McLaren Reg.’l Med. Ctr. v. City of Owosso

Tax Exemption

McLaren Reg.’l Med. Ctr. v. City of
Owosso, Wexford Med. Grp. No. 244386, 250197 (Mich. Ct. App. Aug. 24, 2004)

The Court of Appeals of Michigan held that a medical group, a medical management
company, and a regional medical center were not exempt from taxation of their
real and personal property. The court held that the public health tax exemption
is not available for a fairly typical medical practice whose patients are expected
to pay for medical care received, through either private or government insurance
programs.

The court first determined that the medical group was not exempt because,
of the over 44,000 patient visits it had per year, it provided no-cost services
to only 13 patients in a two-year span. The fact that the group had accepted
an unlimited number of Medicare and Medicaid patients was irrelevant.

The court also held that the medical management company and regional medical
center were not exempt because they did not establish that they operated other
than as typical private medical centers, rather than as organizations for the
benefit of the public at large. Furthermore, the regional medical center did
not use the property sought to be exempt from property tax as an inpatient
hospital, but as an extension of the hospital outpatient department.