Turning up the heat on talks aimed at making sure nonprofit hospitals do enough charitable work, Illinois Gov. Pat Quinn stuck to his Thursday deadline and authorized the Department of Revenue to resume decisions that could strip some health care institutions of valuable tax exemptions.
The Democratic governor's action came a day after negotiations failed to reach a compromise on how much charity care hospitals must provide to earn freedom from local taxes. The state had refrained from decisions on exemptions as negotiations proceeded.
Quinn's move further complicates his relationship with the powerful Illinois Hospital Association, which last month said it would vigorously oppose the governor's proposed $2.7 billion in cuts to projected Medicaid spending.
Illinois Hospital Association President Maryjane Wurth said Thursday that further rulings on hospital tax exemptions will distract from finding a legislative solution on the charity care issue. In a statement reacting to Quinn's announcement, Wurth said her 200-member group appreciates the governor's intention to restart discussions on possible new legislation that could be passed by the legislature this spring.
But Wurth said the group is "extremely concerned" about rulings from the Department of Revenue.
"Requiring nonprofit hospitals across the state to pay property taxes would undermine patients' access to care, increase health care costs and damage an already fragile health care system," Wurth said in the statement.
Representatives of hospitals, local governments and advocates will reconvene talks early next week, said Quinn spokeswoman Brie Callahan, in an effort to find "a legislative solution that is both constitutional and recognizes the importance of hospitals in our communities and the need for widespread access to care for the uninsured."
The wrangling over hospital tax exemptions stems from a 2010 Illinois Supreme Court ruling that an Urbana hospital wasn't doing enough charity care to qualify for a tax exemption.
Last year, the Department of Revenue cited the 2010 ruling when denying property tax exemptions to three hospitals: Northwestern Memorial's Prentice Women's Hospital in Chicago, Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur.
Five months ago, Quinn put a temporary halt on such rulings to give breathing room for negotiations on possible legislation, and set March 1 as a deadline for recommendations.
The Department of Revenue issued a statement Thursday saying it would follow Quinn's directive and resume the process of considering applications "this month." In Illinois, property taxes are collected by county governments, and the Department of Revenue decides which institutions are eligible for tax exemptions.
Millions of dollars of tax revenue is at stake -- money that could go to cities, schools and parks. At least 17 Illinois hospitals and health systems are awaiting decisions on their tax-exempt status, including Children's Memorial Hospital in Chicago, Memorial Hospital Association in Carthage and Southern Illinois Hospital Services in Murphysboro.
Cook County Board President Toni Preckwinkle praised the governor for authorizing the resumption of hospital tax rulings, a move she'd urged him to make in a letter that her office made public Wednesday.
"This is an important public health issue that impacts many of our most vulnerable citizens," Preckwinkle said.
Health care advocate Diane Limas of the Chicago-based Fair Care Coalition also praised Quinn's action. The coalition wants each hospital to provide 6 percent of its revenue for charitable benefits to get a tax exemption. Eighty percent of that would have to be in the form of free or discounted care for the poor.
"If putting the hospitals on the tax rolls will get the Illinois Hospital Association back to the table and negotiating seriously, that's what we want," Limas said.
The Illinois Hospital Association has drafted its own legislation and lined up an East St. Louis Democrat as a sponsor. The group favors requiring nonprofit hospitals to provide charitable care and other community benefits at least equal to the property taxes it would have paid.
In addition to Edward Hospital, the suburban facilities seeking exemptions are: Midwest Palliative and Hospice Care Center, Glenview: Advocate Condell Medical Center, Libertyville; Northshore University Health System, Skokie; Adventist Bolingbrook Hospital, Bolingbrook; Adventist GlenOaks Hospital, Glendale Heights; Elmhurst Memorial Healthcare, Elmhurst.