Provena ruling could affect Illinois not-for-profits
Illinois hospital leaders may feel the ground trembling. A new ruling by the Illinois Supreme Court suggests notfor-profit hospitals could have to pay local taxes on that turf beneath their feet. The court last week upheld the state’s decision to strip the property-tax exemption from 202-bed Provena Covenant Medical Center because it wasn’t using the land exclusively for charitable purposes.
The Urbana, Ill., hospital’s seven-year dispute drew national attention and paralleled a broader debate about the definition of community benefit and how much of it justifies tax-exempt status. Sen. Chuck Grassley (R-Iowa), who has pushed to make hospitals prove they deserve the tax break, issued a statement saying that the Provena case shows “there is often no discernible difference between the operations of taxable and taxexempt hospitals.”
The healthcare reform bill that could soon become law would require expansive reporting from hospitals on their finances and charitable activities, periodic reviews of hospitals’ worthiness and a $50,000 tax imposed on hospitals that are deemed to have failed.
Deaton: Hospitals will be “shocked and alarmed.”