SUPREME COURT OF THE UNITED
 No. 98-1949
 June 12, 2000
 LORI PEGRAM,
ET AL., PETITIONERS V. CYNTHIA HERDRICH
 SYLLABUS BY THE COURT
 OCTOBER TERM, 1999
 NOTE: Where it is feasible,
a syllabus (headnote) will be released, as is being
done in connection with this case, at the time the opinion is issued. The
syllabus constitutes no part of the opinion of the Court but has been prepared
by the Reporter of Decisions for the convenience of the reader. See United
States v. Detroit Timber & Lumber Co.,
200 U. S. 321,
 SUPREME COURT OF THE UNITED
et al. v. HERDRICH
 Certiorari To The United
States Court Of Appeals For The Seventh
 No. 98-1949.
 Argued February 23, 2000
 Decided June 12, 2000
Who owns the HMO?
Who provides the care?
What is the inherent financial conflict of interest?
 Petitioners (collectively
Carle) function as a health maintenance organization (HMO) owned by physicians
providing prepaid medical services to participants whose employers contract with
Carle for coverage.
What was the disease?
What was the alleged malpractice and the result?
was covered by Carle through her husband's employer, State Farm Insurance
Company. After petitioner Pegram, a Carle physician, required Herdrich
to wait eight days for an ultrasound of her inflamed abdomen, her appendix
ruptured, causing peritonitis.
Why did plaintiff say that the doc made her wait?
How was this a breach of the physician's common law fiduciary duty as
discussed in Cobbs?
She sued Carle in state court for, inter alia,
fraud. Carle responded that the Employee Retirement Income Security Act of 1974
(ERISA) preempted the fraud counts and removed the case to federal court. The
District Court granted Carle summary judgment on one fraud count, but granted Herdrich leave to amend the other. Her amended count
alleged that the provision of medical services under terms rewarding physician
owners for limiting medical care entailed an inherent or anticipatory breach of
an ERISA fiduciary duty, since the terms created an incentive to make decisions
in the physicians' self-interest, rather than the plan participants' exclusive
interests. The District Court granted Carle's motion to dismiss on the ground
that Carle was not acting as an ERISA fiduciary. The Seventh Circuit reversed
 Held: Because mixed
treatment and eligibility decisions by HMO physicians are not fiduciary
decisions under ERISA, Herdrich does not state an
ERISA claim. Pp. 5-25.
 (a) Whether Carle is a
fiduciary when acting through its physician owners depends on some background
of fact and law about HMO organizations, medical benefit plans, fiduciary
obligation, and the meaning of Herdrich's
allegations. The defining feature of an HMO is receipt of a fixed fee for each
patient enrolled under the terms of a contract to provide specified health care
if needed. Like other risk bearing organizations, HMOs take steps to control
costs. These measures are commonly complemented by specific financial incentives
to physicians, rewarding them for decreasing utilization of health-care
services, and penalizing them for excessive treatment. Hence, an HMO
physician's financial interest lies in providing less care, not more. Herdrich argues that Carle's incentive scheme of annually
paying physician owners the profit resulting from their own decisions rationing
care distinguishes its plan from HMOs generally, so that reviewing Carle's
decision under a fiduciary standard would not open the door to claims against
other HMOs. However, inducement to ration care is the very point of any HMO
scheme, and rationing necessarily raises some risks while reducing others.
Thus, any legal principle purporting to draw a line between good and bad HMOs
would embody a judgment about socially acceptable medical risk that would turn
on facts not readily accessible to courts and on social judgments not wisely
required of courts unless resort cannot be had to the legislature. Because
courts are not in a position to derive a sound legal principle to differentiate
an HMO like Carle from other HMOs, this Court assumes that the decisions listed
in Herdrich's count cannot be subject to a claim
under fiduciary standards unless all such decisions by all HMOs acting through
their physicians are judged by the same standards and subject to the same
claims. Pp. 5-9.
 (b) Under ERISA, a fiduciary
is someone acting in the capacity of manager, administrator, or financial
adviser to a "plan," and Herdrich's count
accordingly charged Carle with a breach of fiduciary duty in discharging its
obligations under State Farm's medical plan. The common understanding of
"plan" is a scheme decided upon in advance. Here the scheme comprises
a set of rules defining a beneficiary's rights and providing for their enforcement.
When employers contract with an HMO to provide benefits to employees subject to
ERISA, their agreement may, as here, provide elements of a plan by setting out
the rules under which beneficiaries will be entitled to care. ERISA's provision that fiduciaries shall discharge their
duties with respect to a plan "solely in the interest of the participants
and beneficiaries," 29 U. S. C. 1104(a)(1), is rooted in the common law of
trusts, but an ERISA fiduciary may also have financial interests adverse to beneficiaries.
Thus, in every case charging breach of ERISA fiduciary duty, the threshold
question is not whether the actions of some person providing services under the
plan adversely affected a beneficiary's interest, but whether that person was
performing a fiduciary function when taking the action subject to complaint.
 (c) Herdrich
claims that Carle became a fiduciary, acting through its physicians, when it
contracted with State Farm. It then breached its duty to act solely in the
beneficiaries' interest, making decisions affecting medical treatment while
influenced by a scheme under which the physician owners ultimately profited
from their own choices to minimize the medical services provided. Herdrich's count lists mixed eligibility and treatment
decisions: decisions relying on medical judgments in order to make plan
coverage determinations. Pp. 13-18.
 (d) Congress did not intend
an HMO to be treated as a fiduciary to the extent that it makes mixed
eligibility decisions acting through its physicians. Congress is unlikely to
have thought of such decisions as fiduciary. The common law trustee's most
defining concern is the payment of money in the beneficiary's interest, and
mixed eligibility decisions have only a limited resemblance to that concern.
Consideration of the consequences of Herdrich's
contrary view leave no doubt as to Congress's intent. Recovery against
for-profit HMOs for their mixed decisions would be warranted simply upon a
showing that the profit incentive to ration care would generally affect such
decisions, in derogation of the fiduciary standard to act in the patient's
interest without possibility of conflict. And since the provision for profits
is what makes a for-profit HMO a proprietary organization, Herdrich's
remedy -- return of profit to the plan for the participants' benefit -- would
be nothing less than elimination of the for-profit HMO. The Judiciary has no
warrant to precipitate the upheaval that would follow a refusal to dismiss Herdrich's claim. Congress, which as promoted the formation
of HMOs for 27 years, may choose to restrict its approval to certain preferred
forms, but the Judiciary would be acting contrary to congressional policy if it
were to entertain an ERISA fiduciary claim portending wholesale attacks on
existing HMOs solely because of their structure. The Seventh Circuit's attempt
to confine the fiduciary breach to cases where the sole purpose of delaying or
withholding treatment is to increase the physician's financial reward would
also lead to fatal difficulties. The HMO's defense would be that its physician
acted for good medical reasons. For all practical purposes, every claim would
boil down to a malpractice claim, and the fiduciary standard would be nothing
but the traditional medical malpractice standard. The only value to plan
participants of such an ERISA fiduciary action would be eligibility for
attorney's fees if they won. A physician would also be subject to suit in
federal court applying an ERISA standard of reasonable medical skill. This
would, in turn, seem to preempt a state malpractice claim, even though ERISA
does not preempt such claims absent a clear manifestation of congressional
purpose, New York State Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U. S.
