLC, 51-0667791) for the old name and
TIN (Branson Imaging, 43-1904174) in their directory. She also said that she “look[ed] forward
to continued patient service for your clients” and that the “address remains the same as well as the
services we provide.” Crutcher stated she wrote the letter after noticing that Multiplan’s PPO
directory listed Branson Imaging, not TLDI, as an in-network provider. Nina Conway stated that
she understood Crutcher’s correspondence to mean that she was assuming ownership of the
business at that address and meant to continue the Network Agreement that had been in effect
since April 1, 2000, on behalf of TLDI.
Conway testified at deposition that following the June 9, 2008 letter, Crutcher contacted
Multiplan on numerous occasions to complain that TLDI had not been substituted for Branson
Imaging in the PPO system and was not being treated as in-network. Conway also testified that
Crutcher appealed a number of claims because payors were not being given “in-network” discounts
by Multiplan after directing patients to TLDI. Multiplan updated its provider name and TIN as
requested by Crutcher.
Multiplan claims the Provider Agreement between UP&UP and Branson Imaging survived
these acquisitions and transfers, eventually becoming an agreement between Multiplan and TLDI.
Plaintiffs admit that Multiplan acted as if a Provider Agreement existed between itself and TLDI
but deny that any agreement actually existed. There is no evidence that Medical Investments of
Branson, Branson Imaging, TLDT, or TLDI ever provided written notice of its intent to terminate
the Provider Agreement before 2014.
B. Post-2008 Communications between Multiplan/PHCS and TLDI
Plaintiffs claim that although they were aware of the Provider Agreement from the
beginning because her payments from insurance companies were routinely subject to Multiplan
discount, they never thought TLDI was actually part of the PPO network. On June 19, 2008,
Crutcher faxed a letter to Multiplan stating that she was interested in joining Multiplan’s network.
She says Multiplan never responded. Because of its nonresponse, Crutcher on July 20 and 22,
2009, requested from Multiplan a copy of the Provider Agreement it had on file for TLDI.
Multiplan responded two days later that it was having trouble locating the agreement, but that
Multiplan had become part of the Provider Agreement entered into by UP&UP by virtue of its
integration with BCE in 2004 and BCE’s subsequent acquisition by Multiplan. Multiplan also
stated that PHCS had been added to the agreement by virtue of its acquisition by Multiplan in
2006. On July 29, 2009, Multiplan located the Provider Agreement and sent it to Crutcher.
Five years later, beginning in 2014 and extending into 2015, Plaintiffs, in response to
receiving Explanation of Benefits (“EOBs”) from payors that showed Multiplan discounts being
applied to their invoices, sent multiple letters to payors and Multiplan disputing the notion it had
a contract with Multiplan, protesting the discounts, and requesting they stop being applied. Neither
Multiplan nor the payors responded to these letters, and the discounts continued unabated. In
February 2015, Crutcher sent a more formal letter to Multiplan requesting a copy of the current
fee schedule Multiplan had been applying to TLDI payments and asking that a new provider
agreement be created between the parties. On August 13, 2015, Crutcher again sent a letter to
Multiplan claiming there was no contractual agreement between TLDI and Multiplan, asking for
a full accounting of and reimbursement for discounts given to TLDI customers and directing
Multiplan to cease any future discounting for customers using the Multiplan network.
In response, Multiplan sent a letter to TLDI on September 14, 2015, explaining that because
of Crutcher’s June 9, 2008 letter, it had substituted TLDI for Branson Imaging, LLC, in the
Provider Agreement. It noted that because it had not received written notice of its intention to
terminate, as referenced in the Provider Agreement, it had continued to include TLDI in its network
and apply discounts. Not long after, Multiplan informed Plaintiffs it was unenrolling TLDI from
its network, effective September 8, 2015. On November 6, 2015, Plaintiffs filed this action.
Plaintiffs allege that despite Multiplan’s representation in its September 14, 2015 letter, it
continued to apply discounts to TLDI customers using the Multiplan network until May 18, 2016.
C. Provider Agreement
There are two types of contracts that, in combination, create Multiplan’s PPO network. The
first type is comprised of the provider agreements entered into between Multiplan and medical
providers, such as TLDI. The second type includes the network agreements entered into between
Multiplan and payors, including in this instance entities like Coventry, Procura, and Cox
HealthPlans. Network agreements require payors to steer patients to in-network providers by
providing financial incentives, but also allow those payors to access the discount rate when paying
those providers. The provider agreements allow for medical providers to be listed in Multiplan’s
Provider Directory and to benefit from the increased volume of patients steered to their businesses,
but at the cost of only being compensated at the discounted rate. Plaintiffs allege that Multiplan
allowed payors who did not have network agreements with Multiplan to apply its discount rate
when TLDI sent them bills without providing steerage, depriving TLDI both the opportunity to
serve more patients or bill its full rate. Multiplan claims every payor given access to the discount
rate was a part of its network and entitled to access the discount rate.
Branson Imaging, Inc. entered into a Provider Agreement with UP&UP whereby it agreed
to participate in UP&UP’s PPO Network. Under the Provider Agreement, Branson Imaging agreed
to offer discounted rates to payors in Multiplan’s network. A “payor” is defined as
any self-insured employer, provider organization, health maintenance organization,
financial institutions and associations, such as VISA and MASTERCARD,
insurance company, third party· administrator, or any other entity and/or the clients
of any of these entities which is responsible under Health Care Plan Benefits,
liability claims, or Worker's Compensation benefits to pay Services for a Covered
Person and has an active Payor Agreement with UP&UP.
(emphasis added). A network agreement—referred to as a “Payor Agreement” in the above
text—is defined as “an agreement between Payor and UP&UP providing access to UP&UP’s
Provider Network for Covered Person. Further, in the Provider Agreement, UP&UP agreed “not
to offer discounted services to any Payor who sells or leases UP&UP’s list of contracted
Providers, either directly to other Payors or to a broker, who then sells the list to other Payors.”
Under the Provider Agreement, the settlement to TLDI for outpatient services for patients
referred to TLDI by UP&UP was set to be “75% of Charges for Services rendered”, equivalent
to a 25% discount. The contract provides “All amendments or modifications to this Agreement
shall be mutually agreed to in writing by Provider and UP&UP.”
