United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 07-3317
                                  ___________

George Schoedinger; Signature Health *
Services, Inc.,                         *
                                        *
      Plaintiffs - Appellants,          * Appeal from the United States
                                        * District Court for the
      v.                                * Eastern District of Missouri.
                                        *
United Healthcare of the Midwest, Inc., *
                                        *
      Defendant - Appellee.             *
                                 ___________

                            Submitted: June 11, 2008
                               Filed: March 5, 2009
                                ___________

Before LOKEN, Chief Judge, COLLOTON, Circuit Judge, and PIERSOL,* District
      Judge.
                              ___________

LOKEN, Chief Judge.

      Orthopedic surgeon George Schoedinger and his employer, Signature Health
Services, Inc. (collectively, “Plaintiffs”), commenced this action for damages and
equitable relief, alleging that United Healthcare of the Midwest, Inc. (“United”),
wrongfully denied or reduced 295 health care insurance claims. United removed the
action because 289 of those claims were submitted under employee welfare benefit


      *
        The HONORABLE LAWRENCE L. PIERSOL, United States District Judge
for the District of South Dakota, sitting by designation.
plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001 et seq. Plaintiffs then filed an amended complaint asserting, as
relevant here, state law claims for breach of contract and for violations of the Missouri
Prompt Payment Act, Mo. Rev. Stat. § 376.383 (“MPPA”), and federal claims under
ERISA and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
U.S.C. § 1964(c).

       Prior to trial, United paid the unpaid principal amount of most of the claims.
The evidence at the bench trial established that United’s computerized claims
processing system committed hundreds of errors that resulted in improper denial,
reduction, or delayed payment of claims for Dr. Schoedinger’s health care services.
The errors included continuing to apply in-network discounts after Dr. Schoedinger
terminated his provider agreement; inappropriate “grouping” or “bundling” of distinct
medical procedures; improper “downcoding” (basing payment on a less expensive
procedure); and requesting unnecessary information before processing claims. The
result, Signature witnesses testified, was that United was consistently $200,000 to
$600,000 delinquent in paying claims, and Signature incurred the expense of a claims
department to ferret out and correct repeated errors that United refused to correct.
After trial, the district court1 awarded Plaintiffs an additional $28,874.04 in principal
on the 289 ERISA claims, $4,768.62 in interest on the six non-ERISA claims, and
$284,261.47 in pre-judgment interest, attorneys’ fees, and costs. This award is not
challenged on appeal. The court also dismissed the RICO claim at the close of
Plaintiffs' case, and ruled at the close of all the evidence that United breached no
independent contract governing the ERISA claims, that ERISA preempts claims for
additional penalties under the MPPA, and that Plaintiffs are not entitled to broad
injunctive relief. Plaintiffs appeal these rulings. We affirm.




      1
       The HONORABLE STEPHEN N. LIMBAUGH, SR., United States District
Judge for the Eastern District of Missouri, now retired.

                                          -2-
                          I. The Breach of Contract Issue

        Dr. Schoedinger is one of more than fifty physicians employed by Signature,
one of the largest health care provider organizations in the St. Louis metropolitan area.
United is a nation-wide health care insurer and claims administrator. Each year,
Signature submits thousands of claims to United for treatment provided to patients
covered by a health care plan administered by United. Before a patient covered by a
United plan is treated by Dr. Schoedinger or another Signature physician, the patient
signs an assignment of plan benefits form that Signature later submits to United with
its claim for payment.

      United’s claim submission procedures are described on its website and in an
administrative guide distributed to providers. Like most plan administrators, United
maintains a network of participating providers who agree by written contract to
accept, as full payment for services provided to patients covered by a United plan, an
agreed amount that is typically lower than the billed charges. Dr. Schoedinger
terminated his “in-network” agreement with United effective April 15, 2003. The
claims at issue in this case were for patient treatment after that date, when Dr.
Schoedinger was an “out-of-network” provider. Most Signature physicians remained
in United's provider network. United’s claim procedures appear to be the same for
in-network and out-of-network providers.