645. Pp. 18-25.
 154 F. 3d 362, reversed.
J., delivered the opinion for a unanimous Court.
 Court Below: 154 F. 3d 362
 On Writ Of Certiorari To The
Court Of Appeals For The Seventh Circuit
 Justice Souter
delivered the opinion of the Court.
This case is about a second type of fiduciary duty, one that is created by
the Employee Retirement Income Security Act of 1974 (ERISA)
 The question in this case is
whether treatment decisions made by a health maintenance organization, acting
through its physician employees, are fiduciary acts within the meaning of the
Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 832, as
amended, 29 U. S. C. §§1001 et seq. (1994 ed. and Supp. III). We hold that they
 Petitioners, Carle Clinic
Association, P. C., Health Alliance Medical Plans, Inc., and Carle Health
Insurance Management Co., Inc. (collectively Carle) function as a health
maintenance organization (HMO) organized for profit. Its owners are physicians
providing prepaid medical services to participants whose employers contract
with Carle to provide such coverage. Respondent, Cynthia Herdrich,
was covered by Carle through her husband's employer, State Farm Insurance
 The events in question began
when a Carle physician, petitioner Lori Pegram,*fn1
examined Herdrich, who was experiencing pain in the
midline area of her groin. Six days later, Dr. Pegram
discovered a six by eight centimeter inflamed mass in Herdrich's
abdomen. Despite the noticeable inflammation, Dr. Pegram
did not order an ultrasound diagnostic procedure at a local hospital, but
decided that Herdrich would have to wait eight more
days for an ultrasound , to be performed at a facility staffed by Carle more
than 50 miles away. Before the eight days were over, Herdrich's
appendix ruptured, causing peritonitis. See 154 F. 3d 362, 365, n. 1 (CA7
What court did plaintiff file in?
Who were the two defendants?
Is there an overlap in the defendants?
What claims did she bring?
sued Pegram and Carle in state court for medical malpractice, and she later
added two counts charging state-law
How did the case get into federal court?
Carle and Pegram responded that ERISA preempted
the new counts, and removed the case to federal court,*fn2 where they then
sought summary judgment on the state-law fraud counts. The District Court
granted their motion as to the second fraud count but granted Herdrich leave to amend the one remaining.
The federal district court dismissed one of her complaints as preempted by
ERISA, allowing her individual medical malpractice claim to survive.
What did she claim in her amended petition and who was the amended
complaint aimed at?
(This is the key issue in the case)
This she did by alleging that
provision of medical services under the terms of the Carle HMO organization,
rewarding its physician owners for limiting medical care, entailed an inherent
or anticipatory breach of an ERISA fiduciary duty, since these terms created an
incentive to make decisions in the physicians' self-interest, rather than the
exclusive interests of plan participants.*fn3
sought relief under 29 U. S.
C. §1109(a), which provides that
Read the 29 USC §1109(a) quote carefully.
Three key definitions to figure out:
What is the plan?
Who is the beneficiary?
What are the plan assets?
What does plaintiff claim the answers are?
person who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries by this
subchapter shall be personally liable to make good to such plan any losses to
the plan resulting from each such breach, and to restore to such plan any
profits of such fiduciary which have been made through use of assets of the
plan by the fiduciary, and shall be subject to such other equitable or remedial
relief as the court may deem appropriate, including removal of such
What did the District court rule about the amended complaint against the
What was the reason for the holding?
 When Carle moved to dismiss
the ERISA count for failure to state a claim upon which relief could be
granted, the District Court granted the motion, accepting the Magistrate
Judge's determination that Carle was not "involved [in these events]
as" an ERISA fiduciary.
What happened at the trial of the malpractice complaint?
App. to Pet. for Cert. 63a. The original malpractice counts were then tried
to a jury, and Herdrich prevailed on both, receiving $35,000 in
compensation for her injury. 154 F. 3d, at 367.
What did plaintiff appeal and what did the Seventh Circuit rule?
She then appealed the dismissal of the ERISA claim to the Court of Appeals
for the Seventh Circuit, which reversed. The
court held that Carle was acting as a fiduciary when its physicians made the
challenged decisions and that Herdrich's allegations
were sufficient to state a claim:
Did the Seventh Circuit rule that all incentives violate the ERISA fiduciary
When did the Seventh Circuit rule that there could be a breach of the ERISA
 "Our decision does not
stand for the proposition that the existence of incentives automatically gives
rise to a breach of fiduciary duty. Rather, we hold that incentives can rise to the level of a breach where, as
pleaded here, the fiduciary trust between plan participants and plan
fiduciaries no longer exists (i.e., where physicians delay providing necessary
treatment to, or withhold administering proper care to, plan beneficiaries for
the sole purpose of increasing their bonuses)." Id.,
 We granted certiorari, 527 U.
S. 1068 (1999), and now reverse the Court of
How did defendant Carle actually act on the patient - who was the plan's
What complicated the legal relationship between the agent and the plan?
 Whether Carle is a fiduciary
when it acts through its physician owners as pleaded in the ERISA count depends
on some background of fact and law about HMO organizations, medical benefit
plans, fiduciary obligation, and the meaning of Herdrich's
What is fee for service (FFS) medicine?
If the doc spends a lot on care for a patient in the FFS
system, who pays it and who get it?
What does the court say is the legal limit on this incentive?
 Traditionally, medical care
in the United States
has been provided on a "fee-for-service" basis. A physician charges
so much for a general physical exam, a vaccination, a tonsillectomy, and so on.
The physician bills the patient for services provided or, if there is insurance
and the doctor is willing, submits the bill for the patient's care to the
insurer, for payment subject to the terms of the insurance agreement. Cf. R.
Rosenblatt, S. Law, & S. Rosenbaum, Law and the American Health Care System
543-544 (1997) (hereinafter Rosenblatt) (citing Weiner & de Lissovoy, Razing a Tower of Babel: A Taxonomy for Managed
Care and Health Insurance Plans, 18 J. Health Politics, Policy & Law 75, 76-78
(Summer 1993)). In a fee-for-service system, a physician's financial incentive
is to provide more care, not less, so long as payment is forthcoming. The check
on this incentive is a physician's obligation to exercise reasonable medical
skill and judgment in the patient's interest.
