IHC Care, Inc. - Page 9




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               high quality care to members of the community,                         
               including elderly and disadvantaged persons, and it may                
               conduct research and educational demonstration projects                
               with various health care delivery systems.                             
               Petitioner was licensed to operate an HMO in the State of              
          Utah and was subject to regulation by the Utah Insurance                    
          Commissioner.  Petitioner used the same network of health care              
          providers used by Health Plans.                                             
               2.  IHC Group, Inc.                                                    
               In July 1991, Health Plans organized Group as a nonprofit              
          affiliate for the purpose of establishing a federally qualified             
          medical group model HMO.5  Health Plans was Group’s sole                    
          corporate member.                                                           
               Group was licensed to operate an HMO in the State of Utah              
          and was subject to regulation by the Utah Insurance Commissioner.           
               IHC had effective control of Health Plans, petitioner, and             
          Group by virtue of its authority (direct and indirect) to elect             
          their boards of trustees.  Health Plans, petitioner, and Group              
          shared the same officers and trustees.                                      
          II.  Petitioner’s Operations                                                
               Health Plans structured its health plans in conjunction with           


          5    Group was considered a closed panel, medical group model HMO           
          because Group contracted for physician services with physician              
          medical groups and required its enrollees to agree to coordinate            
          all of their medical care through a primary care physician (PCP)            
          or so-called gatekeeper.  In cases in which the PCP determined              
          that an enrollee should be seen by a medical specialist, the PCP            
          generally was expected to refer the enrollee to a specialist                
          within the PCP’s medical group.                                             





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