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Monday, March 22, 2010

Illinois Supreme Court Rules on Provena

A couple weeks back, I did a piece on the state of non profits in America. Central to that story is the situation surrounding Provena Health Care. They're a non profit hospital system mostly in central Illinois but also in parts of the Chicagoland area as well. That hospital system experienced a significant amount of growth all while nearly providing no care to the area's poor. In fact, providing so called charity care is vital to qualifying for non profit status. As such, the Illinois Department of Revenue challenged Provena's tax exempt status. The case was still awaiting a ruling from the Illinois Supreme Court when I wrote that piece. That has since been decided.

The Illinois Supreme Court says Champaign-based Provena Covenant Medical Center didn't provide enough charity services to be exempt from property taxes.

The Supreme Court on Thursday upheld a lower court ruling that supported the Illinois Department of Revenue's claim that the medical center couldn't avoid property taxes as a charitable institution.

Here's how Heather O'Donnell of the Center for Tax and Budget Accountability explained the decision.

The Court clarified that charity care is the standard in Illinois for property tax exemption. Bad debt, Medicaid and Medicare shortfalls and other community benefits do not constitute charity for purposes of the local tax break. Still no clarity on how much charity is enough. The Court kicked that issue to the legislature.

So, the court ruled exactly what is charity care but it didn't rule just how much charity care a hospital must provide to still be a non profit.

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