Catholic Hospital In Illinois May Lose Tax Exemption

An “uncharitable” Catholic hospital may lose its tax break for failing to provide enough free services.

A state appellate court said the hospital’s charity care was less than 1 percent of its revenue and not enough to justify a tax exemption. Provena Covenant Medical Center in Urbana, Ill., is appealing the decision to the Illinois Supreme Court.

“In 2002, more than 99.99 percent of Covenant’s patients entered into contracts to pay for their medical treatment,” Justice Thomas Appleton wrote in a unanimous opinion by the 4th District Appellate Court. “Almost all of the Covenant’s $115 million in revenue come from insurance companies, persons paying for their own treatment, and other contractual sources.”

In its Lo v. Provena Covenant Medical Center ruling, the court said the hospital’s operation was more like a place of commerce than a facility used for religious purposes, and, therefore, the property should not be exempt from taxation.