Memorial Hermann’s Bid for Tax Exemption Fails in Fifth Circuit

Memorial Hermann Accountable Care Organization isn’t entitled to a tax exemption meant for social welfare groups because it failed to show that its operations are exclusively intended to help the public, the Fifth Circuit said Monday.

Lowering the cost of health care alone doesn’t qualify MHACO for tax benefits because non-qualifying commercial entities do the same, the US Court of Appeals for the Fifth Circuit said.

MHACO had argued that it should qualify for a social welfare tax exemption because it helps individuals avoid duplicate medical services and lowers patient costs.

But the organization’s cost savings also benefit commercial insurers, ...