How does the HMO model change this incentive?
If the doc in an HMO spends a lot on a patient, what is the consequence for
If the doc limits what she does to the patient, what is the consequence for
 Beginning in the late
1960's, insurers and others developed new models for health-care delivery,
including HMOs. Cf. Rosenblatt 546. The defining feature of an HMO is receipt
of a fixed fee for each patient enrolled under the terms of a contract to
provide specified health care if needed. The HMO thus assumes the financial
risk of providing the benefits promised: if a participant never gets sick, the
HMO keeps the money regardless, and if a participant becomes expensively ill,
the HMO is responsible for the treatment agreed upon even if its cost exceeds
the participant's premiums.
How do HMOs attempt to limit health care costs?
What is Utilization Review?
When can these strategies benefit HMO patients?
When do they hurt them?
 Like other risk-bearing organizations,
HMOs take steps to control costs. At the least, HMOs, like traditional
insurers, will in some fashion make coverage determinations, scrutinizing
requested services against the contractual provisions to make sure that a
request for care falls within the scope of covered circumstances (pregnancy,
for example), or that a given treatment falls within the scope of the care
promised (surgery, for instance). They customarily issue general guidelines for
their physicians about appropriate levels of care. See id., at 568-570. And
they commonly require utilization review (in which specific treatment decisions
are reviewed by a decisionmaker other than the treating physician) and approval
in advance (precertification) for many types of care,
keyed to standards of medical necessity or the reasonableness of the proposed
treatment. See Andreson, Is Utilization Review the
Practice of Medicine?, Implications for Managed Care Administrators,
19 J. Legal Med. 431, 432 (Sept. 1998).
What financial incentives do the plans put on the docs?
How were these particularly direct in this case?
These cost-controlling measures are commonly complemented by specific
financial incentives to physicians, rewarding them for decreasing utilization
of health-care services, and penalizing them for what may be found to be
excessive treatment, see Rosenblatt 563-565; John K. Iglehart,
Health Policy Report: The American Health Care System -- Managed Care, 327 New
England J. Med. 742, 742-747 (1992). Hence, in an HMO system, a physician's
financial interest lies in providing less care, not more. The check on this
influence (like that on the converse, fee-for-service incentive) is the
professional obligation to provide covered services with a reasonable degree of
skill and judgment in the patient's interest. See Brief for American Medical
Association as Amicus Curiae 17-21.
What are the legal limits to how much these incentives limit care?
One problem that the court does not discuss is the time frame.
When do the physicians see the incentives?
When do they pay damages if they are sued?
Who pays the damages if they are sued?
Do their insurance rates go up if they are sued?
Who pays if they do not modify their behavior based on the incentives?
If the physician depends on the plan for patients, what is the effect of
bucking the system and getting booted from the plan?
How does this compare with the threat of malpractice litigation in the
 The adequacy of professional
obligation to counter financial self-interest has been challenged no matter
what the form of medical organization. HMOs became popular because
fee-for-service physicians were thought to be providing unnecessary or useless
services; today, many doctors and other observers argue that HMOs often ignore
the individual needs of a patient in order to improve the HMOs' bottom lines.
See, e. g., 154 F. 3d, at 375-378 (citing various critics of HMOs).*fn4 In this
case, for instance, one could argue that Pegram's
decision to wait before getting an ultrasound for Herdrich,
and her insistence that the ultrasound be done at a distant facility owned by
Carle, reflected an interest in limiting the HMO's expenses, which blinded her
to the need for immediate diagnosis and treatment.
focuses on the Carle scheme's provision for a "year-end
distribution," n. 3, supra, to the HMO's physician owners. She argues that
this particular incentive device of annually paying physician owners the profit
resulting from their own decisions rationing care can distinguish Carle's
organization from HMOs generally, so that reviewing Carle's decisions under a
fiduciary standard as pleaded in Herdrich's complaint
would not open the door to like claims about other HMO structures. While the
Court of Appeals agreed, we think otherwise, under the law as now written.
Does the court think that these HMO incentives are per se bad?
Who do they benefit?
 Although it is true that the
relationship between sparing medical treatment and physician reward is not a
subtle one under the Carle scheme, no HMO organization could survive without
some incentive connecting physician reward with treatment rationing. The
essence of an HMO is that salaries and profits are limited by the HMO's fixed
membership fees. See Orentlicher, Paying Physicians
More To Do Less: Financial Incentives to Limit Care, 30 U. Rich. L. Rev. 155,
174 (1996). This is not to suggest that the Carle provisions are as socially
desirable as some other HMO organizational schemes; they may not be. See, e.g.,
Grumbach, Osmond, Vranigan,
Jaffe, & Bindman, Primary Care Physicians'
Experience of Financial Incentives in Managed-Care Systems, 339 New Eng. J.
Med. 1516 (1998) (arguing that HMOs that reward quality of care and patient
satisfaction would be preferable to HMOs that reward only physician
productivity). But whatever the HMO, there must be rationing and inducement to
What would be result if the court were to say that all incentives to limit
care are violations of ERISA fiduciary obligations?
 Since inducement to ration
care goes to the very point of any HMO scheme, and rationing necessarily raises
some risks while reducing others (ruptured appendixes are more likely;
unnecessary appendectomies are less so), any legal principle purporting to draw
a line between good and bad HMOs would embody, in effect, a judgment about
socially acceptable medical risk. A valid conclusion of this sort would,
however, necessarily turn on facts to which courts would probably not have
ready access: correlations between malpractice rates and various HMO models,
similar correlations involving fee-for-service models, and so on. And, of
course, assuming such material could be obtained by courts in litigation like
this, any standard defining the unacceptably risky HMO structure (and consequent
vulnerability to claims like Herdrich's) would depend
on a judgment about the appropriate level of expenditure for health care in
light of the associated malpractice risk. But such complicated factfinding and such a debatable social judgment are not wisely
required of courts unless for some reason resort cannot be had to the
legislative process, with its preferable forum for comprehensive investigations
and judgments of social value, such as optimum treatment levels and health care
expenditure. Cf. Turner Broadcasting System, Inc. v. FCC, 512 U.
