- 12 -
member.
Care was licensed to operate an HMO in Utah. In 1985, the
Health Care Financing Administration (HCFA) recognized Care as a
federally qualified HMO.
In 1985, Care filed with respondent an application for
recognition as an organization that is exempt from taxation
pursuant to section 501(c)(3). In June 1999, respondent denied
Care’s application for tax-exempt status.
2. IHC Group, Inc.
In July 1991, petitioner organized Group as a nonprofit
affiliate for the purpose of establishing a federally qualified
medical group model HMO. Petitioner was Group’s sole corporate
member.
4(...continued)
obtain insurance: (1) for the cost of providing a member with
more than $5,000 in basic health services for any one year; (2)
for the cost of basic health services provided to a member by a
source outside the HMO due to an emergency; and (3) for not more
than 90 percent of the amount by which its costs for any fiscal
year exceeds 115 percent of its income. Additionally, the
section states that HMOs may enter into arrangements under which
physicians and/or health care institutions assume all or part of
the risk on a prospective basis for the provision to enrollees of
basic health services.
Petitioner organized IHC Care, Inc., and IHC Group, Inc.
(discussed below) as federally qualified HMOs to take advantage
of marketing opportunities presented under the so-called dual
choice mandate codified under 42 U.S.C. sec. 300e-9 (1976), which
required certain employers (generally those with more than 25
employees) to offer their employees the option of enrolling in a
federally qualified HMO.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011