Provena Covenant takes tax exemption fight to Ill. Supreme Court

By this point, most healthcare executives are familiar with the story of Provena Covenant Medical Center, an Urbana, Ill.-based non-profit hospital that lost its state property tax exemption when officials concluded it was providing far too little charity care. The latest news in the case comes this week, as Provena takes its case to the state's Supreme Court.

State officials claimed that in 2002, the year before Provena lost its tax exemption, it allocated less than 1 percent of its revenue to charity services, a level they said was not sufficient to justify Provena's tax-free status. Since then, Provena has been fighting to get its tax exemption back, vigorously disputing the claim that it wasn't meeting its community obligations.

According to Illinois Assistant Attorney General Evan Siegel, 302 patients were given free or discounted care in 2002, out of more than 100,000 admissions. Their care came at a cost to the hospital of $831,724, or about 0.7 percent of its $113 million in 2002 revenue, Siegel told the court. The justices, for their part, raised questions over what level of charity care Siegel's office thought Provena should have provided.

Ultimately, Provena is in something of a no-win situation. Since there's no real standard for provision of charity care as of yet, Provena can't point to a hard-and-fast rule to protect itself, and given the numbers involved, it's pretty easy for the state to paint the hospital as a bad actor. If I were a Provena exec, I wouldn't be optimistic.

To learn more about this case:
- read this Chicago Tribune item

Related Articles:
Provena Covenant's tax exemption in jeopardy again
IL hospital loses high-profile tax case
AHA files brief in favor of Provena

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