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derivative exemption of an organization which serves only another
exempt organization and performs essential services that the
client organization otherwise would have performed for itself to
accomplish its own exempt purposes. See B.S.W. Group, Inc. v.
Commissioner, 70 T.C. 352, 360 (1978); University Med. Resident
Servs., P.C. v. Commissioner, supra, and cases cited therein.
Consistent with this rationale, professional group practices
serving exempt entities have been granted tax exemption under the
integral part doctrine. See University of Mass. Med. Sch. Group
Practice v. Commissioner, 74 T.C. 1299 (1980); B.H.W. Anesthesia
Found., Inc. v. Commissioner, 72 T.C. 681 (1979); University of
Md. Physicians, P.A. v. Commissioner, T.C. Memo. 1981-23. These
cases involved anesthesiology services or faculty medical
activities that were provided solely to the served hospital or
medical school and that were essential to the operation of the
hospital or medical school. See Geisinger Health Plan v.
Commissioner, 100 T.C. 394 (1993).
In Geisinger Health Plan v. Commissioner, supra, this Court
denied a claim for tax exemption asserted by an HMO under the
integral part theory. We reasoned that the group-practice line
of cases was not controlling because, unlike the exempt
organizations in those cases, the HMO had a population of
subscribers that did not overlap substantially with the patients
of the related exempt entities. In considering whether the HMO’S
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