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Illinois reviews 15 hospitals' tax-exempt status
In an even broader sweep of tax exemptions of nonprofit hospitals, the Illinois Department of Revenue will decide the fate of more than a dozen hospitals in the state and what the hospitals claim is charity care.
With a budget deficit of more than $11 billion, the state of Illinois is expanding its close scrutiny of so-called nonprofits beyond the three hospitals it denied last month for tax exemptions, reports Chicago News Cooperative. In August, the Illinois Department of Revenue decided to exclude Northwestern Memorial Hospital Prentice Women's Hospital in Chicago, Edward Hospital in Naperville, and Decatur Memorial Hospital from tax exemption, concluding the hospitals did not provide enough charity care. The hospitals, on the other hand, contended they provided free care and community benefits and needed the nonprofit status to continue to provide services for low-income patients without the burden of paying property taxes.
In the meantime, some of the hospitals awaiting decision on their tax status are holding off on facility construction, reports Bloomberg.
"We'll go out of business without it," said Midwest Medical Center CEO Tracy Bauer in the article about the tax-exempt status.
The Illinois ruling on the 15 hospitals is expected to be quite a challenge for the hospitals. In addition to last month's denial of Northwestern, Edward, and Decatur, the state in a 2010 landmark case denied Provena Covenant Medical Center tax exemption for failing to provide enough charity care to qualify as a charitable organization. Provena only provided free care to 302 out of 110,000 patients, according to the Bloomberg article.
The Illinois decision expected in the coming months could have repercussions elsewhere will similar tax-exempt hospitals.
In California, for instance, Mercy Medical Center CEO Mark Korth said if the hospital were to lose nonprofit status, it would translate into layoffs and cuts to its programs without the $1.33 million tax break, reports The Record Searchlight. Under parent company Catholic Healthcare West, Mercy serves as a safety-net hospital, providing $31.8 million in community charity care, according to the article.
For more information:
- read the Record Searchlight article
- read the Bloomberg article
- read the Chicago News Cooperative article
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