       At trial, United conceded that the patients’ assignments of plan benefits
provided a contractual basis for the ERISA and non-ERISA claims at issue. But
Plaintiffs argued that the claims procedures published by United on its website, in the
administrative guide, and in insurance cards distributed to plan participants constituted
an offer of an independent contract in which United promised to properly and
promptly compensate Dr. Schoedinger every time he treated a United plan member.
Finding no Missouri law addressing the issue in this context, the district court
logically looked to Missouri cases determining whether an employee handbook

                                          -3-
created a contract between employer and employee. See Johnson v. McDonnell
Douglas Corp., 

, 662 (Mo. banc 1988). The court found that none of
United's documents “contain language which could be interpreted as a manifestation
of willingness to enter into a bargain.” Thus, there was no offer and no contract.

        After careful review of the record, we conclude that the court’s findings of no
offer and no contract are not clearly erroneous. See Kansas City Power & Light Co.
v. Burlington N. R.R., 

, 1003 (8th Cir. 1983) (standard of review). At
trial, Dr. Schoedinger testified that he had contracts with patients, not with United.
United’s website explains how to verify a patient’s eligibility and submit health care
claims, provides tips for faster claims processing, and describes how health care
coverage decisions are made. A provider using the website who wishes to review
United’s reimbursement policy is first brought to a webpage entitled “Reimbursement
Policy Agreement” which states that the policy “is intended to serve only as a general
reference resource,” and that United “may modify this reimbursement policy from
time to time.” The viewer must click, “I Agree,” to then review detailed policies
regarding matters such as “Co-Surgeon Services” and “Multiple Procedure
Reductions.” Though more detailed than the website, we agree with the district court
that United’s administrative guide is an instruction manual, not a contract offer. The
insurance cards United provides to plan beneficiaries expressly state, “This card does
not prove membership nor guarantee coverage.”

                         II. The MPPA Preemption Issue

       The Missouri Prompt Payment Act imposes statutory penalties on a health
carrier that “fails to pay, deny or suspend” a claim within forty days, and interest of
one percent per month if the health carrier “has not paid the claimant on or before the
forty-fifth day.” Mo. Rev. Stat. §§ 376.383.5-.6. The district court awarded Plaintiffs
interest for United's violations of these MPPA provisions in processing the six non-
ERISA claims. However, the court denied MPPA relief on the 289 ERISA claims,

                                         -4-
concluding that these MPPA remedies are preempted by ERISA. Plaintiffs appeal that
ruling, which we review de novo. Painter v. Golden Rule Ins. Co., 

, 438
(8th Cir. 1997), cert. denied, 

(1998).

       ERISA preempts state laws that conflict with its provisions or frustrate its
objectives. Boggs v. Boggs, 

, 841 (1997). The Supreme Court has
repeatedly held that “any state-law cause of action that duplicates, supplements, or
supplants the ERISA civil enforcement remedy conflicts with the clear congressional
intent to make the ERISA remedy exclusive and is therefore pre-empted.” Aetna
Health Inc. v. Davila, 

, 208-09, 214-16 (2004); see Pilot Life Ins. Co. v.
Dedeaux, 

, 52-54 (1987). In In re Life Ins. Co. of N. Am., 

,
1194-95 (8th Cir. 1988), we held that ERISA preempts claims for penalties under the
Missouri Vexatious Refusal to Pay Statute, Mo. Rev. Stat. § 375.420, explaining that
“Pilot Life could not have stated with any greater clarity that the remedies afforded
under ERISA are exclusive, and no state law purporting to supply additional remedies
will escape the preemptive effect of [29 U.S.C.] § 1144(a).” We have consistently
applied this principle. See Werdehausen v. Benicorp Ins. Co., 

, 669 (8th
Cir. 2007) (“any state law remedy is preempted by ERISA’s comprehensive remedial
scheme”) (emphasis omitted).

