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News :: Health |
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Hospital Accountability Victory |
Current rating: 0 |
by ZA Abonn
Email: ritri29tn (nospam) aol.com (unverified!) |
18 Feb 2004
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URBANA β The Illinois Department of Revenue has ruled that Provena Covenant Medical Center in Urbana is not a tax-exempt charitable organization β a ruling that could force the hospital to pay $1.1 million annually in local property taxes. |
VIA NEWS GZT Wed 18, 2004. URBANA β The Illinois Department of Revenue has ruled that Provena Covenant Medical Center in Urbana is not a tax-exempt charitable organization β a ruling that could force the hospital to pay $1.1 million annually in local property taxes.
Champaign County and Provena officials confirmed the ruling was handed down on Friday.
Illinois Department of Revenue officials did not return telephone calls Tuesday.
But Mark S. Wiener, president and chief executive officer of Provena Covenant Medical Center, issued a statement Tuesday decrying the ruling.
"It is very disheartening to think that a Catholic hospital, such as Provena Covenant Medical Center, which provides almost $3 million in charity care, subsidizes Medicare/Medicaid shortfalls by the state to the tune of over $2 million annually, and provides $250,000 annually in unreimbursed services to the community, could be seen as a for-profit entity," he said.
Wiener described hospital officials as "very disappointed" and said Provena would take immediate steps to request a formal hearing to appeal the decision.
"We are, and fully expect to remain, a tax-exempt Catholic hospital," Wiener said. "This finding has local, state and national ramifications. This could alter the ability of health-care providers to offer their services to the communities and persons that need it most."
The case against Provena arose because the owner of a charitable institution must reapply for tax-exempt status when an ownership change takes place. Provena Health, based in Mokena, bought Covenant Medical Center in 1997, but didn't reapply for tax-exempt status until late in 2002.
The Champaign County Board of Review, on Jan. 30, 2003, recommended to the state that it deny tax-exempt status for Provena's Urbana properties, including the main hospital.
In a nine-page brief, the board of review argued that much of the area inside the hospital is used by outside, for-profit entities to generate personal or corporate profit.
The brief also questioned whether Provena Covenant provides charity care to all who need and apply for it, as case law requires. The brief cited the hospital's suing large numbers of patients for nonpayment of bills and its use of two collection agencies.
Both Provena Covenant and Carle Foundation Hospital's aggressive debt-collection practices, which resulted in the temporary jailing of some delinquent patients, were the subject of a lengthy, scathing article in The Wall Street Journal in November.
Board of Review member Stan Jenkins of Champaign said he wasn't surprised by the state decision.
"We recommended denial of tax-exempt status based on the use of the property and the ownership of the property," Jenkins said. "We feel they don't comply with the criteria the state sets out to qualify as tax-exempt or charitable."
Urbana Mayor Tod Satterthwaite said Tuesday he expects Provena Covenant to appeal the decision by the state.
"It's probably too early to count on that money in our budget," Satterthwaite said. "No matter where it goes, it's probably too early to spend it. I don't think we've heard the final decision on this."
As it stands now, the sole beneficiary of the $1.1 million in annual property taxes Provena Covenant might owe would be the city's tax increment financing District 3. The tax district would receive all the hospital's property tax income each year until the district expires in 2013.
City officials have previously indicated that they would probably share some of the Provena money with local taxing bodies, including the Urbana school district, if they ever receive it. |
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