The case involves Provena Covenant Medical Center in Urbana, Ill., which was involved in a disagreement with the local tax review board in 2002 and then the Illinois Department of Revenue. According to the report, Provena Covenant’s revenues in 2002 exceed $113 million, but the hospital provided only $831,724 in charity care, around 0.7 percent of its total revenue. The hospital requested a $1.1 million property tax exemption and was required to prove its primary purpose was to provide charity care.
An initial court ruling allowed Provena Covenant to keep its tax-exempt status, but a decision in District Court last year required the hospital to pay $5 million, which has since been refunded as part of the appeals process, according to the report. Illinois District Attorney Lisa Madigan stated that the hospital concealed its charity care from patients and submitted many of these unpaid claims to debt collections.
The Illinois Supreme Court will be asked to decide if charity care includes unpaid medical bills or simply free care provided by the hospital. According to the report, a decision by the court could impact other areas of tax exemption for non-profit hospitals across the country, including income tax exemption and tax-exempt bonding for capital improvements.
Read the Independent’s report about Illinois’ non-profit hospital tax-exemption trial.
