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HMPRG's Janna Stansell quoted in Bloomberg News Article on Charity Care

Health & Medicine Policy Research Group (HMPRG)
June 5, 2012

Download the article from Bloomberg Post

Illinois Hospitals Escape Taxes With Big Dose of Lobbying

By Bob Kazel - Jun 1, 2012

The Illinois Hospital Association took no chances as state lawmakers debated in recent weeks whether nonprofit hospitals should pay property taxes. It unleashed a self-described media blitz.

“My baby is sick -- anyone help, please!” screamed an actress portraying a mother in radio ads aired in Chicago and 41 other markets starting in early May. A baby wailed, an ambulance siren blared and a voiceover asked what the terrified parent would do if no hospital were around.

The blitz worked. The Illinois General Assembly this week handed hospitals a long-sought victory: a sweeping legislative antidote to a recent state Supreme Court decision that threatened to slap many hospitals with potentially millions of dollars in tax liabilities just as they say they’re struggling to survive.

The victory in Illinois is significant because the state had become the most dramatic example of courts and regulators challenging the tax-exempt status of nonprofit hospitals. They’re doing so as local governments hunt for revenue to help plug budget gaps in a sputtering economy.

The Legislature preserved nonprofit hospitals’ tax-exempt status while expanding the official definition of the charity care they must provide to qualify for that exemption. Instead of just counting what they spend covering the bills of patients who can’t pay, hospitals could include such things as preventive- care community outreach and a portion of the costs of medical research, professional training and psychiatric care.

Quinn Signature

The office of Governor Pat Quinn has said he will sign the bill. Quinn, a Democrat, had earlier ordered his revenue department to reconsider the tax-exempt status of several hospitals. Under the legislation, hospitals must annually show that they would pay the same or less in property taxes than they donate to the community as charity.

Community and consumer advocacy groups are reeling from the Illinois vote, which they said will remove hospitals’ motivation to increase free care for the poor.

“They kowtowed to the IHA,” said Diane Limas, a spokeswoman for the Albany Park Neighborhood Council, a citizens organization on Chicago’s north side. “I don’t understand the horse trading that goes on in Springfield. But it’s clear that the legislators don’t know what happens when a patient is smacked with a $100,000 hospital bill and is already struggling to make ends meet.”

Online Petition

The association, representing about 200 hospitals and health systems, urged Illinoisans to write to state officials. By this week, the IHA reported, more than 12,000 people had signed an online petition. The group created templates for member hospitals to customize anti-tax e-mails to legislators and letters to local newspaper editors. And it suggested members provide kiosks or special computers for workers to send notes condemning property taxes for hospitals and Quinn’s proposed $2.7 billion in reductions to projected Medicaid payments.

The governor had previously ordered his revenue department to review hospitals’ tax-exempt status. He is expected to sign the legislation, though, because it includes a $1-a-pack boost in the cigarette tax that will help rescue the state’s Medicaid program by raising about $350 million a year.

Some consumer groups said the outcome -- approved on a largely party-line vote by the Democratic-controlled Legislature -- reflected the money spent by the hospital association on advertising and campaign contributions.

Political Contributions

For 2011 and the first quarter of 2012, the association contributed about $397,000 to state office holders, candidates and the state Democratic Party, according to the Illinois Campaign for Political Reform, a watchdog group. That included $143,000 to legislative leaders of both parties and $198,000 to other lawmakers in the General Assembly.

“They completely out-resourced us as patient advocates,” said Janna Stansell, senior policy analyst at the Health & Medicine Policy Research Group, an Illinois nonprofit agency that pushes for health-care equality.  Read the full article.