S. 622, 665-666 (1994) (opinion of Kennedy,
J.) ("Congress is far better equipped than the judiciary to `amass and
evaluate the vast amounts of data' bearing upon an issue as complex and dynamic
as that presented here" (quoting Walters v. National Assn. of Radiation
Survivors, 473 U. S. 305, 331, n. 12 (1985))); Patsy v. Board of Regents of
Fla., 457 U. S. 496, 513 (1982) ("[T]he relevant policy considerations do
not invariably point in one direction, and there is vehement disagreement over
the validity of the assumptions underlying many of them. The very difficulty of
these policy considerations, and Congress' superior institutional competence to
pursue this debate, suggest that legislative not judicial solutions are
preferable" (footnote omitted)).
 We think, then, that courts
are not in a position to derive a sound legal principle to differentiate an HMO
like Carle from other HMOs.*fn5 For that reason, we proceed on the assumption
that the decisions listed in Herdrich's complaint
cannot be subject to a claim that they violate fiduciary standards unless all
such decisions by all HMOs acting through their owner or employee physicians
are to be judged by the same standards and subject to the same claims.
Paragraph 50 - The hard question - what is the plan?
Is it the incentive scheme that governs the delivery of care by the docs?
 We turn now from the
structure of HMOs to the requirements of ERISA. A fiduciary within the meaning
of ERISA must be someone acting in the capacity of manager, administrator, or
financial adviser to a "plan," see 29 U. S. C. §§1002(21)(A)(i)-(iii), and Herdich's ERISA
count accordingly charged Carle with a breach of fiduciary duty in discharging
its obligations under State Farm's medical plan. App. to Pet. for Cert.
85a-86a. ERISA's definition of an employee welfare
benefit plan is ultimately circular: "any plan, fund, or program ... to
the extent that such plan, fund, or program was established ... for the purpose
of providing ... through the purchase of insurance or otherwise ... medical,
surgical, or hospital care or benefits." §1002(1)(A). One is thus left to
the common understanding of the word "plan" as referring to a scheme
decided upon in advance, see Webster's New International Dictionary 1879 (2d
ed. 1957); Jacobson & Pomfret, Form, Function,
and Managed Care Torts: Achieving Fairness and Equity in ERISA Jurisprudence,
35 Houston L. Rev. 985, 1050 (1998). Here the scheme comprises a set of rules
that define the rights of a beneficiary and provide for their enforcement.
Rules governing collection of premiums, definition of benefits, submission of
claims, and resolution of disagreements over entitlement to services are the
sorts of provisions that constitute a plan. See Hansen v. Continental Ins. Co.,
940 F. 2d 971, 974 (CA5 1991). Thus, when employers contract with an HMO to
provide benefits to employees subject to ERISA, the provisions of documents
that set up the HMO are not, as such, an ERISA plan, but the agreement between
an HMO and an employer who pays the premiums may, as here, provide elements of
a plan by setting out rules under which beneficiaries will be entitled to care.
 As just noted, fiduciary
obligations can apply to managing, advising, and administering an ERISA plan,
the fiduciary function addressed by Herdrich's ERISA
count being the exercise of "discretionary authority or discretionary
responsibility in the administration of [an ERISA] plan," 29 U. S. C.
§1002(21)(A)(iii). And as we have already suggested, although Carle is not an
ERISA fiduciary merely because it administers or exercises discretionary
authority over its own HMO business, it may still be a fiduciary if it
administers the plan.
 In general terms, fiduciary
responsibility under ERISA is simply stated. The statute provides that
fiduciaries shall discharge their duties with respect to a plan "solely in
the interest of the participants and beneficiaries," §1104(a)(1), that is,
"for the exclusive purpose of (i) providing
benefits to participants and their beneficiaries; and (ii) defraying reasonable
expenses of administering the plan," §1104(a)(1)(A).*fn6 These
responsibilities imposed by ERISA have the familiar ring of their source in the
common law of trusts. See Central States, Southeast & Southwest Areas
Pension Fund v. Central Transport, Inc., 472 U. S. 559, 570 (1985) ("[R]ather than explicitly enumerating all of the powers and
duties of trustees and other fiduciaries, Congress invoked the common law of
trusts to define the general scope of their authority and
responsibility"). Thus, the common law (understood as including what were
once the distinct rules of equity) charges fiduciaries with a duty of loyalty
to guarantee beneficiaries' interests: "The most fundamental duty owed by
the trustee to the beneficiaries of the trust is the duty of loyalty... . It is
the duty of a trustee to administer the trust solely in the interest of the
beneficiaries." 2A A. Scott & W. Fratcher,
Trusts §170, 311 (4th ed. 1987) (hereinafter Scott); see also G. Bogert & G. Bogert, Law of
Trusts and Trustees §543 (rev. 2d ed. 1980) ("Perhaps the most fundamental
duty of a trustee is that he must display throughout the administration of the
trust complete loyalty to the interests of the beneficiary and must exclude all
selfish interest and all consideration of the interests of third
persons"); Central States, supra, at 570-571; Meinhard
v. Salmon, 249 N. Y. 458, 464, 164 N. E. 545, 546 (1928) (Cardozo,
J.) ("Many forms of conduct permissible in a workaday world for those
acting at arm's length, are forbidden to those bound by fiduciary ties. A
trustee is held to something stricter than the morals of the market place. Not
honesty alone, but the punctilio of an honor the most sensitive, is then the
standard of behavior").
 Beyond the threshold
statement of responsibility, however, the analogy between ERISA fiduciary and
common law trustee becomes problematic. This is so because the trustee at
common law characteristically wears only his fiduciary hat when he takes action
to affect a beneficiary, whereas the trustee under ERISA may wear different
What does Professor Scott tell us about the trustee's duty under
traditional fiduciary law?
 Speaking of the traditional
trustee, Professor Scott's treatise admonishes that the trustee "is not permitted to place himself in
a position where it would be for his own benefit to violate his duty to the
beneficiaries." 2A Scott, §170, at 311. Under ERISA, however, a
fiduciary may have financial interests adverse to beneficiaries. Employers, for
example, can be ERISA fiduciaries and still take actions to the disadvantage of
employee beneficiaries, when they act as employers (e.g., firing a beneficiary
for reasons unrelated to the ERISA plan), or even as plan sponsors (e.g.,
modifying the terms of a plan as allowed by ERISA to provide less generous
benefits). Nor is there any apparent reason in the ERISA provisions to
conclude, as Herdrich argues, that this tension is
permissible only for the employer or plan sponsor, to the exclusion of persons
who provide services to an ERISA plan.
Who are the three stakeholders in an employee health plan?
How do their interests differ?
The hard question is who is an ERISA fiduciary.
As the court says, it is not just someone who is an administrator of the
plan: "Instead it [ERISA] defines an administrator, for example, as a
fiduciary only "to the extent" that he acts in such a capacity in
relation to a plan."
The question is not whether someone's decisions adversely affected a plan
beneficiary's interests, but whether that person was acting as a fiduciary.
