- 36 -
remaining 79 percent of such physician services directly with
independent physicians. In other words, petitioner’s enrollees
received nearly 80 percent of their physician services from
physicians with no direct link to one of petitioner’s tax-exempt
affiliates.
Petitioner contends that its contracts with independent
physicians are not relevant to the question of whether it
qualifies for tax-exempt status as an integral part of its tax-
exempt IHC affiliates because all such independent physicians
were required to maintain privileges at Health Services’
hospitals. We disagree with the basic premise underlying
petitioner’s argument.
Health Services was composed of the hospital division, which
operated a large number of hospitals and clinics, and the
physician division, which employed 245 primary care physicians
and 215 specialist physicians who generally practiced in Health
Services’ clinics and other community-based settings. Health
Services’ status as an organization described in section
501(c)(3) is undoubtedly attributable to its willingness to
provide charity services and its participation in Medicare,
Medicaid, and other Government programs. Considering that
petitioner does not provide free or low cost health services, and
given the termination of its IHC Senior Care plan for Medicare
patients, we fail to see how petitioner’s operations, including
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011