In a closely watched case, Illinois’ highest court Thursday determined that a not-for-profit hospital had to pay property taxes, because it didn’t offer enough charity care to qualify for a tax exemption.
The decision is the culmination of a five-year fight over whether Provena Covenant Medical Center, a Catholic hospital in Urbana, provided enough of a benefit to the community to justify the tax break. Provena came under scrutiny by state regulators for its aggressive collection policies, especially toward uninsured patients.
“The record showed, however, that during the period in question here, Provena Hospitals did not advertise the availability of charitable care at PCMC. Patients were billed as a matter of course, and unpaid bills were automatically referred to collection agencies,” Justice Lloyd Karmeier wrote for the court.
“As a practical matter, there was little to distinguish the way in which Provena Hospitals dispensed its ‘charity’ from the way in which a for-profit institution would write off bad debt,” he added.
However, two of the seven justices recused themselves, and the remaining vote was 3-2. This split may minimize the impact of the decision.