Opinion ID: 163334
Heading Depth: 2
Heading Rank: 1

Heading: The IHC Integrated Delivery System

Text: 2 In 1970, the Church of Jesus Christ of Latter Day Saints (LDS Church) formed Health Services Corporation, later renamed Intermountain Health Care, Inc. (IHC), as a Utah nonprofit corporation. IHC assumed ownership and control of fifteen hospitals previously owned by the LDS Church. In 1975, the LDS Church transferred control of IHC to an independent board of trustees, comprised of persons representative of the community. The Internal Revenue Service (IRS) has consistently recognized IHC as a charitable, tax-exempt organization.
3 As part of its plan to streamline and integrate its provision of health-care services, IHC formed IHC Health Services, Inc. (Health Services) in 1982 as a Utah nonprofit corporation. In 1983, IHC transferred its hospitals and substantially all the assets necessary to its operation to Health Services. IHC then ceased operating hospitals directly and assumed the role of a parent company, with Health Services as IHC's principal health-care services organization. IHC is Health Services' sole corporate member and the board of trustees of IHC and Health Services are comprised of the same individuals. 4 At the end of 1999, Health Services operated twenty-two hospitals located in Utah and Idaho, employing approximately 300 primary care physicians and 100 specialist physicians in its Physician Division; it separately employed approximately 120 physicians in its Hospital Division. All Health Services hospitals participated in the Medicare and Medicaid programs for inpatient and outpatient hospital services. Between 1997 and 1999, Health Services provided nearly $1.2 billion in health-care services, without reimbursement, to patients covered by Medicare, Medicaid, and other governmental programs. During that same period, Health Services furnished more than $91 million in free health-care services to indigent patients. 5 The Commissioner has recognized Health Services as a tax-exempt organization under section 501(c)(3).
6 In order to further integrate its provision of health-care services, IHC formed Health Plans, Care, and Group to operate as health maintenance organizations (HMOs) within the IHC Integrated Delivery System. A detailed description of each organization is set forth in Sections I(B)-(D), infra.
7 IHC's board of trustees maintained governance power and control over Health Plans, Care, and Group. In particular, IHC had the authority, directly and indirectly, to elect petitioners' boards of trustees. IHC, Health Services, and petitioners shared many of the same corporate officers. 3 IHC conducted petitioners' strategic planning, established their priorities, and attempted to implement their business plans on an enterprise basis. Also, Health Services provided petitioners with centralized management services, including human resources, legal services, public relations, and treasury functions. 4