D. Network Agreement and Rental of Network by Third Parties
Plaintiffs claim that Multiplan entered into several network agreements that allowed
downstream payors with no contractual linkage to Multiplan to apply the discount rate in violation
of the Provider Agreement. One of these network agreements was between Multiplan and
Coventry, Inc. For the purposes of providing background, the Court considers the network
agreement between Multiplan and Coventry to be substantively similar to its other network
agreements. TLDI was not a party to any network agreement.
Coventry had certain clients defined under the Network Agreement as “under contract with
Coventry. These included the state of Illinois, the City of Chicago, Texas Mutual Insurance, 7-
Eleven, Southwest Airlines, Sears, and Liberty Mutual. These entities, known as “downstream
entities” were authorized to access Multiplan’s discount through Coventry under the Network
Agreement between Coventry and Multiplan. Under § 4.1.8.5 of the Network Agreement,
Coventry and its clients were obligated to “employ channeling and other network steerage and
direction techniques that require and allow Participants to utilize Medical Providers for Health
Services.” This language obligated Coventry and similar downstream entities to steer its patients
toward TLDI. It should be noted that the Network Agreements entered into between Multiplan and
payors like Coventry did encourage and provide for steerage of patients to Plaintiffs, even when
those patients were being referred from downstream entities. While it not clear from the record
how much, if any, success these payors had in steering patients to TLDI, Multiplan did recognize
that TLDI expected to benefit from these agreements at the cost of being paid a discounted rate.
These downstream entities did not have active payor agreements with Multiplan or its
predecessors.
Standard of Review
Summary judgment is proper where, viewing the evidence in the light most favorable to
the non-moving party, there are no genuine issues of material fact and the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(a); Reich v. ConAgra, Inc., 987 F.2d 1357, 1359
(8th Cir. 1993). “Where there is no dispute of material fact and reasonable fact finders could not
find in favor of the nonmoving party, summary judgment is appropriate.” Quinn v. St. Louis
County, 653 F.3d 745, 750 (8th Cir. 2011). Initially, the moving party bears the burden of
demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). If the movant meets the initial step, the burden shifts to the nonmoving party to
“set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). To satisfy this burden, the nonmoving party must “do more than
simply show there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
A question of material fact is not required to be resolved conclusively in favor of the party
asserting its existence. Rather, all that is required is sufficient evidence supporting the factual
dispute that would require a jury to resolve the differing versions of truth at trial. Anderson v.
Liberty Lobby, Inc., 477 U.S. at 248-249. Further, determinations of credibility and the weight to
give evidence are the functions of the jury, not the judge. Wierman v. Casey’s General Stores, et
al., 638 F.3d 984, 993 (8th Cir. 2011).
Discussion
A. Existence of Provider Agreement between TLDI and Multiplan
Multiplan asserts there is no genuine issue of material fact as to whether TLDI and
Multiplan had a valid Provider Agreement. The corporate history of TLDI and Multiplan is
complex, but for the purposes of this discussion it is enough to say that in April 2000, Medical
Investments of Branson d/b/a Branson Imaging entered into a provider agreement with UP&UP.
Through a series of acquisitions and mergers, UP&UP in 2006 became part of the Multiplan/PHCS
network. The Provider Agreement by its own terms survived these acquisitions. At each step, the
new PPO was simply substituted for the old PPO in the contract.
On the provider side of the original contract was Medical Investments of Branson d/b/a
Branson Imaging. At some point, Branson Imaging, LLC, was substituted for Medical Investments
of Branson d/b/a Branson Imaging in the provider agreement. Soon after, Articles of Incorporation
were filed creating Tri-Lake Diagnostic Technologies, Inc. In January 2003, and at the request of
Branson Imaging, TLDT was substituted for Branson Imaging as the provider in the Provider
Agreement. Five years later, in February 2008, Crutcher filed Articles of Organization for Tri-
Lake Diagnostic Imaging, LLC. Later that month, and again in May 2008, Crutcher sent
correspondence to Multiplan asking to substitute TLDI for Branson Imaging as the provider in the
Provider Agreement. Multiplan granted Crutcher’s request, substituting TLDI for Branson
Imaging in the Provider Agreement and listing TLDI in its PPO network. Five years later, Plaintiffs
began to dispute the discounts being applied under the Provider Agreement.
The first question before the Court is whether Crutcher’s letters to Multiplan accomplished
the goal of substituting TLDI for Branson Imaging as the provider in the Provider Agreement.
TLDI argues that because there was never any meeting of the minds between Plaintiffs and
Defendants, there was no valid contractual relationship. In Missouri, “mutuality of agreement” is
an essential element in a contract. Bldg. Erection Serv. Co. v. Plastic Sales & Mfg. Co., Inc., 163
S.W.3d 472, 477 (Mo. Ct. App. 2005). This requires a “meeting of the minds” of the contracting
parties regarding the same thing, at the same time. Walker v. Rogers, 182 S.W.3d 761, 768-69
(Mo. Ct. App. 2006). The Court will determine whether there was a meeting of the minds by
looking to the intention of the parties as manifested in their words and acts. J.H. Brown, 331
S.W.3d 692, 702 (Mo. Ct. App. 2011).
After careful review of the evidence, the Court finds that there was a mutuality of
agreement between TLDI and Multiplan. The Court’s finding is informed by the letters Crutcher
sent to Multiplan in May and June asking for TLDI to be substituted for Branson Imaging in its
provider directory. These letters clearly evince Crutcher’s desire to keep her diagnostic imaging
business in the Provider Agreement. Although Multiplan did not respond affirmatively to
Crutcher’s correspondence, it did make the desired change in its system as reflected in its provider
directory. This act clearly evinces acceptance of Plaintiffs’ offer to be substituted for Branson
Imaging, subject to the identical terms and conditions of the contract. At that point, a meeting of
the minds occurred, and a contract between TLDI and Multiplan came into effect.
