Looks Like Hospital Costs Could Be Going Up

From Provena's web page.

A decision by the Illinois Supreme Court striping Urbana’s Provena Covenant Medical Centerl’s not-for-profit real estate tax exemption will reverberate across the state. Thanks to Capital Fax Blog for alerting me to the case.

Folks in Cook County have already been eying taxing hospitals. The Legal Assistance Foundation of Metropolitan Chicago filed a brief in support of ending the exemption.

This case may mean that any Board of Review can impose taxes on a hospital by removing its charitable exemption, if the Illinois Department of Revenue agrees.

Elgin’s Provena St. Joseph Hospital is part of the four-facility Catholic Church ownership group.

2nd Appellate Supreme Court Justice Robert Thomas concurred with the opinion.

The property tax bill in question amounted to $1.1 million.

Below is the reaction of the hospital to the decision:

Provena Covenant Officials Comment on High Court Ruling
03/18/2010Officials at Urbana-based Provena Covenant today released the following statement regarding an Illinois Supreme Court ruling that denied the Catholic hospital ministry exemption from paying property taxes:

“We are deeply disappointed that the Illinois Supreme Court has denied the property tax exemption of Provena Covenant Medical Center,” said Jon “Cody” Sokolski, Chair of the Board of Provena Covenant Medical Center.

“Provena Covenant Medical Center cares for all in our community who need our health services regardless of their ability to pay. Throughout this controversy, we continued to demonstrate that enduring commitment to Urbana-Champaign. In 2008, we provided more than $38 million in free care and other community benefits. Our goal is to carry on in our charitable works, despite the fact that this ruling restricts our ability to do so.”

David Bertauski, President and CEO of Provena Covenant, added,

“We are deeply grateful to those who support us, especially our dedicated employees who selflessly bring compassionate, faith-based care to our patients each and every day.

“We can only hope this troubling ruling prompts a dialogue among hospitals and elected officials to dialogue about not only how we define charity care but also how we better ensure that the people who need financial assistance get it. We will work to lead the way.”

In reading the decision, one deciding factor seems to be

“its funds are not derived mainly from private and public charity and held in trust for the purposes expressed in the charter. They are generated, overwhelmingly, by providing medical services for a fee.”

Another deciding factor was Provena

“likewise failed to show by clear and convincing evidence that it satisfied factors three or five, namely, that it dispensed charity to all who needed it and applied for it and did not appear to place any obstacles in the way of those who needed and would have availed themselves of the charitable benefits it dispenses.”

This part of the decision seems important:

“While Illinois law has never required that there be a direct, dollar-for-dollar correlation between the value of the tax exemption and the value of the goods or services provided by the charity, it is a sine qua non of charitable status that those seeking a charitable exemption be able to demonstrate that their activities will help alleviate some financial burden incurred by the affected taxing bodies in performing their governmental functions.”

In a dissent by Justice Ann Burke, she wrote,

“By imposing a quantum of care requirement and monetary threshold, the plurality is injecting itself into matters best left to the legislature.

“The legislature did not set forth a monetary threshold for evaluating charitable use. We may not annex new provisions or add conditions to the language of a statute.”

The wife of Chicago Alderman Ed Burke is, of course, a Democrat.

She “also disagree(d) with the plurality’s conclusion that Provena Hospitals was ‘required to demonstrate that its use of the property helped alleviate the financial burdens faced by the county or at least one of the other entities supported by the county’s taxpayers.’”


Looks Like Hospital Costs Could Be Going Up — 5 Comments

  1. Next step should be remove exemption from paying real estate taxes for churches.

  2. The court found they “gave back’ less than 1% of their income. I give more than 1% to charity- can I get a tax exemption?

  3. Joe’s comments says it all. Charity (free or reduced-rate care through the hospital’s charity program)… was worth just 0.7 percent of the hospital’s revenue for 2002, the first year subject to the questioned non-profit status.

  4. Joe and Billy you touch on an excellent subject.. Charity as it relates to hospitals. Please consider “Charitable” donations to the ‘cancer’ centers around the nation. Each hospital has a division dedicated to the specific mission of ‘housing’ for patients or family members. If you can give directly to that account it would be a blessing.

    Although you will never see it, you will have provided a cancer patient or family member with a place to stay while obtaining treatment. When I was ill, I had to travel back and forth the Houston, Texas to MDAnderson Cancer Center. Airfare, lodging when I wasn’t an inpatient for four months, and food. For two full years I was going back and forth from New York to Houston, Miami to Houston, and so forth.

    It reaches a ‘breaking point’ for all families and when I found the Hospital had a, for lack of a better term, ‘travel division’ that helped pay for outside lodging for patients, I can’t tell you how much this helped.

    The day will come, when those who have never been sick or injured in an accident, will unfortunately find themselves falling victim to a very broken health care system in this country. The services we enjoy via our great doctors and nurses and hospitals, need to be accessible to everybody.

    One heart attack, one stroke, one cancer, can and will wipe you out I guarantee it. Somehow, we all need to pull together and find away out of this. Politics cannot play any role in this issue.

    I’ve received medical treatment in several foreign countries and never had to pay a dime………and the treatment was excellent. Although I’ve received the best care money can buy, its bankrupted me 3 times. Don’t think it can’t and won’t happen to you. I pray it doesn’t and I pray our legislators don’t pass the absolutely worthless health care bill presently on the table.

    Thank you. Great article Cal! As always your providing a service.

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