- 45 -
Although Geisinger HMO enrollees received all of their
physician services through Clinic, an exempt affiliate, Geisinger
HMO enrollees received approximately 20 percent of their hospital
services from independent hospitals. Because the record did not
disclose why Geisinger HMO enrollees received hospital services
from hospitals outside of the Geisinger system, we were unable to
conclude that Geisinger HMO’s operations were substantially
related to the functions of its tax-exempt affiliates. Id. at
404-406.
Like Geisinger HMO, petitioner neither owned nor operated
any medical facilities and did not employ a significant number of
physicians or health care professionals. Petitioner fulfilled
its obligation to provide medical services to its enrollees by
contracting with physicians (both physicians employed by Health
Services and independent physicians) and hospitals (both Health
Services hospitals and independent hospitals) to provide such
services. In contrast to Geisinger III, however, the
administrative record in this case indicates that the medical
services that petitioner’s enrollees received from independent
hospitals were largely attributable to admissions to either UMC
or Davis Hospital and Medical Center. Further, these admissions
were undertaken to: (1) Take advantage of specialized services
(such as burn treatment and pain management) provided at UMC; (2)
address occasional shortages of psychiatric beds in Health
Page: Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 NextLast modified: May 25, 2011