The Illinois Supreme Court will rule on whether a state law that allows tax exemption for nonprofit hospitals is constitutional, according to a Chicago Tribune report.
Here are five things to know:
1. The case centers on a 2012 Illinois law that states nonprofit hospitals in Illinois are property tax-exempt if the value of their qualifying charitable services and activities is at least the same as the tax amount they would pay in property taxes if they weren't exempt, reports the State Journal-Register. Qualifying services and activities could include charity care or subsidies to help pay for care provided to poor individuals.
2. A Cook County woman, Constance Oswald, is challenging the law. Chicago attorney Kenneth Flaxman told state Supreme Court justices May 22 on behalf of Ms. Oswald that the 2012 Illinois law violates state constitutional requirements because language from the law apparently replaces the state constitution's charitable requirement and previous court rulings, according to the SJR. "There's no hook in this statute that says a constitutional test should be applied," he said.
3. While some contend there should not be property tax exemptions for nonprofit hospitals because their operations are similar to businesses, others, including the Illinois Health and Hospital Association, maintain exemptions are important for these facilities, according to the Tribune.
Mark Deaton, general counsel for the IHA said in the Tribune report: "Tax exemption is one way to ensure that hospitals have all their resources available to provide healthcare for individuals."
4. The Illinois Supreme Court has heard at least one other case on the issue in recent years. In a previous case, which focused on one facility — Carle Foundation Hospital in Urbana — the court did not rule on the 2012 law's constitutionality, but rather vacated an appellate court's ruling, and sent the Carle case back to the Cook County Circuit Court, according to the Tribune.
5. The Carle case is pending. A ruling on Ms. Oswald's case, which focuses on property tax exemptions for all hospitals, is expected this fall, reports the SJR. A ruling against hospitals could affect Memorial Medical Center and HSHS St. John's Hospital, both in Springfield, as well as hospitals in Jacksonville and Lincoln, among other places.
More articles on healthcare finance:
Fair Health to add to suite of charge benchmarks
NYC Health + Hospitals launches coder training focused on reimbursement: 6 things to know
Study: Few physicians prepared for value-based care