Provena Covenant Medical Center stands pat on tax refund

Provena Covenant Medical Center stands pat on tax refund

URBANA – Provena Covenant Medical Center's attorney says the hospital will hang onto the $6.1 million property-tax refund it received from Champaign County earlier this year – at least for now.

The county is demanding the money back after the 4th District Appellate Court last month came down against the hospital and overturned a 2007 circuit court decision that had found Covenant tax-exempt.

Patrick Coffey, Covenant's Chicago-based attorney, contends the county doesn't have a legal position to seek a return of the money, because the appellate court ruling will be on hold after the hospital files a petition seeking a review of the case by the Illinois Supreme Court.

That petition will be filed later this month, he said.

It may take the Supreme Court several months to decide if it will review the case, Coffey said. Meanwhile, Provena considers the 2006 circuit court ruling restoring Covenant's tax exemption to remain in effect.

Champaign County Treasurer Dan Welch said he'll have to consult with the outside legal counsel the county plans to hire to handle the potential Supreme Court review.

"My initial reaction was, 'What's the difference between them waiting for our appeal and us waiting for their appeal,'" he said, referring to the fact that Provena demanded and got a refund from the county while the circuit court ruling was under review by the appellate court.

"Hopefully, we'll respond fairly quickly," Welch added. "I just don't know what our stance is right now."

It's been more than five years since the conflict over Covenant's tax exemption began, with the Champaign County Board of Review revoking the exemption based on what it saw as uncharitable billing and collection practices on the part of the hospital for the 2002 tax year.

The Illinois Department of Revenue upheld that decision and has defended it through two levels of court proceedings, while other nonprofit hospitals in Illinois have lined up to support Covenant.

The Rev. William Grogan, director of ethics for Covenant's Catholic parent hospital system, Provena Health, said if he could give the appellate court a grade on its ruling on Covenant's exemption, it would be a D-plus. The court made "a glaring error" in failing to see the practice of Catholic faith in every step the hospital takes – from employee training and church oversight to providing care for every person who walks in the door, he said.

"Faith is in the bricks of those buildings," he added.

In its Aug. 27 ruling, the appellate court wrote: "Just because Covenant never turns a patient away because of the patient's inability to pay, it does not follow that Covenant thereby provides charity. If, despite the patient's inability to pay, the patient is contractually liable to reimburse Covenant for the medical treatment, Covenant has extended no charity to that patient."

The higher court also debunked the hospital's claim that it is a religious institution by writing: "We do not see how medical care resembles public worship, Sunday schools or religious instruction."

Coffey said the appellate decision wasn't a fair reading of the entire record of the case.

"The testimony in this case could not be more clear that Provena offered unlimited free care to everyone in need," he said.

As a longtime Champaign-Urbana resident, Covenant Board Chairman Jon "Cody" Sokolski said the whole issue has been a "huge disconnect" for him – between the Covenant he sees being charitable and religious every day and the one apparently seen by taxing authorities and the appellate court.

"It's like somebody saying your parents are not your parents," he added.

Grogan invited the court to do better research, and he also asked the courts and government officials to consider the potential consequences of making nonprofit hospitals pay millions of dollars in taxes while leaving them the last places in their communities where the poor can turn for medical care.

"The government can't play it both ways," he said.

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