Carle tax trial, Day 4: Former CFO outlines charity-care policies

Carle tax trial, Day 4: Former CFO outlines charity-care policies

URBANA — When the Carle Foundation was preparing to buy the former Carle Clinic, the foundation's former chief financial officer was working through the details of applying the nonprofit foundation's charity-care policies to what would become a merged health system.

One concern, Robert Tonkinson recalled, was the clinic's "no more service" policy in which people who didn't pay their bills were cut off from medical care from Carle Clinic.

His suggestion was finding a way to reinstate those patients who would have qualified under the charity-care policies of the nonprofit foundation and wipe away their clinic debt, he said.

Tonkinson, the Carle Foundation's CFO from 2002 until a month after the foundation bought the former Carle Clinic in 2010, was the second witness to be called in the trial of a lawsuit Carle filed against state and local taxing authorities over the loss of its charitable tax exemptions for eight years prior to 2012.

The trial got underway Jan. 2, and Judge Randy Rosenbaum said Monday that it's already running a half-day behind. Tonkinson's testimony isn't expected to be wrapped up until sometime Wednesday.

Tonkinson was questioned for several hours Monday by one of Carle's lawyers, Amy Doehring, about the foundation's evolving charity-care policies.

Carle has used the name "Community Care" for its charity-care program out of a concern that the use of the word "charity" in the name would discourage some financially eligible people from applying for free or discounted care, Tonkinson said.

He recalled a heightened awareness — both in Illinois and nationally — of a growing number of uninsured people in the early 2000s, and publicity about debt-collection practices on the part of local hospitals that prompted changes.

Carle began working with a community coalition to change its practices and broaden the reach of its charity care, Tonkinson said, and he regards that work as "the most satisfying professional thing I've ever done."

Carle ran ads promoting its charity-care policy, and it posted the policy on buses and at admissions desks, he said. Efforts picked up to identify patients who would qualify as early in the care process as possible, he said. Guidelines for eligibility for free or discounted care were broadened over the years, as was the length of charity-care application deadlines, he said.

In 2005, Tonkinson said, the Carle Foundation bumped the income limits at which people qualified for free care from 100 percent of the federal poverty level to 200 percent, "in recognition that we could do more for our community."

Carle began limiting its charity care to patients living in its primary and secondary service area in March 2010, Tonkinson said.

That was out of concern that patients living far outside East Central Illinois would come for free physician care once the former Carle Clinic was merged into the nonprofit foundation and also began offering charity care, he said.

Carle's lawsuit against the Illinois Department of Revenue, Champaign County, Urbana and Cunningham Township is seeking a restoration of tax exemptions for four of Carle's Urbana properties — Carle Foundation Hospital, the Caring Place day care center, the Carle power plant and the Carle north tower (now part of the main hospital) — for tax years 2004-11.

Carle is also seeking millions of dollars in refunds on the property taxes it paid during those years on the four properties, plus interest.