 ERISA does require, however,
that the fiduciary with two hats wear only one at a time, and wear the
fiduciary hat when making fiduciary decisions. See Hughes Aircraft Co. v.
Jacobson, 525 U. S.
432, 443-444 (1999); Varity Corp. v. Howe, 516 U.
S. 489, 497 (1996). Thus, the statute does
not describe fiduciaries simply as administrators of the plan, or managers or
advisers. Instead it defines an administrator, for example, as a fiduciary only
"to the extent" that he acts in such a capacity in relation to a
plan. 29 U. S. C. §1002(21)(A). In every case charging breach of ERISA
fiduciary duty, then, the threshold question is not whether the actions of some
person employed to provide services under a plan adversely affected a plan
beneficiary's interest, but whether that person was acting as a fiduciary (that
is, was performing a fiduciary function) when taking the action subject to
What was the problem with Herdrich's ERISA count?
 The allegations of Herdrich's ERISA count that identify the claimed fiduciary
breach are difficult to understand. In this count, Herdrich
does not point to a particular act by any Carle physician owner as a breach.
She does not complain about Pegram's actions, and at
oral argument her counsel confirmed that the ERISA count could have been
brought, and would have been no different, if Herdrich
had never had a sick day in her life. Tr. of Oral Arg. 53-54.
Does she claim that it was her specific treatment decisions that were the
breach of the fiduciary duty?
Under her theory, how would the ERISA duty to her have been breached even
if she had never sought care under the plan?
 What she does claim is that
Carle, acting through its physician owners, breached its duty to act solely in
the interest of beneficiaries by making decisions affecting medical treatment
while influenced by the terms of the Carle HMO scheme, under which the physician
owners ultimately profit from their own choices to minimize the medical
services provided. She emphasizes the threat to fiduciary responsibility in the
Carle scheme's feature of a year-end distribution to the physicians of profit
derived from the spread between subscription income and expenses of care and
administration. App. to Pet. for Cert. 86a.
Does ERISA set out the details of the benefits that a plan must offer?
Would leaving out coverage for an important health care problem, such as
diabetes, be a violation of ERISA?
 The specific payout detail
of the plan was, of course, a feature that the employer as plan sponsor was
free to adopt without breach of any fiduciary duty under ERISA, since an
employer's decisions about the content of a plan are not themselves fiduciary
acts. Lockheed Corp. v. Spink, 517 U. S.
882, 887 (1996) ("Nothing in ERISA requires employers to establish
employee benefit plans. Nor does ERISA mandate what kind of benefit employers
must provide if they choose to have such a plan").*fn7
Why is the payout structure of the HMO outside of ERISA?
Likewise it is clear that there was no violation of ERISA when the
incorporators of the Carle HMO provided for the year-end payout. The HMO is not
the ERISA plan, and the incorporation of the HMO preceded its contract with the
State Farm plan. See 29 U. S.
C. §1109(b) (no fiduciary liability for acts preceding fiduciary status).
Did the HMO exist before the ERISA plan?
In plaintiff's view, what made it into an ERISA plan?
 The nub of the claim, then,
is that when State Farm contracted with Carle, Carle became a fiduciary under
the plan, acting through its physicians. At once, Carle as fiduciary
administrator was subject to such influence from the year-end payout provision
that its fiduciary capacity was necessarily compromised, and its readiness to
act amounted to anticipatory breach of fiduciary obligation.
The court divides plan decisions into treatment and eligibility decisions.
What is an example of each?
Why are treatment decisions often mixed with eligibility decisions?
What is medical necessity?
Why is any decision based on medical necessity a mixed decision?
For example, why is payment for care in an emergency room a mixed decision?
What would be an example of a pure eligibility decision?
 The pleadings must also be
parsed very carefully to understand what acts by physician owners acting on
Carle's behalf are alleged to be fiduciary in nature.*fn8 It will help to keep
two sorts of arguably administrative acts in mind. Cf. Dukes v. U. S.
Healthcare, Inc., 57 F. 3d 350, 361 (CA3 1995) (discussing dual
medical/administrative roles of HMOs). What we will call pure "eligibility
decisions" turn on the plan's coverage of a particular condition or
medical procedure for its treatment. "Treatment decisions," by
contrast, are choices about how to go about diagnosing and treating a patent's
condition: given a patient's constellation of symptoms, what is the appropriate
 These decisions are often practically
inextricable from one another, as amici on both sides
agree. See Brief for Washington Legal
Foundation as Amicus Curiae 12; Brief of Health Law, Policy, and Ethics
Scholars as Amici Curiae 10. This is so not merely
because, under a scheme like Carle's, treatment and eligibility decisions are
made by the same person, the treating physician. It is so because a great many
and possibly most coverage questions are not simple yes-or-no questions, like
whether appendicitis is a covered condition (when there is no dispute that a
patient has appendicitis), or whether acupuncture is a covered procedure for
pain relief (when the claim of pain is unchallenged). The more common coverage
question is a when-and-how question. Although coverage for many conditions will
be clear and various treatment options will be indisputably compensable,
physicians still must decide what to do in particular cases. The issue may be,
say, whether one treatment option is so superior to another under the
circumstances, and needed so promptly, that a decision to proceed with it would
meet the medical necessity requirement that conditions the HMO's obligation to
provide or pay for that particular procedure at that time in that case. The
Government in its brief alludes to a similar example when it discusses an HMO's
refusal to pay for emergency care on the ground that the situation giving rise
to the need for care was not an emergency, Brief for United States as Amicus
Curiae 20-21.*fn9 In practical terms, these eligibility decisions cannot be
untangled from physicians' judgments about reasonable medical treatment, and in
the case before us, Dr. Pegram's decision was one of
that sort. She decided (wrongly, as it turned out) that Herdrich's
condition did not warrant immediate action; the consequence of that medical
determination was that Carle would not cover immediate care, whereas it would
have done so if Dr. Pegram had made the proper
diagnosis and judgment to treat. The eligibility decision and the treatment
decision were inextricably mixed, as they are in countless medical
administrative decisions every day.
What decisions did Pegram make about plaintiff's
How would you characterize these decisions?
 The kinds of decisions
mentioned in Herdrich's ERISA count and claimed to be
fiduciary in character are just such mixed eligibility and treatment decisions:
physicians' conclusions about when to use diagnostic tests; about seeking
consultations and making referrals to physicians and facilities other than
Carle's; about proper standards of care, the experimental character of a
proposed course of treatment, the reasonableness of a certain treatment, and
the emergency character of a medical condition.
Did Pegram make any pure eligibility decisions?
