Edward's charity care climbs as tax-exempt decision looms
Charity care performed at Naperville's Edward Hospital increased by 10 percent this year, to $13.6 million, a key statistic as a decision looms on whether the hospital can keep its tax-exempt status.
The hospital released the figures this week as officials from the Illinois Hospital Association, state department of revenue and the attorney general's office continue to negotiate a legislative compromise. State revenue officials declared in August that the hospital doesn't provide enough free or discounted treatment for the poor to qualify to be tax-exempt.
Gov. Pat Quinn wants recommendations on legislation by March 1.
Danny Chun, spokesman for the hospital association and revenue department spokeswoman Sue Hofer agree that all parties are working “diligently” and believe they can have a compromise by Quinn's deadline.
Edward releases its charity figures annually, but Brian Davis, Edward's vice president of marketing and government relations, said they take on more significance this year.
“Residents of this region deserve to know what we're doing to continue to earn our tax-exempt status,” said. “We are providing a very important safety net for the uninsured in our communities, and when you look at $79 million in community benefit and nearly $14 million in charity care, that is significant.”
In addition to the charity care, care given with no expectation of payment, Edward also includes in its Community Benefit statement, $51.2 million in unreimbursed Medicare/Medicaid payments, $7.5 million in bad debt and $6.6 million in community services.
The department of revenue, however, recognizes only direct charity care. Hofer said courts have ruled that the unreimbursed payments, such as Medicare, are a contractual issue between the hospital and the companies, not charity.
“The constitution says the state can only exempt charity, schools and religious institutions from paying property taxes. So we consider the charitable costs,” she said. “Sorry. It's the people who wrote the constitution that said that, not the department of revenue.”
Davis said the department needs a broader definition of charity.
”Under what we believe the state believes, they wouldn't give credit for things like providing $650,000 to Access DuPage, which is a model in DuPage caring for the working poor,” Davis said. “So all hospitals in DuPage work with the county to provide a safety net above and beyond normal charity care. These people may fall through the cracks and the state would not take that into account.”
There is no state money involved in the decision on whether Edward and possibly other suburban hospitals will have to pay property taxes, but local municipalities, parks and schools could see a windfall if the hospitals end up paying.
Hospitals, however, say losing their property tax exemption would force them to reduce services, lay off employees and cancel construction projects.
“At this point,” Davis said, “we are just very hopeful that a fair legislative solution is reached in 2012.”