TLDI draws attention to the fact that it apparently had no copy of the Provider Agreement
when it asked Multiplan to substitute itself for Branson Imaging. Under Missouri law, a meeting
of the minds requires that “the nature and extent of the contract’s essential terms must be certain
or capable of being certain.” Smith v. Hammons, 63 S.W.3d 320, 325 (Mo. Ct. App. 2002) (internal
quotations omitted). TLDI argues that because Plaintiffs did not have a copy of the Provider
Agreement until after Multiplan had added it to its network, no meeting of the minds could have
occurred. This argument is unavailing. First, although Crutcher did not have a copy of the Provider
Agreement when she requested TLDI be substituted for Branson Imaging, she was certainly aware
of the essential terms inherent in any PPO agreement because of her experience with TLDT and
Branson Imaging, who were members of the same PPO network. If she were not aware of the
nature of the agreement, she would presumably not have asked to be party to it. Second, even if
the essential terms of the contract were unknown to her, the holding of Smith v. Hammons infra
does not by its plain language require them to be known. Rather, it requires them to be “certain or
capable of being certain.” Id. In this case, the terms were certain in the sense that they were
embodied in the Provider Agreement, and capable of being certain in the sense that Plaintiffs could
have procured a copy of the Provider Agreement at her convenience. In July 2009, Plaintiffs did
in fact ask for and receive a copy of the Provider Agreement, after which they were certainly
capable of ascertaining its terms.
The Court’s finding is also informed by each parties’ conduct post-contract formation. If
Crutcher’s own words did not evince an intent to join the contract before its formation, her actions
afterward certainly did. After receiving a copy of the Provider Agreement in July 2009, Crutcher
did not attempt to remove TLDI from the Agreement. It was not until 2014 that Crutcher sent a
letter to Multiplan claiming there was no contract between TLDI and Multiplan. In light of the fact
that both parties proceeded as if there were a provider agreement since 2008, and that Plaintiffs
had a copy of the contract since 2009, the Court finds Plaintiffs’ claim on this point unpersuasive.
Ultimately, it is simply not plausible that in 2014 Plaintiffs actually believed that there was no
contractual arrangement between TLDI and Multiplan, considering Crutcher specifically requested
that TLDI be substituted for Branson Imaging in the Provider Agreement after receiving the
Agreement, and furthermore acted for more than 6 years as if an Agreement existed. Because of
the lack of a genuine issue of material fact on this point, the Court finds as a matter of law that a
contract existed between TLDI and Multiplan. As a matter of equity, Plaintiffs accepted steerage
under the contract and should not now be permitted to claim a right to recover for the discount
which entitled them to that steerage.
B. RICO Claims
Count I and Count II state claims under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) pursuant to 18 U.S.C. § § 1962(c) and (d). Count I states a RICO
violation under §1962(c) and Count II states a conspiracy to commit a RICO violation under
§1962(d). Because the claims contain similar elements with a single exception, the Court will
discuss them together.
Section 1962(c) makes it “unlawful for any . . . enterprise . . . to conduct or participate,
directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering
activity or collection of unlawful debt.” To prevail in a RICO claim, Crutcher must establish that
Multiplan engaged in conduct of an enterprise through a pattern of racketeering activity. Crest
Const. II v. Doe, 660 F.3d 346, 356 (8th Cir. 2011). The gravamen of Crutcher’s claim is that
Multiplan repeatedly violated federal wire and mail fraud statutes by sending hundreds of
wrongfully-discounted payments to TLDI between 2008 and 2016 and that this activity constituted
a pattern of racketeering activity of the type that supports a RICO claim.
A RICO claim must be premised on the existence of certain predicate criminal acts. Lange
v. Hocker, 940 F.2d 359, 362 (8th Cir. 1991). In this case, Crutcher asserts Multiplan committed
wire fraud under 18 U.S.C. § 1343 and mail fraud under 18 U.S.C. § 1341. The elements of these
crimes are as follows: (1) a plan to scheme or defraud; (2) intent to defraud; (3) reasonable
foreseeability that mail [or wire] will be used in furtherance of the scheme; and (4) actual use of
the mail (or wires) to further the fraudulent scheme. United States v. Frank, 354 F.3d 910, 916-
918 (8th Cir. 2004) (citing United States v. Bearden, 265 F.3d 732, 736 (8th Cir. 2001).
Additionally, in the RICO context, the plaintiff must allege the time, place, and content of all false
representations—it cannot rest on vague and conclusory allegations of fraud or misrepresentation.
Lange, 940 F.2d at 362 (internal citations omitted).
Turning to the pleadings, Plaintiffs allege at several points instances where Multiplan made
material omissions and misrepresentations. In paragraph 74 of their Complaint, Plaintiffs state
“For example, MULTIPLAN and PHCS illegally applied unauthorized discounts to, and/or
repriced, medical claims submitted by CRUTCHER/TRI-LAKES to insurance payers.
MULTIPLAN and PHCS also represented in correspondence that there was a valid contractual
agreement between MULTIPLAN/PHCS and CRUTCHER/TRI-LAKES which included
discounts for medical claims submitted by CRUTCHER/TRI-LAKES despite the fact there was
no validly executed contract agreement between MULTIPLAN/PHCS and CRUTCHER/TRI-
LAKES.”
Plaintiffs allege another instance of fraud in paragraph 76 of their Complaint, where she
states that Multiplan made material misrepresentations regarding its downstream entities such as
Coventry and CoxHealth on the EOB forms sent to Plaintiffs, which contained unauthorized
discounts for payors that they had no right to apply.
Finally, Plaintiffs in paragraph 77 of their Complaint allegee that Multiplan committed
fraud (1) when it sent improperly-discounted EOBs to Plaintiffs in connection to medical claims;
(2) when it sent notices to third-party payors representing it was authorized to sell discounts for
claims sent to TLDI; (3) when it sent letters to Plaintiffs regarding their status in the PPO network;
and (4) when it sent payments to payors.
After careful review of the record, the Court finds there is no genuine issue of material fact
as to whether there exist predicate acts capable of supporting a RICO claim. Plaintiffs’ claims of
fraud break down into two discrete accusations. First, Plaintiffs allege that Multiplan lied to
Crutcher about the existence of a PPO contract with TLDI so that it could improperly discount
payments made to TLDI. For the reasons explained above, the Court has already found that there
was a valid contract between TLDI and Multiplan. For this reason, these representations of the
existence of a contract cannot be considered fraud.
The second accusation is that Multiplan lied to Plaintiffs and payors about the availability
of contractual discounts to the downstream payors under the Network Agreement, again so that it
could improperly discount payments made to TLDI. For the reasons explained below, the Court
agrees with Plaintiffs that Multiplan violated the contract terms by allowing payors without payor
agreements to access the discount. However, a breach of a contract does not, in and of itself,
constitute evidence of fraud. A fraud claim requires a showing of both a plan and an intent to
defraud. Lally, 863 F.2d at 613. The evidence pointed to by Plaintiffs in support of their RICO
claim presents a compelling argument that Multiplan, at various points, breached its contract with
TLDI. However, what Plaintiffs cannot point to is evidence of intentional wrongdoing necessary
to conclude that these breaches were the result of a scheme or plan to defraud, as opposed to
carelessness or a simple misunderstanding of the contract terms. In this case, although Multiplan
breached the contract, the Court finds no evidence this breach was intentional or the result of a
scheme or plan to defraud TLDI.