       Plaintiffs argue that a state law obligating an ERISA plan administrator to
promptly pay health care providers is not preempted because its impact on the plan is
“too remote.” Plaintiffs rely on the decision in Baylor Univ. Med. Ctr. v. Ark. Blue
Cross Blue Shield, 

, 511-12 (N.D. Tex. 2004), that the Texas
Prompt Pay Law was not completely preempted by ERISA. We are not persuaded.
Unlike the Texas statutes at issue in Baylor, the MPPA regulates health carrier
payments to “claimants,” who are broadly defined to include ERISA participants and
beneficiaries. Mo. Rev. Stat. § 376.383.1(1). Moreover, the state law claim in Baylor
was based on a provider agreement, whereas Dr. Schoedinger’s ERISA claims are
based on patients’ assignments of plan benefits. Thus, the impact of the MPPA on

                                         -5-
plan administration is not “remote.” Indeed, even if a provider asserts a contract right
independent of his right under the patient’s assignment of plan benefits, the impact of
additional state law remedies on ERISA plan administration may require preemption
of a state law claim based on that contract. Cf. In Home Health, Inc. v. Prudential Ins.
Co. of Am., 

, 606 (8th Cir. 1996); Ark. Blue Cross & Blue Shield v. St.
Mary’s Hosp., Inc., 

, 1348-49 (8th Cir. 1991). Finally, the Baylor
court’s analysis of complete preemption seems inconsistent with the Supreme Court’s
later decision in Davila, which reversed a Fifth Circuit ruling that another claim under
Texas law was not preempted.

       For these reasons, we affirm the district court’s ruling that ERISA preempts
Plaintiffs’ claims for MPPA remedies. We note that the district court’s award of
interest for wrongfully delayed ERISA benefit payments in this case was appropriate
under 29 U.S.C. § 1132(a)(3)(B). Parke v. First Reliance Standard Life Ins. Co., 

, 1009 (8th Cir. 2004).

                               III. The RICO Claim

       RICO prohibits a person associated with an “enterprise” from conducting the
enterprise’s affairs “through a pattern of racketeering activity” and provides a private
right of action for treble damages to any person “injured in his business or property
by reason of a violation.” 18 U.S.C. §§ 1962(c), 1964(c). “Racketeering activity” is
defined in § 1961(1)(B) to include “any act which is indictable” under the federal
statute prohibiting mail fraud. A person is guilty of criminal mail fraud if he devises
a “scheme or artifice to defraud” and uses the mails “for the purpose of executing such
scheme or artifice.” 18 U.S.C. § 1341.

       An understanding of Plaintiffs’ RICO claim requires additional background
facts. The vast majority of the claims at issue (268 of 295) involved patients of Dr.
Schoedinger who were railroad employees or dependents covered under ERISA health

                                          -6-
plans self-funded by the railroad employers. United processed these claims under
separate contracts with the plans. The self-funded plans were liable for the benefits
United paid, and United’s compensation did not vary depending upon whether a claim
for provider services was paid in full, reduced, or denied. When United processed a
claim submitted by a provider that United considered an in-network provider --
whether correctly or incorrectly -- United as plan administrator acted unilaterally in
determining applicable discounts and other coverage issues. However, when United
processed a claim for services by an out-of-network provider, United’s contracts with
the railroad health care plans required that it submit the claim to Coalition America,
Inc. (“Coalition”).

        Coalition was a competitor of United that contracted with the plans to “rent”
additional provider networks and make those networks available to the plans, allowing
the plans to receive discounted rates for services by providers not in United’s network.
It is undisputed that United’s contracts with the plans required United to pay benefit
claims based on “re-pricing” information it received from Coalition, that the plans
paid Coalition a fee based on the savings obtained, and that Coalition otherwise
played no role in United’s actions as claims administrator.

