CHICAGO - Provena Health by the end of the month will petition the Illinois Supreme Court to review an appellate court opinion stripping one of the Mokena, Ill.-based system's hospitals of its property tax exemption.
The decision from the 4th District Appellate Court of Illinois issued late last month reversed a lower court decision that had returned Provena's Champaign hospital Provena Covenant Medical Center's tax-exemption after the state Department of Revenue removed it.
"The appellate court opinion runs counter to the law, facts, and evidence of our case, but also unfairly impugns the proud history of charitable and religious mission service by Provena Covenant Medical Center," Jon "Cody" Sokolski, chairman of the hospital's board of directors, said in a statement. "The ruling also impacts on the very ability of our hospital to continue caring for all regardless of their ability to pay. We expect to be allowed to vigorously appeal this decision before the Illinois Supreme Court."
The Illinois Department of Revenue formally acted to strip the property tax exemption two years ago after finding that the hospital failed to meet state requirements that govern charitable and religious organizations because it provided less than 1% of its revenues for charity care. Provena countered the state's argument, asserting that it provided other community benefits and that state law does not define charity by percentages of care.
Provena took its appeal to the courts and prevailed at the circuit court level in Sangamon County, winning the return of $5 million in property taxes paid by Provena since the state's action. The appellate opinion reversed that decision.
Health care market participants have called the case significant because not-for-profit hospitals face growing scrutiny to justify their tax-exempt perks - from their exemptions to certain taxes to their ability to access the tax-exempt bond market - at the local, state, and national levels.
Provena Covenant Medical Center provided more than $21 million in charity care and other community benefits in 2008, including unlimited free care to the poor and underserved as well as other, non-reimbursed Medicaid costs and community services, according to the statement.