In the Court’s view, the evidence does not show malice on the part of Multiplan but instead
carelessness in both its treatment of TLDI and its understanding of the Network Agreement, likely
a result of the fact that the relationship between the two entities was created almost accidentally,
in the aftermath of multiple mergers and acquisitions. Furthermore, to the extent the material
misrepresentations relied on by TLDI are contained in the EOBs, the Court notes these EOBs were
created by the payors, not Multiplan, and as such cannot be considered misrepresentations made
by Multiplan itself. Because the Court finds no genuine issue of material fact as to whether
Plaintiffs can satisfy that intentionality element of mail and wire fraud, it finds that no predicate
acts exist that can support a RICO claim under § 1962(c) or a RICO conspiracy claim under §
1962(d). As such, the Court will grant Multiplan’s Motion for Summary Judgment dismissing
Counts I and II and deny Plaintiffs’ Motion for Summary Judgment on these counts.
The Court separately notes that a RICO action requires the existence of an “enterprise,”
defined as “any individual, partnership, corporation, association, or other legal entity, and any
union or group of individuals associated in fact although not a legal entity.” Craig v. Outdoor
Advertising, Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1026 (8th Cir. 2008); 18 U.S.C.
§ 1961(4). An association-in-fact enterprise must have (1) a common or shared purpose; (2) some
continuity of structure and personnel; and (3) an ascertainable structure distinct from that inherent
in a pattern of racketeering. McDonough v. Nat'l Home Ins. Co., 108 F.3d 174, 177 (8th Cir. 1997).
In this case, Plaintiffs claim there was an association-in-fact entity composed of Multiplan,
PHCS, and the payors and insurance brokers who applied untheorized discounts to their TLDI
invoices. They describe these entities as sharing a common purpose of arranging for the
underpayment of TLDI bills, that they share a continuity of structure and personnel embedded by
their contractual and business relationship, and that this structure is distinct from that inherent in
a pattern of racketeering because it would exist independently of its scheme to defraud TLDI.
On its own review of the evidence, the Court finds no genuine issue of material fact as to
whether there is a common purpose or continuity of structure or personnel. The Court is not aware
of any case law indicating that the mere existence of a business relationship is enough to create a
“continuity and structure of personnel” between Multiplan and the third-party payors and
insurance brokers necessary to support this element of a RICO claim. Furthermore, as the Court
has already noted, there is no evidence that the payors and insurance brokers intentionally sought
to deny TLDI the compensation it was entitled to via the application of unauthorized discounts.
As such, it cannot be maintained that these third-party payors shared a common purpose with
Multiplan. The Court finds there was no “enterprise” sufficient to support Plaintiffs’ RICO claim
and on this basis grants Defendant’s Motion for Summary Judgment on Counts I and II.
III. Unjust Enrichment
Plaintiffs state an unjust enrichment claim against Multiplan. In Missouri, unjust
enrichment has three elements: (1) a benefit conferred by a plaintiff on a defendant; (2) the
defendant's appreciation of the fact of the benefit; and (3) the acceptance and retention of the
benefit by the defendant under circumstances in which retention without payment would be
inequitable. Hertz Corp. v. RAKS Hospitality, Inc., 196 S.W.3d 536, 543 (Mo. Ct. App. 2006).
Plaintiffs claim that Multiplan benefitted from its silent PPO scheme by receiving kickbacks from
payors and insurance brokers in exchange for allowing them access to the discount rate, that
Multiplan knew of and appreciated these benefits, some percentage of which were in fact owed to
TLDI, and that it would be inequitable to retain these benefits, which came at the expense of TLDI
and Crutcher.
It is well-settled in Missouri that “If the plaintiff has entered into an express contract for
the very subject matter for which he seeks recovery, unjust enrichment does not apply, for the
plaintiff’s rights are limited to the express terms of the contract.” Howard v. Turnbull, 316 S.W.3d
431, 436-37 (Mo. Ct. App. 2010) (quoting Farmers New World Life Ins. Co. v. Jolley, 747 S.W.2d
704, 707–08 (Mo. Ct. App.1988). It has been established that there was a contract between
Multiplan and TLDI. The Court finds the subject matter of this contract—specifically, TLDI’s
membership in Multiplan’s PPO network and the availability of the discount rate to payors also in
that network—is precisely the subject matter for which Plaintiffs now seek recovery in her unjust
enrichment claim. As such, the Court finds Plaintiffs’ unjust enrichment claim is barred as a matter
of law. For this reason, the Court will grant Defendant’s Motion for Summary Judgment on Count
III of Plaintiffs’ Complaint.
IV. Civil Conspiracy
Plaintiffs state a civil conspiracy claim against Multiplan. There are five elements to a civil
conspiracy claim in Missouri: (1) two or more persons; (2) an object to be accomplished; (3) a
meeting of minds on the object or course of action; (4) one or more unlawful acts; and, (5)
damages. Lyn–Flex West, Inc. v. Dieckhaus, 24 S.W.3d 693, 700 (Mo. App. E.D. 1999). Because
Multiplan is the parent company PHCS, they may not conspire with each other. Copperweld Corp.
v. Independence Tube Corp., 467 U.S. 752, 771 (1984). As such, any conspiracy would have to
exist between Multiplan and the third-party payors and insurance brokers. Crutcher claims that the
record establishes Multiplan and the third-party payors conspired to lease discount rates to
downstream fourth-party payors, thereby intentionally breaching the Provider Agreement contract,
and that this is sufficient to support a civil conspiracy claim.
The Court notes that although Multiplan might have breached the Provider Agreement
when it allowed third-party payors to lease the discount rates to downstream payors, the third-party
payors themselves were not party to the Provider Agreement. Rather, they were party to the
Network Agreement, which by it terms allowed them to provide the discount rates to downstream
payors. As the Court has already noted, there is no evidence in the record that the third-party payors
knew that Multiplan was breaching the terms of the Provider Agreement or was part of any scheme
to defraud TLDI by applying untheorized discounts. As such, it cannot be stated that there was a
true “meeting of minds” between Multiplan and any of the third-party payors. Because there is no
genuine issue of material fact as to whether any third-party payors were aware of Multiplan’s
breach of the Provider Agreement or that the discounts they requested from TLDI were
unauthorized, the Court will grant Defendant’s Motion for Summary Judgment as to Count IV of
Plaintiffs’ Complaint.
