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2. IHC Group, Inc.
In July 1991, Health Plans organized petitioner as a
nonprofit affiliate for the purpose of establishing a federally
qualified medical group model HMO. Health Plans was petitioner’s
sole corporate member. Petitioner’s articles of incorporation
stated that petitioner
is organized and shall be operated exclusively for
charitable, educational, or scientific purposes as
described in section 501(c)(3) * * *.
In furtherance of such purposes, the Corporation
may develop and operate alternative health care
delivery plans and financing systems such as a health
maintenance organization to provide cost-effective and
high quality care to members of the community served by
the plans including elderly and disadvantaged persons,
and 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.
IHC had effective control of Health Plans, petitioner, and
Care by virtue of its authority (direct and indirect) to elect
their boards of trustees. Health Plans, petitioner, and Care
shared the same officers and trustees.
II. Petitioner’s Operations
Health Plans structured its health plans in conjunction with
petitioner’s and Care’s health plans in order to offer potential
enrollees a range of health services and pricing options. Health
Plans provided general and administrative services to petitioner
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Last modified: May 25, 2011