Excerpts from the Illinois Supreme Court majority opinion (written by Justice Lloyd Karmeier) affirming the decision of the 4th District Appellate Court on the denial of a property tax exemption for Provena Covenant Medical Center:

"During 2002, the amount of aid provided by Provena Hospitals to PCMC (Provena Covenant Medical Center) patients under the facility's charity care program was modest. The hospital waived $1,758,940 in charges, representing an actual cost to it of only $831,724. This was equivalent to only 0.723 percent of PCMC's revenues for that year and was $268,276 less than the $1.1 million in tax benefits which Provena stood to receive if its claim for a property tax exemption were granted."

"The Director (of the Illinois Department of Revenue) correctly points out that PCMC subcontracted many of its operations to third-party providers, including pharmacy, laboratory, laundry and MRI/CT services, the entire emergency department and the management, administration and staffing of rehabilitation and cardiovascular surgery programs. One of those third-party providers, the one which furnished lab services to PCMC, was actually owned by Provena Health, Provena Hospital's parent, and was operated on a for-profit basis. ... No evidence was presented that any of them were themselves charities or operated on anything other than a for-profit basis."

"With very limited exception, the (Provena) property was devoted to the care and treatment of patients in exchange for compensation through private insurance, Medicare and Medicaid or direct payment from the patient or the patient's family."

"To be sure, Provena Hospitals did not condition the receipt of care on a patient's financial circumstances. Treatment was offered to all who requested it and no one was turned away by PCMC based on their inability to demonstrate how the costs of their care would be covered. The record showed, however, that during the period in question here, Provena Hospitals did not advertise the availability of charitable care at PCMC. ... As a practical matter, there was little distinguishing the way in which Provena Hospitals dispensed its 'charity' from the way in which a for-profit institution would write off bad debt."

"If Provena Hospitals were truly using the PCMC complex exclusively for charitable purposes, one would therefore expect to see a significant portion of its annual admissions served by Provena Hospitals' charitable care policy. Instead, as we have noted, a mere 302 of its 110,000 admissions received reductions in their bills based on charitable considerations.

"Uninsured patients were charged PCMC's 'established rates,' which were more than double the actual costs of care. When patients were granted discounts at the 25 percent and 50 percent levels, the hospital was therefore still able to generate a surplus."

Provena Hospitals' decision to make charitable contributions to other not-for-profit entities does not demonstrate an exclusively charitable use of the PCMC complex."

"Of the 43 real estate parcels involved in this (case), the four utilized by the Crisis Nursery may have the strongest claim on being used exclusively for charitable purposes. Even if we assume an exclusive charitable use to have been established, however, it would not aid Provena Hospitals' position."

• The entire Supreme Court opinion is here, in pdf format.
• The appellate ruling is here, also in pdf format.