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Chicago Tribune Article - Hospitals & State Not Likely to Make Thursday Deadline on Charity Care Exemptions

Health & Medicine Policy Research Group (HMPRG)
February 28, 2012

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Hospitals, state unlikely to make Thursday deadline on charity-care tax-exemption talks

Sources say parties divided on key issues, but progress being made; stakeholders from Illinois Hospital Association, Gov. Quinn's office, Department of Revenue, others plan last-ditch meeting Wednesday

By Peter Frost, Chicago Tribune reporter

February 28, 2012

Just days before a March 1 deadline to devise a formula for measuring how much free health care hospitals must provide in order to qualify for tax breaks, hospital and state officials remain divided on several key issues.

While the talks have been productive and are progressing, sources close to the negotiations say it is increasingly unlikely the parties will come to terms on the new rules before the Thursday deadline set by Gov. Pat Quinn.

Stakeholders, including the Illinois Hospital Association, representatives from the governor's office, the state Department of Revenue and other groups, have been meeting for months to draft new rules. They are scheduled to meet Wednesday in a last-ditch effort to resolve the issues prior to the deadline, said one source familiar with the talks.

But in a conference call with hospital leaders Friday, the hospital association told participants that it was "99 percent sure" a deal wouldn't be struck by Thursday, said two other sources.

Quinn called for the meetings in October at the same time he announced the state would temporarily hold off on further decisions about hospitals' exemptions from property taxes.

He set a March 1 deadline for recommendations with the goal of crafting legislation that would more clearly define what constitutes charity care, a measure by which the state determines whether nonprofit hospitals should qualify for property tax exemptions.

Illinois sent a chill through the nonprofit hospital world in August when it denied exemptions for three hospitals, contending they did not provide enough charity care to qualify. Those hospitals — Northwestern Memorial Hospital's Prentice Women's Hospital, Edward Hospital in Naperville and Decatur Memorial Hospital — disputed the assessment.

Hospital executives have since complained that the government's definition of charity care is too narrow and does not give hospitals enough credit for providing other community benefits, including donations to charitable health care organizations, education and outreach programs.

When Quinn announced the moratorium in October, at least 15 other evaluations were in the pipeline. If the state moved to revoke the tax-exempt statuses of those hospitals, they could be forced to pay millions in property taxes.

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