Three Illinois Hospitals Stripped Of Property Tax Exemption

CHICAGO (CBS) — Three Illinois hospitals have been told they’ll have to start paying property taxes, but the hospitals warn the move will affect everyone’s health care.

Northwestern Memorial Hospital’s Prentice Women’s Hospital, Edward Hospital in Naperville and Decatur Memorial Hospital have been told they are losing the property tax exemptions granted to non-profit hospitals because their facilities operate more like businesses than charities.

As CBS 2’s Suzanne Le Mignot reports, the state’s Revenue Department said they’re not doing enough charity work, so now they’ll have to pay property taxes. The department also is reviewing property tax exemption applications from 15 other hospitals.

The Illinois Constitution exempts any places used exclusively for charitable purposes from paying property tax.

But the Illinois Department of Revenue said that the three hospitals weren’t doing enough free or discounted treatment of the poor to qualify for the exemption.

The Illinois Hospital Association saw things differently.

“It’s not good for patients. It’s not good for our communities. There’s nothing positive about this,” said IHA President Maryjane Wurth

Wurth said the denial of property tax exemptions for Prentice, Edward and Decatur Memorial hospitals could mean big changes for their patients.

“Northwestern Memorial serves the highest number of Medicaid moms that deliver babies in the entire state and we, frankly, think these are essential community benefits that need to be preserved,” Wurth said. “We fear and worry that this will mean that there will be less community services, less ability to help with prevention and primary care services, less access to care – because these hospitals reinvest and provide essential community assets and services to patients.”

Nick Danos said he’s received valuable care at Edward Hospital here in Naperville.

“Edward Hospital pours in so much money into the community,” he said. “They do so much for the town, they do pro bono work.”

The Illinois Department of Revenue said the three hospitals operate more like a business than a charity. Patients are treated for a fee, not for free, therefore they should pay property tax.

“I think it’s unfortunate, because Edward is one of the premier hospitals in the state and I’ve gone there personally with my children and I’ve always been very pleased with their care, so if that were to happen I’d be very disappointed,” Naperville resident Denise Newman said.

The hospitals can appeal the decision and ask for a review by the courts.

Northwestern officials said they will review all of their options.

“We are disappointed by, and disagree with, the Illinois Department of Revenue’s decision to deny Northwestern’s Prentice Women Hospital its property tax exemption,” officials said in a statement. “It is important to note that Prentice Women’s Hospital and its predecessor hospital, along with the land which was previously used by Wesley Memorial Hospital and Northwestern University has not been taxed for almost a century.”

Decatur Memorial Hospital and Edward Hospital officials said they planned to appeal the Revenue Department’s decision.

  • Rene Heybach

    Please report the other side of this story: talk to advocates who feel that these hospitals get big tax breaks in return for little “charity” in their communities. There is a Fair Care Coalition. You can contact Wayne Richard at 312-641-4140

  • Taxpayer 2

    Everyone and I truly mean everyone should pay property taxes period. If you own property then you should pay your share of property taxes. When you do not pay your property taxes you are breaking the law!

    • Blueviolets

      Are you willing to have the cost of care go up or services to be cut in order to pay those taxes? Take your choice because that is the one of two things that can happen. The third is that they may close their doors because no one can afford to go there.

      • Jim

        If you use the service you should pay for it. Property tax exceptions are subsidized by everyone paying into the system.

  • Ted Lind

    This is a really slippery area. Everyone knows the the only people who are charged the full amount for hospital procedures are those without Medicare, Health Insurance, etc. It is clear to me that the price medicare allows is still sufficient to allow the hospital to make money or they would not do it. I think many of these hospitals charge high prices so they can write them off for patients who can’t pay and then claim them as charity and get a tax write off. Some of thes hospitals are continuing to rapidly expand and build new facilities.

  • Ellu

    Just because Prentiice takes care of a large medicare population does man that they practice charity. If a patient can not pay their bill in full they end up sending it to collection to a collection company.

  • Kathleen

    The HUGE LIES about hospitals giving charity care has been an ongoing thing for some time now. It’s about time they either DO THE CHARITY or PAY UP THEIR TAXES like everyone else! IT’S CALLED “PUT UP OR SHUT UP”!

  • Thelma Corros

    tax it all no exemption

  • Citizen of Chicago

    Evebody MUST pay their fair share no matter who you are the days of free taxes and free water are over the Democrats have given away to much and now their’s nothing left to give away. The middle class people are tired of paying for everybody else’s free medical, schooling, housing and food. Years ago people worked and supported their families now it seems they look to the goverment to pay for everything! It has to stop

  • Bob from tech support, India

    They no longer have a reason to do any charity. This might increase profits.

  • Pat Quin

    To Citizen: Years ago they didn’t have e-verify so the illegals could hold down multiple jobs-now it’s harder for them to find work so they depend on these valuable services to take care of their families.

    You wouldn’t want to send them all back to Mexico now would you?

    Our democatic elect wants to keep as many people as possible tethered to the system-I’m sure they are trying to figure out how to allow these unfortunate people to legally vote.

  • bob

    Didn’t an official from Edward Hospital testify against Blago at his trial? Of all the hospitals out there this one is getting hit. Sounds like Democratic payback like the Clintons/Janet Reno did to Msoft for supporting the wrong party.

  • Chicago News Stories for Aug 17 2011 : Travel tips, hotels, restaurants, jobs and news | Travel 2 Chicago

    […] against a 27-year-old man who had been accused of shooting two Chicago police officers last month.Three Illinois Hospitals Stripped Of Property Tax ExemptionThree Illinois hospitals have been told they’ll have to start paying property taxes, but the […]

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    […] The Illinois Constitution exempts any places used exclusively for charitable purposes from paying property tax. But the Revenue Department said that the three hospitals weren’t doing enough free or discounted t… […]

  • notmd

    follow this scenario..

    hospital A does not invest in getting people covered into the medicaid program and uses software to make it easy to declare charity care..result high charity care writeoffs..less people with insurance..more use of the emergency room

    hospital B invests in staff and aggressively pursues coverage for the patient so they can see doctors and get prescriptions filled and be assigned a PCP..less charity care write offs..higher conversions to state program..people receiving the right care in the right location..

    which hospital is doing the right thing?

    by pushing hospitals to have higher charity care ,you are actually hurting the majority of the patients in their long term care care is not insurance and creates an incentive for patients not to be enrolled in a program..i thought we are trying to improve the quality of health care and reduce admissions?..

  • Rene Heybach

    We should not assume everyone has medicaid and thus can get on a “state program.” People who are underinsured or have medicaid cannot get charity care services.

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