       After processing a health care claim, United sent Signature a computer-
generated explanation of benefit form (“EOB”) along with any approved payment.
United’s errors in processing the 295 claims at issue were reflected in its initial EOBs
to Signature. United’s EOBs advised when United applied an out-of-network discount
based on information received from Coalition, identified the “rented” provider
network under which the discount was applied, and advised Signature to contact
Coalition to challenge the discount, a process fraught with delays and unsatisfactory
responses according to Signature’s trial witnesses. Plaintiffs’ RICO claim is premised
on the assertions that United “engaged in a scheme to avoid paying full amounts of
claims,” that United’s claims processing errors were intentional, and therefore that the
erroneous EOBs constituted repeated acts of indictable mail fraud.

                                          -7-
       At the close of Plaintiffs’ evidence, the district court granted United’s motion
for partial judgment dismissing this RICO claim. The district court ruled orally that
United’s motion for judgment was granted because Plaintiffs failed to provide
“sufficient factual evidence to support the RICO claim.” In a Memorandum and Order
filed some days after trial, the court adopted United’s argument that Plaintiffs lacked
standing to assert a RICO claim under Appletree Square I, LP v. W.R. Grace & Co.,

, 1286 (8th Cir. 1994), where we stated: “In order to establish injury to
business or property ‘by reason of’ a predicate act of mail or wire fraud, a plaintiff
must establish detrimental reliance on the alleged fraudulent acts.” While the case
was pending on appeal, the Supreme Court resolved a conflict in the circuits on this
issue, holding that “a plaintiff asserting a RICO claim predicated on mail fraud need
not show, either as an element of its claim or as a prerequisite to establishing
proximate causation, that it relied on the defendant’s alleged misrepresentations.”
Bridge v. Phoenix Bond & Indem. Co., 

, 2145 (2008). Therefore,
Plaintiffs argue, the dismissal of this claim must be reversed.

         Plaintiffs argue that we review the RICO claim dismissal under the standard
applicable to the grant of judgment as a matter of law, resolving all fact conflicts in
their favor and giving them the benefit of all reasonable inferences. This is incorrect.
The district court granted judgment on partial findings at the close of the Plaintiffs’
case in a bench trial, a procedure expressly authorized by Rule 52(c) of the Federal
Rules of Civil Procedure. “[A]n appellate court that reviews a judgment made on
partial findings may not set aside the findings of fact unless they are clearly erroneous,
i.e., a review of the evidence leaves the court with a firm belief that a mistake has been
made.” 9 Moore’s Federal Practice § 52.52[1] (2008). When Rule 52(c) was
amended in 2007 to delete a prior reference to judgment as a matter of law, the
Advisory Committee notes explained: “The standards that govern judgment as a
matter of law in a jury case have no bearing on a decision under Rule 52(c).”




                                           -8-
       Plaintiffs further argue on appeal that they are entitled to judgment on their
RICO claim and a new trial on damages. But that would not be the appropriate
remedy given our substantial doubt whether Plaintiffs’ proof at trial established other
elements of a RICO damage action the district court did not address. First, it is
undisputed that United as plan administrator acted unilaterally in determining
discounts such as grouping and downcoding and in incorrectly treating Dr.
Schoedinger as an in-network provider after April 15, 2003. Thus, as to these claims,
Plaintiffs apparently failed to prove what every circuit has required to establish a
RICO damage claim under 18 U.S.C. § 1962(c) -- that United, the RICO defendant,
was distinct from the alleged enterprise whose affairs were allegedly conducted
through a pattern of racketeering activity. See Fogie v. Thorn Americas, Inc., 

, 896-97 (8th Cir. 1999), and cases cited; United States v. Goldin Ind., Inc.,

, 1271 (11th Cir. 2000) (en banc).