 We do not read the ERISA
count, however, as alleging fiduciary breach with reference to a different
variety of administrative decisions, those we have called pure eligibility
determinations, such as whether a plan covers an undisputed case of
appendicitis. Nor do we read it as claiming breach by reference to discrete
administrative decisions separate from medical judgments; say, rejecting a
claim for no other reason than the HMO's financial condition. The closest Herdrich's ERISA count comes to stating a claim for a pure,
unmixed eligibility decision is her general allegation that Carle determines
"which claims are covered under the Plan and to what extent," App. to
Pet. for Cert. 86a. But this vague statement, difficult to interpret in
isolation, is given content by the other elements of the complaint, all of
which refer to decisions thoroughly mixed with medical judgment. Cf. 5A C.
Wright & A. Miller, Federal Practice and Procedure §1357, pp. 320-321
(1990) (noting that, where specific allegations clarify the meaning of broader
allegations, they may be used to interpret the complaint as a whole). Any
lingering uncertainty about what Herdrich has in mind
is dispelled by her brief, which explains that this allegation, like the
others, targets medical necessity determinations. Brief for Respondent 19; see
also id., at 3.*fn10
 Based on our understanding
of the matters just discussed, we think Congress did not intend Carle or any
other HMO to be treated as a fiduciary to the extent that it makes mixed eligibility
decisions acting through its physicians. We begin with doubt that Congress
would ever have thought of a mixed eligibility decision as fiduciary in nature.
At common law, fiduciary duties characteristically attach to decisions about
managing assets and distributing property to beneficiaries. See Bogert & Bogert, Law of
Trusts and Trustees, §§551, 741-747, 751-775, 781-799; 2A Scott, §§176, 181, 3
id., §§188-193, 3A id., §232. Trustees buy, sell, and lease investment
property, lend and borrow, and do other things to conserve and nurture assets.
They pay out income, choose beneficiaries, and distribute remainders at
termination. Thus, the common law trustee's most defining concern historically
has been the payment of money in the interest of the beneficiary.
 Mixed eligibility decisions
by an HMO acting through its physicians have, however, only a limited
resemblance to the usual business of traditional trustees. To be sure, the
physicians (like regular trustees) draw on resources held for others and make
decisions to distribute them in accordance with entitlements expressed in a
written instrument (embodying the terms of an ERISA plan). It is also true that
the objects of many traditional private and public trusts are ultimately the
same as the ERISA plans that contract with HMOs. Private trusts provide medical
care to the poor; thousands of independent hospitals are privately held and
publicly accountable trusts, and charitable foundations make grants to
stimulate the provision of health services. But beyond this point the
resemblance rapidly wanes.
How is a traditional trustee's fiduciary duty different from a physician's
What is the special conflict in the physician's duty that should not be
present in a traditional trustee's duty? (Or if it is, it is subject to special
scrutiny by the courts.)
Traditional trustees administer a
medical trust by paying out money to buy medical care, whereas physicians
making mixed eligibility decisions consume the money as well. Private
trustees do not make treatment judgments, whereas treatment judgments are what
physicians reaching mixed decisions do make, by definition. Indeed, the
physicians through whom HMOs act make just the sorts of decisions made by
licensed medical practitioners millions of times every day, in every possible
medical setting: HMOs, fee-for-service proprietorships, public and private
hospitals, military field hospitals, and so on. The settings bear no more
resemblance to trust departments than a decision to operate turns on the
factors controlling the amount of a quarterly income distribution. Thus, it is
at least questionable whether Congress would have had mixed eligibility
decisions in mind when it provided that decisions administering a plan were
fiduciary in nature.
What type of plans did Congress have in mind when it drafted ERISA?
How are these and the problems with them different from health plans?
Indeed, when Congress took up the subject of fiduciary responsibility under
ERISA, it concentrated on fiduciaries' financial decisions, focusing on pension
plans, the difficulty many retirees faced in getting the payments they
expected, and the financial mismanagement that had too often deprived employees
of their benefits. See, e.g., S. Rep. No. 93-127, p. 5 (1973); S. Rep. No.
93-383, p. 17 (1973); id., at 95. Its focus was far from the subject of Herdrich's claim.
 Our doubt that Congress
intended the category of fiduciary administrative functions to encompass the
mixed determinations at issue here hardens into conviction when we consider the
consequences that would follow from Herdrich's
The court's decision is driven by policy considerations: "Our doubt
that Congress intended the category of fiduciary administrative functions to
encompass the mixed determinations at issue here hardens into conviction when
we consider the consequences that would follow from Herdrich's
Plaintiff argues that the fiduciary standard should
be applied against the HMO generally for the conflicts inherent in its
incentive scheme, rather than used to determine if a specific decision was
 First, we need to ask how
this fiduciary standard would affect HMOs if it applied as Herdrich
claims it should be applied, not directed against any particular mixed decision
that injured a patient, but against HMOs that make mixed decisions in the
course of providing medical care for profit. Recovery would be warranted simply
upon showing that the profit incentive to ration care would generally affect
mixed decisions, in derogation of the fiduciary standard to act solely in the
interest of the patient without possibility of conflict.
What is her measure of damages?
Although Herdrich is vague about the mechanics of
relief, the one point that seems clear is that she seeks the return of profit
from the pockets of the Carle HMO's owners, with the money to be given to the
plan for the benefit of the participants. See 29 U.
S. C. §1109(a) (return of all profits is an
appropriate ERISA remedy).
What does the court say would be the effect of this
on for-profit HMOs?
Would it apply equally to a non-profit HMO if it
had the same inventives?
Since the provision for profit is what makes the HMO a proprietary
organization, her remedy in effect would be nothing less than elimination of
the for-profit HMO. Her remedy might entail even more than that, although we
are in no position to tell whether and to what extent nonprofit HMO schemes
would ultimately survive the recognition of Herdrich's
theory.*fn11 It is enough to recognize that the Judiciary has no warrant to
precipitate the upheaval that would follow a refusal to dismiss Herdrich's ERISA claim.
What is the evidence that Congress believes HMOs are good policy?
The fact is that for over 27 years the Congress of the United
States has promoted the formation of HMO
practices. The Health Maintenance Organization Act of 1973, 87 Stat. 914, 42 U.
S. C. §300e et seq., allowed the formation of HMOs that assume financial risks
for the provision of health care services, and Congress has amended the Act
several times, most recently in 1996. See 110 Stat. 1976, codified at 42 U.
S. C. §300e (1994 ed, Supp. III). If
Congress wishes to restrict its approval of HMO practice to certain preferred
forms, it may choose to do so. But the Federal Judiciary would be acting
contrary to the congressional policy of allowing HMO organizations if it were
to entertain an ERISA fiduciary claim portending wholesale attacks on existing
HMOs solely because of their structure, untethered to
claims of concrete harm.