V. Fraud
Crutcher states a claim for fraudulent misrepresentation under Missouri law. There are nine
elements to such a claim: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's
knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it should be acted on
by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of the falsity
of the representation; (7) the hearer's reliance on the representation being true; (8) the hearer's right
to rely thereon; and (9) the hearer's consequent and proximately caused injury.” Hess v. Chase
Manhattan Bank, USA, N.A., 220 S.W.3d 758, 765 (Mo. 2007) (en banc) (internal citations
omitted). Plaintiffs, in their complaint, cites to three misrepresentations to support her fraud claim.
First, Plaintiff’s point to an alleged misrepresentation made in a letter from Multiplan in
July 2009. In a July 22, 2009 letter, Multiplan stated to Crutcher in response to a request for a copy
of the Provider Agreement that it was “unable to locate the . . . facility contract” and that it was
“probable [Crutcher would] need an updated contract for your ancillary facility.” Crutcher claims
that Multiplan in this letter represented its belief that there was no PPO agreement between
Multiplan and TLDI and that Multiplan did not intend to apply the discounts to in-network payors,
and that these representations were false. After review of the record, the Court finds there were no
misrepresentations contained in its July 22 letter. Multiplan’s representation that it could not locate
the Provider Agreement is not the same as representing there was no agreement. The Court is also
attentive to the fact that one week after sending its July 22 letter, Multiplan located the Provider
Agreement and promptly sent it to Crutcher. This is conclusive evidence that Multiplan believed
that TLDI was a member of its PPO network throughout their dealings and that Multiplan did not
falsely represent itself on July 22, 2009.
Second, Plaintiff’s argue that Multiplan failed to disclose to Plaintiffs that it intended to
and did lease PPO discounts to downstream payors. A failure to disclose information can constitute
a misrepresentation for purposes of a fraudulent misrepresentation claim. Id. (citations omitted).
In this case, Plaintiffs accuse Multiplan of intentionally failing to inform her that it would allow
downstream payors to use its discounts, and that it misidentified, misrepresented, or omitted data
on EOB forms sent to Crutcher in order to conceal the fact that downstream payors were taking
advantage of its discounts. The Court has carefully reviewed these EOBs and finds they were
created not by Multiplan but by third- or fourth-party payors, and were mailed directly from these
payors to TLDI. Because Multiplan did not create these documents or transit them to TLDI, the
statements in those documents cannot be considered representations made by Multiplan for
purpose of this fraud claim. There is no evidence Multiplan arranged for or controlled the
information downstream payors provided to Plaintiffs in their EOBs.
Finally, Plaintiffs argue that Multiplan fraudulently misrepresented itself in a letter sent to
her on September 14, 2015, wherein it stated it would remove TLDI from its PPO network and
cease applying discounts to invoices from payors, effective September 8. Plaintiffs point to 23
EOB forms sent to Plaintiffs by payors after September 8 and until May 2016 that contained an in-
network discount as evidence that Multiplan’s statement on September 14 was a knowing and
intentional misrepresentation. After review of the record, the Court agrees with Plaintiffs that
payors continued to apply in-network PPO discounts to its EOBs for more than eight months after
Multiplan’s letter. However, the Court also observes that these EOBs were created and sent to
TLDI by these payors, not by Multiplan itself. There is no evidence in the record that Multiplan
was aware that these payors were continuing to apply unauthorized discounts to their TLDI
invoices. As best the Court can discern from the record, the fault for these unauthorized discounts
appears to fall squarely on the payors, who did not promptly pay heed to the disenrollment of TLDI
from Multiplan’s PPO network. As such, the Court finds that Multiplan’s September 14, 2015
letter does not contain any knowing or intentional misrepresentations.
Because there is no genuine issue of material fact as to whether Multiplan knowingly and
intentionally misrepresented itself in its 2009 letter, its 2015 letter, or in the EOBs sent by other
organizations to TLDI, the Court will grant Multiplan’s Summary Judgment on Count V of
Plaintiffs’ Complaint.
VI. Accounting and Disgorgement
Plaintiffs state in their Suggestions in Opposition to Defendant’s Motion for Summary
Judgment that they are withdrawing their Accounting and Disgorgement claim. As such, the Court
will grant Multiplan’s Summary Judgment on Count VI of Plaintiffs’ Complaint.
VII. Breach of Contract
Plaintiffs assert in the alternative that if a contract existed, Multiplan breached the terms of
the Provider Agreement in three ways: (1) By amending the contract without TLDI’s written
consent to increase the discount rate; (2) by allowing payors who lacked a direct contractual
relationship with Multiplan to access to the discount rate; and (3) by failing to make best efforts to
steer payors toward TLDI. The Court will address these alleged breaches in turn.
In Missouri a breach of contract claim has four elements: (1) the existence of a valid
contract; (2) the rights and obligations of each party; (3) a breach; and (4) damages.” Kieffer v.
Icaza, 376 S.W.3d 653, 657 (Mo. 2012) (en banc). For purposes of this claim, both sides agree that
the Provider Agreement between TLDI and UP&UP (later acquired by Multiplan) is a valid
contract between the parties that sets out each sides’ rights and obligations.
A. Discount Rate Provision
The Provider Agreement establishes that “For Services furnished to each Outpatient, the
settlement will be: 75% for Services Rendered.” This indicates that payors that were part of the
Multiplan PPO network were entitled to invoice TLDI 75% of what they would normally invoice
for services rendered to outpatients, the equivalent of a 25% discount. Plaintiffs claim, and
Multiplan admits, that in many cases payors invoiced and received a discount greater than 25%.
Multiplan claims this was not a breach because the flat 25% discount rate contained in the
Provider Agreement was modified on two occasions. The first occasion was in 2007, when
Multiplan transitioned from a 75% “Percent of Change” method to a variable SSRIM fee schedule.
Multiplan notified TLDT of that change by letter on August 1, 2007. The letter contained a written
copy of the amendment and the new fee schedule. TLDT did not respond to the letter but continued
to operate and accept discounts under the new fee schedule. The second occasion was in November
2014, when Multiplan transitioned from the SSRIM fee schedule to the SRAD90 fee schedule. As
in 2007, Multiplan notified TLDI of the change in a letter that contained a written copy of the
amendment and the new fee schedule.