       Second, the participation of the plans and Coalition in the processing of claims
where Dr. Schoedinger was treated as an out-of-network provider raises the possibility
of an “association-in-fact” enterprise distinct from United. But the plans, who
established independent contractual relations with United and Coalition and reaped
the financial benefit of any cost savings, are not accused of misconduct. Nor was
there evidence United and Coalition acted in unison. These facts suggest a finding
that Plaintiffs failed to prove that United had “some part in directing [the enterprise’s]
affair.” Dahlgren v. First Nat’l Bank of Holdrege, 

, 689 (8th Cir. 2008),
cert. denied, 

(U.S. Jan. 26, 2009), quoting Reves v. Ernst & Young,

, 179 (1993).

       We do not decide those issues because they were not the subject of the findings
of fact and conclusions of law that Rule 52(c) requires. Returning to the issue the
district court did decide, the court’s conclusion that lack of detrimental reliance was,
by itself, fatal to Plaintiffs’ RICO claim was overruled by the subsequent decision in
Bridge. But that conclusion was supported by findings that are not clearly erroneous:

                                           -9-
      In calculating payments made to Dr. Schoedinger, [United] incorrectly
      took discounts, and improperly reduced the amount owed to the doctor
      through “down coding” and “bundling.” [United’s] actions, although
      improper, were clearly explained on the EOB’s.

(Emphasis added.) While a plaintiff’s detrimental reliance is not an element of a
RICO claim predicated on mail fraud, “materiality of falsehood is an element of the
federal mail fraud, wire fraud, and bank fraud statutes.” Neder v. United States, 

, 25 (1999); see United States v. Goodman, 

, 237 (8th Cir. 1993)
(a scheme to defraud must be “reasonably calculated to deceive persons of ordinary
prudence and comprehension”). In this case, the only allegedly material falsehoods
claimed by Plaintiffs were the incorrect EOBs. But as the district court found, the
EOBs were what they purported to be -- truthful disclosures of discounts applied in
determining what covered benefits United was paying. Plaintiffs concede that the
EOBs clearly explained United’s justifications for the underpayments.

       It is not a scheme to defraud to adopt as a claims policy, “When in doubt, apply
the discount and truthfully disclose it.” It might be fraud to intentionally (or with
reckless disregard) apply and disclose deductions known to be improper when the
claims payer knows that a substantial number of claimants would not challenge the
deductions. But Plaintiffs’ proof at trial (to the extent made part of the record on
appeal) included no evidence of such intentional deceit, only repeated, unexplained
errors. And there is no proper basis to assume such intentional fraud, which if
uncovered would destroy United’s credibility as an ERISA plan fiduciary. Nor did
Plaintiffs present evidence that the railroad health plans devised a scheme to
intentionally underpay providers and enlisted United to implement that scheme with
inaccurate EOBs. For these reasons, although the district court’s legal conclusion
regarding reliance was undercut by Bridge, we affirm the dismissal of the RICO claim
because the trial record and the court’s findings “sufficiently inform[ this] court of the
basis for the trial court’s decision.” Scoggins v. Board of Educ., 

, 1477
(8th Cir. 1988) (quotation omitted).

                                          -10-
                                IV. Injunctive Relief

       Finally, Plaintiffs contend that the district court erred in declining to enter a
proposed twenty-one-paragraph injunction detailing the manner in which United must
process future claims. Plaintiffs contend they are entitled to injunctive relief under
state law, without disclosing whether the injunction they seek would be limited to
non-ERISA claims and, if not, why ERISA would not preempt such relief. Treating
this as an issue of state law, the district court denied the requested injunction because
(i) the court “is not in the insurance business, and will not impose such exacting
restrictions upon a corporate entity,” and (ii) Plaintiffs have an adequate remedy
“provided through ERISA and state law.” Reviewing this decision for abuse of
discretion under both ERISA and state law, we affirm. See Hinz v. Neuroscience,
Inc., 

, 986 (8th Cir. 2008), and State ex rel. Ellis v. Creech, 

, 374 (Mo. banc 1953) (standard of review). As the district court noted, ERISA
allows for the recovery of costs and attorneys fees in addition to unpaid plan benefits.

      The judgment of the district court is affirmed.
                     ______________________________




                                          -11-