 The Court of Appeals did not
purport to entertain quite the broadside attack that Herdrich's
ERISA claim thus entails, see 154 F. 3d, at 373, and the second possible
consequence of applying the fiduciary standard that requires our attention
would flow from the difficulty of extending it to particular mixed decisions
that on Herdrich's theory are fiduciary in nature.
 The fiduciary is, of course,
obliged to act exclusively in the interest of the beneficiary, but this
translates into no rule readily applicable to HMO decisions or those of any
other variety of medical practice. While the incentive of the HMO physician is
to give treatment sparingly, imposing a fiduciary obligation upon him would not
lead to a simple default rule, say, that whenever it is reasonably possible to
disagree about treatment options, the physician should treat aggressively.
Does the court think that more care is necessarily better care?
After all, HMOs came into being because some groups of physicians
consistently provided more aggressive treatment than others in similar
circumstances, with results not perceived as justified by the marginal expense
and risk associated with intervention; excessive surgery is not in the
patient's best interest, whether provided by fee-for-service surgeons or HMO
surgeons subject to a default rule urging them to operate. Nor would it be
possible to translate fiduciary duty into a standard that would allow recovery
from an HMO whenever a mixed decision influenced by the HMO's financial
incentive resulted in a bad outcome for the patient. It would be so easy to
allege, and to find, an economic influence when sparing care did not lead to a
well patient, that any such standard in practice would allow a factfinder to convert an HMO into a guarantor of recovery.
 These difficulties may have
led the Court of Appeals to try to confine the fiduciary breach to cases where
"the sole purpose" of delaying or withholding treatment was to
increase the physician's financial reward, ibid. But this attempt to confine
mixed decision claims to their most egregious examples entails erroneous
corruption of fiduciary obligation and would simply lead to further
difficulties that we think fatal. While a mixed decision made solely to benefit
the HMO or its physician would violate a fiduciary duty, the fiduciary standard
condemns far more than that, in its requirement of "an eye single"
toward beneficiaries' interests, Donovan v. Bierwirth,
680 F. 2d 263, 271 (CA2 1982).
What would a physician have to show to defend a claim that his medical
decisions were driven by financial incentives rather than patient care
But whether under the Court of Appeals's rule or
a straight standard of undivided loyalty, the defense of any HMO would be that
its physician did not act out of financial interest but for good medical
reasons, the plausibility of which would require reference to standards of
reasonable and customary medical practice in like circumstances. That, of
course, is the traditional standard of the common law. See W. Keeton, D. Dobbs,
R. Keeton, & D. Owens, Prosser and Keeton on Law of Torts §32, pp. 188-189
(5th ed. 1984).
What would this transform the fiduciary claims into?
Thus, for all practical purposes, every claim of fiduciary breach by an HMO
physician making a mixed decision would boil down to a malpractice claim, and
the fiduciary standard would be nothing but the malpractice standard
traditionally applied in actions against physicians.
While there might be some advantages to the plaintiff in being able to
bring these case in federal court, including an award of attorney's fees, the
court does not believe that this is what Congress had in mind.
 What would be the value to
the plan participant of having this kind of ERISA fiduciary action? It would
simply apply the law already available in state courts and federal diversity
actions today, and the formulaic addition of an allegation of financial
incentive would do nothing but bring the same claim into a federal court under
federal-question jurisdiction. It is true that in States that do not allow
malpractice actions against HMOs the fiduciary claim would offer a plaintiff a
further defendant to be sued for direct liability, and in some cases the HMO
might have a deeper pocket than the physician. But we have seen enough to know
that ERISA was not enacted out of concern that physicians were too poor to be
sued, or in order to federalize malpractice litigation in the name of fiduciary
duty for any other reason. It is difficult, in fact, to find any advantage to
participants across the board, except that allowing them to bring malpractice
actions in the guise of federal fiduciary breach claims against HMOs would make
them eligible for awards of attorney's fees if they won. See 29 U. S. C.
§1132(g)(1). But, again, we can be fairly sure that Congress did not create
fiduciary obligations out of concern that state plaintiffs were not suing often
enough, or were paying too much in legal fees.
 The mischief of Herdrich's position would, indeed, go further than mere
replication of state malpractice actions with HMO defendants. For not only
would an HMO be liable as a fiduciary in the first instance for its own breach
of fiduciary duty committed through the acts of its physician employee, but the
physician employee would also be subject to liability as a fiduciary on the
same basic analysis that would charge the HMO. The physician who made the mixed
administrative decision would be exercising authority in the way described by
ERISA and would therefore be deemed to be a fiduciary. See 29 CFR §§2509.75-5, Question D1; 2509.75-8, Question D-3
(1993) (stating that an individual who exercises authority on behalf of an
ERISA fiduciary in interpreting and administering a plan will be deemed a
fiduciary). Hence the physician, too, would be subject to suit in federal court
applying an ERISA standard of reasonable medical skill. This result, in turn,
would raise a puzzling issue of preemption. On its face, federal fiduciary law
applying a malpractice standard would seem to be a prescription for preemption
of state malpractice law, since the new ERISA cause of action would cover the
subject of a state-law malpractice claim. See 29 U.
S. C. §1144 (preempting state laws that
"relate to [an] employee benefit plan"). To be sure, New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.
S. 645, 654-655 (1995), throws some cold
water on the preemption theory; there, we held that, in the field of health
care, a subject of traditional state regulation, there is no ERISA preemption
without clear manifestation of congressional purpose. But in that case the
convergence of state and federal law was not so clear as in the situation we
are positing; the state-law standard had not been subsumed by the standard to
be applied under ERISA. We could struggle with this problem, but first it is
well to ask, again, what would be gained by opening the federal courthouse
doors for a fiduciary malpractice claim, save for possibly random fortuities
such as more favorable scheduling, or the ancillary opportunity to seek
attorney's fees. And again, we know that Congress had no such haphazard boons
in prospect when it defined the ERISA fiduciary, nor such a risk to the
efficiency of federal courts as a new fiduciary-malpractice jurisdiction would
pose in welcoming such unheard-of fiduciary litigation.
What did the court rule about plaintiff's ERISA claim?
What does this do to the malpractice defense argument that mixed decisions
are covered by ERISA and thus can removed to federal court and dismissed?
So plaintiff lost this case, but the court makes it clear that mixed
decisions are just state medical malpractice claims and are not subject to
 We hold that mixed
eligibility decisions by HMO physicians are not fiduciary decisions under
ERISA. Herdrich's ERISA count fails to state an ERISA
claim, and the judgment of the Court of Appeals is reversed.
