BUSINESS

Hospital groups join legal battle for tax exemption

The American Hospital Assn. is among those participating, for fear that a case in Illinois could become a bellwether against nonprofit hospitals.

By Katherine Vogt, AMNews staff. March 14, 2005.

National and local hospital groups are going to bat for an Illinois hospital that is fighting to reclaim its tax-exempt status, arguing that the outcome of the case could affect health care access nationwide.

Five hospital groups, including the American Hospital Assn. and the Catholic Health Assn. of the United States, filed a court brief supporting the hospital in its legal battle and saying the case could be a template for others nationwide.

"Denying Provena Covenant [Medical Center] its property tax exemption potentially brings into question the exempt status of nearly every Illinois nonprofit hospital. The resulting financial drain on those hospitals if their tax exemptions, too, subsequently were revoked would seriously jeopardize access to quality hospital services for every Illinois resident," the brief said. "The rationale applied in this case will likely influence the views of local and state taxing authorities throughout the nation."

The groups announced their involvement Feb. 15, nearly two months after the case was tried before an administrative law judge. Provena, a nonprofit, 270-bed acute care hospital serving the Champaign-Urbana area, had gone to court to appeal a February 2004 decision by the state Dept. of Revenue to yank its charitable property tax exemption. A ruling is expected after April 1.

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