The Provider Agreement further states that “All amendments or modifications to this
Agreement shall be mutually agreed to in writing by Provider and UP&UP.” Plaintiffs claim that
Multiplan’s letters to TLDI did not effect an amendment of the contract because they were not
“mutually agreed to in writing” by both TLDI and Multiplan. It is undisputed that TLDI never
agreed to these amendments in writing. However, “even if a contract contains a clause saying that
it can only be modified by a writing, nothing ‘prevents the parties . . . from effecting modifications
by valid contractual formalities, even though there is no writing.’” Prime Cut KC, LLC v. Kansas
City Live Block 139 Retail, LLC, 2015 WL 12731918, at *7 (Mo. Ct. App. Apr. 3, 2015) (quoting
Doss v. EPIC Healthcare Mgmt. Co., 901 S.W.2d 216, 221 (Mo. Ct. App. 1995)).
Multiplan tries to escape the plain language requiring mutual agreement to any
amendments in writing in three ways. First, it claims that Plaintiffs suggest that any amendment to
the Provider Agreement must be signed in writing by both parties, which the text of the contract
does not require. But nowhere do Plaintiffs actually make this argument. Rather, Plaintiffs claim
that for an amendment to occur, TLDI was required to agree to the amendment in writing, with or
without a signature. This accords with the plain language of the contract.
Second, Multiplan claims that Plaintiffs assented to the SSRIM amendment in writing
when they asked TLDI be substituted for TLDT in its directory in 2008, after the fee schedule
changed from a flat fee to SSRIM. Again, the Court finds this argument unavailing. The plan
language of the contract indicates that both sides must give written consent to any proposed
amendment. Plaintiffs’ request that TLDI be substituted for TLDT in the contract documents
constitutes written consent that TLDI be substituted for TLDT in the contract documents—and no
more. By its plain language, the 2008 letter from Crutcher to Multiplan did not constitute written
consent to modify the fee schedule, as Multiplan claims.
Third, Multiplan claims Plaintiffs provided consent to the fee schedule amendments
through their conduct, which effected a modification of the part of the contract requiring changes
to be made in writing. Essentially, Multiplan argues that Plaintiffs waived two rights granted to
them under the contract: (1) the right to have any amendment to the contract be agreed to in writing
and (2) the right to receive 75% of the normal payment for business generated through the PPO
network. Multiplan argues Plaintiffs waived these rights by not responding to its unilateral
amendment letters and by accepting payments from payors under the SSRIM fee schedule between
2007 and 2014 and under the SRAD90 fee schedule from 2014 to 2015. In Missouri, waiver of a
contract provision is defined as the
“intentional relinquishment of a known right, on the question of which intention
of the party charged with waiver is controlling and, if not shown by express
declarations but implied by conduct, there must be a clear, unequivocal, and
decisive act of party showing such purpose, and so consistent with intention to
waive that no other reasonable explanation is possible.”
Carroll’s Warehouse Paint Stores, Inc. v. Rainbow Paint & Coatings, Inc., 824 S.W.2d at 151-52
(Mo. Ct. App. 1992) (internal citations omitted). In this case, the evidence of waiver is easy to
spot: Plaintiffs’ non-response to the unilateral amendments proposed by Multiplan and their
practice of accepting discounted payments from payors under the new fee schedules for many
years.
After careful review of the record, the Court finds Plaintiffs waived the amendment-in-
writing requirement between August 2007 and November 2014 when, in 2008, Crutcher asked to
substitute TLDT for Branson Imaging in the Multiplan network and continued to accept payments
from payors at the new discounted rate without objection after receiving notice of the fee schedule
modification. The only reasonable explanation of Plaintiffs’ practice of accepting payments under
the new fee schedule for almost six years is that they intended to waive agreement-in-writing
requirement with regard to this modification and operate as if the SSRIM fee schedule had replaced
the original. Crutcher’s request to substitute TLDT for Branson Imaging came after this new fee
schedule went into effect, strongly implying that Plaintiffs intended to abide by the SSRIM fee
schedule then in existence.
In making this finding, the Court is cognizant of the clause in the Provider Agreement that
states “Failure to exercise any right under this Agreement shall not act as a waiver of such right.”
In Robb v. Bond Purchase, LLC, a Missouri court faced with a similar waiver clause and a similar
argument that such language required the Court to disregard any conduct cited as evidence of
waiver. 580 S.W.3d 70, 80 (Mo. Ct. App. 2019) (“No delay or omissions by Lender to exercise
any right . . . under any other Loan Document shall impair such right . . . or be construed to be a
waiver[.]”. The court in that case rejected the proposition that such a clause could negate the
parties’ ability to modify their contract via later conduct or oral modification. Id. (“a provision that
an express condition of a promise or promises in the contract cannot be eliminated by waiver, or
by conduct constituting an estoppel, is wholly ineffective.”) (quoting Fritts v. Cloud Oak Flooring
Co., 478 S.W.2d 8, 14 (Mo. Ct. App. 1972)). On its own review of the relevant Missouri case law,
the Court finds strong support for the proposition that parties cannot rule out via waiver clause the
possibility that they might in the future modify their contract via waiver based on implied conduct.
See Fritts, 478 S.W.2d at 14; Luck “E” Strike Corp. v. First State Bank of Purdy, 75 S.W.3d 828,
830 (Mo. Ct. App. 2002); Doss v. EPIC Healthcare Management Co., 901 S.W.2d 216, 221 (Mo.
Ct. App. 1995). Because the contractual formalities of offer, acceptance, and consideration were
adhered to as to the SSRIM fee schedule, the Court will deny Plaintiffs’ Motion for Summary
Judgment on this issue. Plaintiff accepted steerage between 2008 and 2014 after asking to be part
of Multiplan’s network and, after having every opportunity to express concern or object, accepted
discounted payments not in the amount of 75% but in the amount dictated in the SSRIM fee
schedule.
Multiplan sent Plaintiffs a new fee schedule, the SRAD90 fee schedule, in November 2014.
Again, there is no evidence Plaintiffs agreed to this change in writing, as required by the contract.
The Court finds no support in the case law for the proposition that Plaintiffs’ decision to waive the
amendment-in-writing requirement with regard to the SSRIM fee schedule nullified that
requirement for all time regarding future fee schedule changes. As such, the Court must conduct a
separate waiver analysis for this separate proposed modification. Unlike the SSRIM fee schedule,
the SRAD90 fee schedule was met with almost contemporaneous opposition from Plaintiffs.