 It is so ordered.
 *fn1 Although Lori Pegram, a physician owner of Carle, is listed as a
petitioner, it is unclear to us that she retains a direct interest in the
outcome of this case.
 *fn2 Herdrich
does not contest the propriety of removal before us, and we take no position on
whether or not the case was properly removed. As we will explain, Herdrich's amended complaint alleged ERISA violations, over
which the federal courts have jurisdiction, and we therefore have jurisdiction
regardless of the correctness of the removal. See Grubbs v. General Elec.
Credit Corp., 405 U. S.
699 (1972); Mackay v. Uinta Development Co., 229 U.
S. 173 (1913).
 *fn3 The specific
allegations were these: "11. Defendants are fiduciaries with respect to
the Plan and under 29 [U. S. C. §]1109(a) are obligated to discharge their
duties with respect to the Plan solely in the interest of the participants and
beneficiaries and "a. for the exclusive purpose of: "i. providing benefits to participants and their
beneficiaries; and "ii. defraying reasonable expenses of administering the
Plan; "b. with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and like aims. "12. In breach of that duty: "a. CARLE owner/physicians
are the officers and directors of HAMP and CHIMCO and receive a year-end distribution, based in large
part upon, supplemental medical expense payments made to CARLE by HAMP and CHIMCO; "b. Both HAMP and CHIMCO are directed and
controlled by CARLE owner/physicians and seek to fund their supplemental
medical expense payments to CARLE: "i. by
contracting with CARLE owner/physicians to provide the medical services
contemplated in the Plan and then having those contracted owner/physicians:
"(1) minimize the use of diagnostic tests; "(2) minimize the use of
facilities not owned by CARLE; and "(3) minimize the use of emergency and
non-emergency consultation and/or referrals to non-contracted physicians.
"ii. by administering disputed and non-routine health insurance claims and
determining: "(1) which claims are covered under the Plan and to what
extent; "(2) what the applicable standard of care is; "(3) whether a
course of treatment is experimental; "(4) whether a course of treatment is
reasonable and customary; and "(5) whether a medical condition is an
emergency." App to Pet. for Cert. 85a-86a.
 *fn4 There are, of course,
contrary perspectives, and we endorse neither side of the debate today.
 *fn5 They are certainly not
capable of making that distinction on a motion to dismiss; if we accepted the
Court of Appeals's reasoning, complaints against any
flavor of HMO would have to proceed at least to the summary judgment stage.
 *fn6 In addition,
fiduciaries must discharge their duties "(B) with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; "(C) by
diversifying the investments of the plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so; and
"(D) in accordance with the documents and instruments governing the plan
insofar as such documents and instruments are consistent with the provisions of
this subchapter and subchapter III of this chapter." 29 U. S. C.
 *fn7 It does not follow that
those who administer a particular plan design may not have difficulty in
following fiduciary standards if the design is awkward enough. A plan might
lawfully provide for a bonus for administrators who denied benefits to every
10th beneficiary, but it would be difficult for an administrator who received
the bonus to defend against the claim that he had not been solely attentive to
the beneficiaries' interests in carrying out his administrative duties. The
important point is that Herdrich is not suing the
employer, State Farm, and her claim cannot be analyzed as if she were.
 *fn8 Herdrich
argues that Carle is judicially estopped from denying
its fiduciary status as to the relevant decisions, because it sought and sucessfully defended removal of Herdrich's
state action to the Federal District Court on the ground that it was a
fiduciary with respect to Herdrich's fraud claims.
Judicial estoppel generally prevents a party from prevailing in one phase of a
case on an argument and then relying on a contradictory argument to prevail in
another phase. See Rissetto v. Plumbers &
Steamfitters Local 343, 94 F. 3d 597, 605 (CA9 1996). The fraud claims in Herdrich's initial complaint, however, could be read to
allege breach of a fiduciary obligation to disclose physician incentives to
limit care, whereas her amended complaint alleges an obligation to avoid such
incentives. Although we are not presented with the issue here, it could be
argued that Carle is a fiduciary insofar as it has discretionary authority to
administer the plan, and so it is obligated to disclose characteristics of the
plan and of those who provide services to the plan, if that information affects
beneficiaries' material interests. See, e.g., Glaziers and Glassworkers Union
Local No. 252 Annuity Fund v. Newbridge Securities,
Inc., 93 F. 3d 1171, 1179-1181 (CA3 1996) (discussing the disclosure
obligations of an ERISA fiduciary); cf. Varity Corp. v. Howe, 516 U. S. 489,
505 (1996) (holding that ERISA fiduciaries may have duties to disclose
information about plan prospects that they have no duty, or even power, to
change). But failure to disclose is no longer the allegation of the amended
complaint. Because fiduciary duty to disclose is not necessarily coextensive
with fiduciary responsibility for the subject matter of the disclosure, Carle
is not estopped from contesting its fiduciary status with
respect to the allegations of the amended complaint.
 *fn9 ERISA makes separate
provision for suits to receive particular benefits. See 29 U. S. C.
§1132(a)(1)(B). We have no occasion to discuss the standards governing such a
claim by a patient who, as in the example in text, was denied reimbursement for
emergency care. Nor have we reason to discuss the interaction of such a claim
with state law causes of action, see infra, at 24-25.
 *fn10 Though this case
involves a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),
and the complaint should therefore be construed generously, we may use Herdrich's brief to clarify allegations in her complaint
whose meaning is unclear. See C. Wright & A. Miller, Federal Practice and
Procedure, §1364, pp. 480-481 (1990); Southern Cross Overseas Agencies, Inc. v.
Wah Kwong Shipping Group
Ltd., 181 F. 3d 410, 428, n. 8 (CA3 1999); Alicke v.
MCI Communications Corp., 111 F. 3d 909, 911 (CADC
1997); Early v. Bankers Life & Cas. Co.,
959 F. 2d 75, 79 (CA7 1992).
 *fn11 Herdrich's
theory might well portend the end of nonprofit HMOs as well, since those HMOs
can set doctors' salaries. A claim against a nonprofit HMO could easily allege
that salaries were excessively high because they were funded by limiting care,
and some nonprofits actually use incentive schemes similar to that challenged
here, see Pulvers v. Kaiser Foundation Health Plan,
99 Cal. App. 3d 560, 565, 160 Cal. Rptr. 392, 393-394
(1979) (rejecting claim against nonprofit HMO based on physician incentives).
See Brody, Agents Without Principals: The Economic Convergence of the Nonprofit
and For-Profit Organizational Forms, 40 N. Y. L. S. L. Rev. 457, 493, and n.
152 (1996) (discussing ways in which nonprofit health providers may reward
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