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News :: Health |
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Another Hospital Accountability Victory? |
Current rating: 0 |
by Z.A. Abonn
Email: ritri29tn (nospam) aol.com (unverified!) |
20 Feb 2004
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While another hospital accountability story in the News Gazette, on Carle Foundation Hospital's tax-exempt status appeared today, this is not a time either for CCHCC nor for Claudia Lennhoff, or CCHCC's 6,000 members for celebration--their work has just began; defending these victories may prove much more costly than anyone has ever anticipated. Corporations and their allies are way bigger than CCHCC and its talented staff, and one day they may destroy CCHCC and all it stands. So, the question is: what does the community doing to ensure the vitality, energy, commitment, dedication, and all around most humane work done by CCHCC and its staff? |
FRIDAY, FEBRUARY 20, 2004
CHAMPAIGN, ILLINOIS
Carle hospital will face review on tax status
By MIKE MONSON
© 2004 THE NEWS-GAZETTE
Published Online February 20, 2004
URBANA – While a recent decision by the state to revoke Provena Covenant Medical Center's property tax-exempt status reverberates nationally, Carle Foundation Hospital in Urbana will undergo similar scrutiny.
Carle Foundation and Cunningham Township officials said Thursday that the main block of Carle Foundation Hospital, the complex of buildings located north of University Avenue, will be reassessed next month by the Cunningham Township assessor's office. The entire block of property will then be placed on the tax rolls, including portions of the buildings used by the hospital, which is currently property-tax exempt.
From there, Carle almost certainly will apply for a property tax exemption for parts of the building used by the hospital. The current split of use between the taxable Carle Clinic and the tax-exempt hospital would then be determined by the Illinois Department of Revenue.
Joanne Chester, Cunningham Township assessor, said she was asked to reassess the Carle property last year by the Department of Revenue.
"The Department of Revenue told us they need to determine themselves what was hospital use and what was clinic use, as opposed to my determining it," said Chester. "It came up this past summer or fall, during discussions about Covenant's tax-exempt status. We don't keep records on the value of exempt property. We have to go put a value on it."
Carle's reassessment could raise many of the same issues that were raised in the Covenant case, where the Catholic hospital was determined not to be a charitable organization and all of its parcels of property were denied the tax-exempt status they have enjoyed for years.
The Champaign County Board of Review, a three-member body, would make a recommendation on any Carle application.
The Board of Review, in Covenant's case, put forward a strong case arguing that Covenant did not deserve its charitable designation. The board argued Covenant filed lawsuits and used other aggressive debt-collection practices against patients who did not pay their bills, and that the hospital hired outside for-profit medical firms to perform many key hospital functions, such as staffing the emergency room.
Dan Stebbins, a board of review member, said current case law holds that a charitable exemption for a hospital should be denied unless "charity care is their primary purpose."
Carle retained tax-exempt status for a handful of properties, including a few parking lots, in a case heard last year by the state.
In Covenant's case, a five-member administrative review group with the Department of Revenue revoked Covenant's tax-exempt status this month.
"Provena had not proved to us, as is their obligation, that they were operating in a charitable manner," said Department of Revenue spokesman Mike Klemens.
Provena officials appeared stunned by the ruling, with President and Chief Executive Officer Mark Wiener issuing an emotional news release:
"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," Wiener said.
Covenant officials have indicated they will appeal the decision within the next 60 days and seek a hearing before an administrative law judge. If the ruling stands, Covenant will owe $1.1 million in property taxes that were payable last year.
Covenant lost $700,000 in 2003, according to hospital officials.
Dr. James Leonard, Carle Foundation's president and chief executive officer, said Thursday that the Covenant ruling, if it stands, has troubling implications for the hospital industry.
"We're very concerned ... it would spread across the country very rapidly as different communities tried to increase their revenues," he said. "If this happens, there will be a domino effect across the country. If hospitals are in the red, they will close."
Safety-net hospitals, institutions like Cook County Hospital, could see themselves overwhelmed with patients if other hospitals close, Leonard said.
Leonard said Carle made a profit last year, but is putting the money back into the institution, including a $50 million expansion that will add five new floors to the hospital.
Carle on Thursday also announced it was expanding its community care program guidelines, enabling families with incomes up to 150 percent of federal poverty guidelines to qualify for free care and those with incomes of up to 250 percent of poverty guidelines to qualify for reduced charges on a sliding scale.
Meanwhile, a health care advocate who had been one of Covenant's biggest critics said Thursday that the hospital has made "a 180 degree turn for the better" in recent months.
"In terms of charity care and debt collection practices, it's been a 180 degree turn for the better," said Claudia Lennhoff, executive director of Champaign County Health Care Consumers.
She said she was pleased to hear about Carle's more generous standards for charity care, but that, up until Thursday, she believes Covenant had the superior charity care program.
Lennhoff also said that while Covenant has dropped the practice of using "body attachments," the legal term for the arrest of debtors who fail to show up in court, Carle officials are still reserving the right to use the legal device.
Carle officials confirmed that. Leonard said Carle hasn't used a body attachment for the past eight months – but still reserves the right to do so.
A three-member committee, made up of a nurse, a social worker and a lay person, would review the particulars of a case before Carle would go foward and seek a body attachment in court, said Leonard. The committee has yet to meet, he added.
Tax burden may shut down some facilities
State and national hospital officials said the state of Illinois' decision to revoke Provena Covenant Medical Center's property-tax-exempt status could have a negative impact on hospitals across the country.
Illinois' 210 hospitals provided more than $2 billion in uncompensated health care last year for the growing numbers of uninsured and underinsured patients, said Howard Peters, senior vice president of governmental relations for the Illinois Hospital Association.
To ask not-for-profit hospitals to also shoulder huge property tax bills is likely to lead many institutions to close their doors, he said.
"Hospitals have a mission to provide health care service 24 hours a day, 7 days a week, and often they have to provide that service to people who cannot afford to pay," Peters said. "When you consider the number of hospitals operating at a loss, this is a decision that is fraught with nothing but disaster.
"This is an important issue," he continued. "This could become basic to the question of 'Can hospitals in Illinois survive and continue to serve their communities?'"
Rick Wade, senior vice president of the American Hospital Association in Chicago, said that of the 4,800 hospitals nationally, 85 percent are not-for-profit and generally don't pay property taxes.
Out of all those hospitals, one-third are operating at a loss, one-third are getting by on thin margins and one-third are solidly profitable, he said.
"A hospital is a vital part of the community infrastructure and it is in the general interest of the community that it be as strong as it can be and invest in medical technology," he said. "The forgoing of property taxes was the community's way of investing in a vital resource. They deliver a service that the community could not do without."
Wade said state and local officials should seriously consider the potential negative impact of levying property taxes on not-for-profit hospitals.
"It's not something a government should do lightly," he said. |
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