Specifically, Plaintiffs objected to the discounts applied under SRAD90 in the form of letters
written to Multiplan and payors disputing their payment amounts and even the very existence of a
Provider Agreement between them and Multiplan. These letters began on February 27, 2015, only
months after SRAD90 went into effect. On the face of these almost-immediate objections, the
Court finds no “clear, unequivocal, and decisive act” indicating a waiver of its right to agree in
writing to this proposed modification. As such, the Court finds Multiplan, by applying the
SRAD90 fee schedule without written consent from Plaintiffs, breached the terms of the Provider
Agreement.
For the reasons explained above, the Court finds that Multiplan’s proposed modification to
the fee schedule modified the contract in the case of its SSRIM fee schedule but did not modify
the contract in the case of its SRAD90 fee schedule. The Court does not consider there to be a
genuine issue of material fact as to whether Multiplan breached the Provider Agreement by
applying discounts under its SRAD90 fee schedule, which exceeded the discounts allowed under
the SSRIM fee schedule. On this basis, the Court will grant Plaintiffs’ Motion for Summary
Judgment as to Count VII of the Second Amended Complaint with regard to its SRAD90
modification. The Court also finds that Multiplan breached the Provider Agreement by continuing
to allow payors with active Network Agreements to make available to downstream entities the
SRAD90 discounts after receiving notice from Plaintiffs on February 27, 2015, that it objected to
that proposed modification to the Provider Agreement.
B. Anti-Leasing Provision
Plaintiffs claim Multiplan breached the terms of the Provider Agreement when it made the
discount rate available to payors who sold or leased Multiplan’s list of providers to other payors
or a broker. Plaintiff’s also claim Multiplan breached the terms of the Provider Agreement when
it made the discount rate available to payors who it did not have a direct contract with. The Court
notes the waiver analysis conducted supra does not apply to this section because Plaintiffs were
unaware that the downstream payors did not have active payor agreements with Multiplan.
The relevant provisions of the Provider Agreement state:
“UP&UP agrees not to offer discounted services to any Payor who sells or leases
UP&UP’s list of contracted Providers, either directly to other Payors or to a broker,
who then sells the list to other Payors.”
and
“Payor” means any self-insured employer, provider organization, health
maintenance organization, financial institutions and associations, such as VISA and
MASTERCARD, insurance company, third party· administrator, or any other entity
and/or the clients of any of these entities which is responsible under Health Care
Plan Benefits, liability claims, or Worker's Compensation benefits to pay Services
for a Covered Person and has an active Payor Agreement with UP&UP.”
and
“Payor Agreement” shall mean an agreement between payor and UP&UP providing
access to UP&UP’s Provider Network for Covered Person.”
Multiplan admits that it provided access to its discount rate to providers who did not have an active
Payor Agreement with UP&UP but claims this was allowed under the terms of the Provider
Agreement.
On its own review of the contract terms, the Court disagrees. The contract’s definition of
“payor” is not a model of clarity, but it is unambiguous when closely parsed. It sets out two
requirements of a payor: (1) that it be a self-insured employer, provider organization, health
maintenance organizations, financial institutions and associations . . . or any other entity and/or
clients of any of these entities; and (2) that it have “an active Payor Agreement with UP&UP.”
After careful analysis of both contracts, the Court observes that the Provider Agreement
and the Network Agreements are conflicted on who is allowed to access the discount rate. Under
the Provider Agreement, a “payor” is defined as any self-insured employer, provider organizations,
insurance company, etc. that has an active Payor Agreement with Multiplan. A payor agreement
means an agreement between that payor and Multiplan providing access to its network. Only
payors, as defined in the provider agreement, are entitled to the discount rate under the provider
agreement. The Provider Agreement also states that “UP&UP agrees not to offer discounted
services to any Payor who sells or leases UP&UP’s list of contracted Providers, either directly to
other Payors or to a broker, who then sells the list to other Payors.” The Network Agreement, on
the other hand, envisions the discount rate being made available to downstream entities who have
no contractual relationship with Multiplan. Multiplan, pursuant to its Network Agreement with
Coventry and other directly-contracted clients, allowed payors with no direct contractual linkage
to Multiplan to access the discounted rate when paying TLDI.
Multiplan argues that the downstream payors who accessed the discount rate did not need
an active Payor Agreement with Multiplan because they were clients of organizations like Procura
or Coventry, who did have active Network Agreements with Multiplan. As a matter of grammar,
this argument fails. The plain language of the contract provision mandates that a payor “[have] an
active Payor Agreement with [Multiplan].” This clause, which is a postpositive modifier attached
to a straightforward, parallel construction that contains nouns and verbs in a series, is presumed to
apply to the entire series. See Series-Qualifier Canon, BLACK’S LAW DICTIONARY 1574 (10th ed.
2014). The plain meaning of this clause of the Provider Agreement is that only entities with active
Network Agreements with Multiplan were allowed to access the discount rate. Because Multiplan
has admitted it provided the discount rate to payors who themselves provided access to the discount
rate to downstream entities who lacked Network Agreements with Multiplan, the Court does not
consider there to be a genuine issue of material fact as to whether Multiplan breached the anti-
leasing provisions of the Provider Agreement. For this reason, it will grant Plaintiffs’ Motion for
Summary Judgment as to Count VII of its Second Amended Complaint relating to discounts given
to downstream payors who lacked active payor agreements with Multiplan and its predecessors.
C. Payor Directory Provision
Plaintiffs argue Multiplan breached the Provider Agreement by failing to deliver via
physical mail a “Payor Directory, with periodic updates, which shall acknowledge Payor’s
participation in Network.” A Payor Directory is defined as “a listing of Payors having an active
Payor Agreement with UP&UP.” Multiplan concedes it never mailed such a directory to Plaintiffs,
but states that it did transmit to Plaintiffs such a directory via Multiplan’s website.
After careful review of the record, the Court finds that Multiplan did indeed make such a
directory available to Plaintiffs via its website. Furthermore, the contract does not require the
directory to be physically mailed to Plaintiffs. The directory need only be “delivered,” and the
Court finds that Multiplan, by making the directory available to Plaintiffs on an ongoing basis,
accomplished delivery of the directory within the terms of the Provider Agreement. Because there
is no genuine issue of material fact as to whether Multiplan satisfied this provision, the Court will
grant Multiplan’s Motion for Summary Judgment on this issue.
