Quinn pulls plug on moratorium
The fight continues between Illinois hospitals and government.
Illinois tax officials have nonprofit hospitals back in the cross-hairs following Gov. Pat Quinn's decision this past week to lift his moratorium on the state's review of their tax-exemption requests.
Whether he's playing political hardball or has washed his hands of the issue remains to be seen. But Quinn is upping the ante in a long-running dispute over local tax districts levying property taxes on nonprofit hospitals, a dispute he hoped would be resolved by now.
The case stems from Provena Covenant Hospital's fight with the Champaign County Board of Review and the Illinois Department of Revenue, a battle that went all the way to the Illinois Supreme Court.
The high court ruled Provena was required to pay property taxes because it did not provide a sufficient amount of charity care to meet the Illinois Constitution's unspecified requirements for a tax exemption.
Provena's loss proved a disaster for hospitals across Illinois. The revenue department subsequently put two Chicago-area hospitals and Decatur Memorial Hospital on its property tax hit list and had tentatively identified 19 more hospitals statewide for similar efforts when Quinn announced a moratorium on the issue.
But Quinn set a March 1 deadline for the Illinois Hospital Association and representatives of his office, the revenue department and Attorney General Lisa Madigan to propose a solution.
The dispute now moves to the Legislature, which already has its hands full with difficult budget issues. The hospital association has persuaded state Sen. James Clayborn, D-East St. Louis, to sponsor legislation that expands the definition of charity care to include not only free care but discounted care it provides to Medicare and Medicaid patients and revenue it writes off from patients who don't pay their bills.
Hospital critics, including Attorney General Madigan, want to force hospitals to pledge a percentage of their total revenue — some have suggested as much as 6 percent — on charitable care. Hospital supporters say that would put many hospitals already operating on narrow margins out of business.
The Legislature has no choice but to address this issue because the alternative is years of costly and fruitless legal wrangling over individual hospitals' requests for an exemption from paying property taxes.
The problem is that the Illinois Constitution mandates charity care, but not how much, in exchange for a property tax exemption. No guidelines mean regulatory chaos, and that's why Supreme Court Justice Lloyd Karmeier, writing the court's opinion against Provena, invited legislators to put specifics into the vague constitutional admonition.
This issue represents a two-edged sword for the public. Taxing districts might benefit from additional revenues, but higher costs — and taxes are costs — will serve only to drive medical costs even higher.
Aside from that, however, legislators have a duty to provide clarity where current law offers only confusion. Trying to apply a vague constitutional mandate to different hospitals, different levels and different types of uncompensated medical care is a fool's errand.
Common sense requires specificity. It also requires the opposing parties to negotiate a solution that's somewhere in the middle of where they are now.
This is a hideously complicated issue involving an extremely important public issue — medical care. The parties' failure to reach an accord by the March 1 deadline is a huge disappointment. This stalemate cannot continue.