Officials at Provena Covenant Medical Center are seeking an Illinois Supreme Court review of a ruling by a state's appellate court which reversed an earlier order to restore the religious and charitable property tax exemption of the hospital.
The three-judge 4th District Appellate Court panel in Springfield, Ill., last month reversed a Circuit Court decision that lets the hospital keep its tax-exempt status.
The appellate court justices agreed with Illinois Department of Revenue Director Brian Hamer, who ruled two years ago that Provena Covenant's charity care was not enough to justify an exemption. In 2002, Hamer claimed that Provena Covenant's charity care was less than 1 percent of its revenue.
The medical center announced that its petition for "leave to appeal" would be filed by the end of September.
"The Appellate Court opinion runs counter to the law, facts and evidence of our case, but also unfairly impugns the proud history of charitable and religious mission service by Provena Covenant Medical Center," said Jon "Cody" Sokolski, chairman of the board of directors of Provena Covenant. "The ruling also impacts on the very ability of our hospital to continue caring for all regardless of their ability to pay. It flies in the face of our charitable history and reputation and disregards the undisputed fact that Provena provides unlimited charity care to all in need as well as other valuable charitable contributions to the Urbana-Champaign community."
Provena Covenant Medical Center is part of Provena Health, a Catholic health system that includes six hospitals, 16 long-term care and senior residential facilities and numerous clinics, home health agencies and other health-related activities operating in Illinois and Indiana.
Officials at the medical center and Provena Health strongly contested the state's assertion that they do not provide enough charity care to warrant a tax exemption.
Fr. William Grogan, system director of ethics for Provena Health, said Provena Covenant has had religious sponsorship from its very beginnings and a commitment to caring for all regardless of their financial condition. He said the hospital has contributed millions of dollars in charity and charitable benefits to the community on an annual basis, including during years when Provena Covenant has suffered operating losses.
Grogan cited more than $21 million in charity care and other community benefits that Provena Covenant provided in 2008, including unlimited free care to the poor and underserved as well as other non-reimbursed Medicaid costs and community services.
"The denial of recognition as a charitable institution and lack of charitable and religious property tax exemption to Provena Covenant is not only unjust, it reflects a fundamental error in reason and judgment," said Grogan. "The ruling prolongs a crisis for Provena Covenant and for non-profit hospitals in Illinois and across the nation. Community hospitals that care for the uninsured, Medicaid-insured and indigent populations are in need of property tax exemption and other support in order to continue their missions of providing free care to all who need and seek help."
As Grogan suggests, the Provena Covenant case is being watched closely by hospitals nationwide. Some state and federal lawmakers have attacked non-profit hospital tax exemptions, questioning whether some healthcare facilities are providing enough charity care.
"If this decision is allowed to stand, it will send a chilling message that compliance with the process recognized under the laws of Illinois for over 100 years has been abandoned in favor of some unknown new standard that ignores the true nature and extent of hospitals' charitable contributions to their served communities," Grogan said.
The Illinois Supreme Court's decision will likely influence how non-profit hospitals around the nation deal with the bills of uninsured Americans.
"Forcing non-profit hospitals to pay property taxes takes millions of dollars away from the ability of a hospital to provide free and other patient care." said Sokolski. "That is bad public policy and an atrocious decision that risks the ability of the Champaign/Urbana community to continue to have the immense benefits provided by Provena Covenant."
Who do you think is right in this particular case? Should Provena lose their non-profit status? Do non-profit hospitals not provide enough charity care? Send your comments to Richard Pizzi at richard.pizzi@medtechpublishing.com.