Chicago Area Hospitals Prepare for Rulings on Tax-Exempt Status

Several large Chicago-area hospitals have requested decisions from the Illinois Department of Revenue on the tax-exempt status of several new construction and expansion projects, in light of the state Supreme Court's ruling to withdraw Urbana, Ill.'s Provena Covenant Medical Center's status for failing to provide sufficient charity care, according to a report in Crain's Chicago Business.

The hospitals, including Northwestern Memorial and Children's Memorial, are the first of a large number of Chicago hospitals to apply for new property tax exemption due to changes in ownership or major upgrades, according to the report. A 2007 Cook County report indicated that if all 54 of the region's major private, non-profit hospitals lost their exempt status, they could pay up to $241 million in annual property taxes.

The state will most likely use charity care to decide a hospital's status. Children's Memorial, for example, which provided less charity care than Provena, has noted that the difference is due to the fact that very few children don't have insurance, so fewer families apply for charity care, according to the report. Illinois has no state requirement for a minimum amount of charity care needed to maintain tax-exempt status.

Read the Crain's report on Chicago hospitals' charity care.