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its heavy reliance on independent physicians, would be essential
to or substantially related to Health Services’ exempt functions.
To the contrary, petitioner’s method of arranging for its
enrollees to receive physician services suggests that petitioner
conducted its operations on a scale “larger than is reasonably
necessary to accomplish the purposes of the exempt entities”.
Geisinger Health Plans v. Commissioner, 100 T.C. at 406.10
In sum, petitioner does not provide the community benefit
required for petitioner to qualify as an organization described
in section 501(c)(3). Further, petitioner’s operations are not
essential to or substantially related to Health Services’ exempt
functions. Consequently, petitioner is not entitled to the
declaratory judgment it seeks.
To reflect the foregoing,
Decision will be entered
for respondent.
10 Under the circumstances, we need not consider whether we
would apply the “boost” test set forth in Geisinger Health Plan
v. Commissioner, 30 F.3d 494, 501 (3d Cir. 1994). In addition,
we need not consider respondent’s alternative contention that
petitioner is not entitled to tax-exempt status pursuant to sec.
501(m) which provides that an organization described sec.
501(c)(3) shall not be entitled to tax-exempt status if a
substantial part of its activities consists of providing
commercial-type insurance.
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