D. Steerage Provision
Finally, Plaintiffs claim Multiplan breached the Provider Agreement by failing to steer
payors toward TLDI. The relevant contract provisions states that “In consideration of Provider’s
execution of this Agreement, UP&UP agrees to make best efforts that it shall contractually require
each Payor which contracts with UP&UP to create financial incentives/benefits for Covered
Persons to utilize Provider[.]”
Plaintiffs claim Multiplan did not make best efforts to contractually require payors to steer
potential patients toward TLDI via financial incentives and benefits. Plaintiffs points to three
examples to support their argument that Multiplan did not properly steer patients to TLDI.
First, Plaintiff’s claim that none of TLDI’s workers’ compensation patients who accessed
Multiplan’s discounts were steered to TLDI by Multiplan because these workers were instead
referred to TLDI by a physician, as required under Missouri’s workers’ compensation laws.
Because these patients were steered to TLDI by their physician, and not by Multiplan, Plaintiffs
claim Multiplan breached the steerage provision. After careful review of the record, the Court does
not find this argument compelling. Under the Provider Agreement, Multiplan was only required to
use best efforts to steer patients with access to the discount rate. It was categorically not required
to steer every patient who had access to the discount rate. The fact that certain patients were
referred to TLDI by physicians in accordance with Missouri’s workers’ compensation scheme does
not indicate that Multiplan violated its steerage obligation.
Second, Plaintiff’s claim that certain patients referred to TLDI by Cox HealthPlans were
treated as in-network for purposes of applying discounts to the invoices sent by payors to TLDI
but out-of-network for purposes of billing those payor’s customers, resulting in a higher cost of
care for those patients. Plaintiffs claims this violated the steerage provision because Multiplan
failed to create financial benefits for these patients. After consideration of the entire record, the
Court finds this argument fails. Even accepting that Cox overbilled certain patients who used
TLDI’s services for purposes of this analysis, it is still the case that Multiplan was only ever
required to use best efforts to create financial benefits to steer patients to TLDI. To that end,
Multiplan’s Network Agreement with Cox HealthPlans required Cox to steer patients toward
TLDI. The Court notes that Multiplan steered hundreds of patients to TLDI over the years by
providing financial incentives to use its services. Cox’s failure to provide financial incentives to
patients in certain limited instances does not fall on the shoulders of Multiplan, especially in lieu
of evidence that Multiplan was aware of Cox’s alleged billing practices in select cases.
Finally, Plaintiffs claim that Multiplan posted the incorrect phone number for TLDI on its
website, instead posting the phone number for Raytel Imaging, thereby creating an “anti-steerage
effect.” The record shows that on September 5, 2014, Multiplan changed TLDI’s phone number
in its provider directory to a phone number belonging to Raytel Imaging. After careful review, the
Court does not consider this isolated fact enough to support the proposition that Multiplan
substantially breached its steerage obligations to TLDI. Based on the record, it appears far more
likely that this switch in numbers was a simple clerical error. The Court additionally observes both
that Plaintiffs did not alert Multiplan to this oddity and that it came near the end of their business
relationship, by which point Multiplan had already steered a significant number of customers to
TLDI.
None of the instances cited by Plaintiffs are sufficient for the Court to find that Multiplan
failed to use its best efforts to obtain steerage. For the reasons explained above, the Court does not
consider there to be a genuine issue of material fact as to whether Multiplan breached the steerage
provision of the Provider Agreement. For this reason, the Court will grant Multiplan’s Motion for
Summary Judgment on this issue.
VIII. Attorney’s Fees
The Provider Agreement states that “UP&UP shall indemnify and hold Provider harmless
from loss [or] damage…(including reasonable attorneys' [] fees) arising from actual or alleged
wrongful acts or omissions of UP&UP…in performing services contemplated under this
Agreement.” Plaintiffs assert that this language entitles her to collect attorney’s fees for this
litigation.
Usually, courts do not interpret indemnity clauses as permitting the recovery of attorney’s
fees in a suit between the two contracting parties for breach of contract. Nusbaum v. City of Kansas
City, 100 S.W.3d 101, 109 (Mo. 2003) (en banc); Monarch Fire Protection Dist. v. Freedom
Consulting & Auditing Servs., 644 F.3d 633, 639 (8th Cir. 2011). In order to do so, the indemnity
clause at issue must expressly refer to litigation between the parties as a reason to indemnify.
Monarch, 644 F.3d at 637 (internal citations removed). In this case, the indemnification language
refers only to “loss . . . arising from wrongful acts or omissions . . . in performing services
contemplated under this Agreement.” The Court finds no express reference in the indemnity clause
covering litigation between the parties. For this reason, the Court will not impose attorney’s fees
on Defendants.
CONCLUSION
For the reasons explained above, the Court hereby GRANTS-IN-PART and DENIES-IN-
PART Defendants’ Motions for Summary Judgment (Docs. 294 and 370) and GRANTS-IN-
PART and DENIES-IN-PART Plaintiffs’ Motions for Summary Judgment (Docs. 300 and 379).
Defendants’ Motions for Summary Judgment are granted as to Counts I, II, III, IV, V, and VI and
denied as to Count VII of Plaintiffs’ Second Amended Complaint. Plaintiffs’ Motions for
Summary Judgment are granted in part as described herein as to Count VII and otherwise denied.
Counts I, II, III, IIII, V, and VI of Plaintiffs’ Second Amended Complaint are hereby
DISMISSED. The Court hereby enters Judgment against Defendants in part as described herein
on Count VII.
The Court believes that additional submissions are necessary to determine a sum-certain
damage award on Plaintiffs’ Breach of Contract claim. Plaintiffs are ordered to notify the Court of
their precise requested damage award consistent with this Order together with supporting
documentation by August 21, 2020 with suggestions in support. Defendants shall have 14 days to
file suggestions in opposition to Plaintiffs’ submission. Plaintiffs shall have 7 days from
Defendants’ filing weeks to file reply suggestions. Plaintiffs and Defendants have leave to submit
these filings under seal.
If, after reviewing the submissions, the Court finds factual disputes requiring a jury
determination, a trial will be scheduled. The Parties in their submissions should address whether a
jury trial on damages is necessary or desired.
IT IS SO ORDERED.
DATED: August 4, 2020