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Provena Covenant to Continue Tax-Exempt Fight

Provena officials question basis of Illinois Department of Revenue's decision to continue imposing property tax burden on the non-profit hospital, describe serious impact to hospital mission

Provena Health officials blasted the Illinois Department of Revenue's decision to deny its property tax exemption renewal, saying it will hurt the hospital, its patients and the community.

"This decision is completely unsupported by legal precedent, or the facts we provided," said William T. Foley, President and CEO.  "The state's ruling flies in the face of our own charitable mission and challenges every Illinois hospital's ability to continue serving the poor and uninsured."

"We will quickly appeal this ruling," he added.

In January 2003, the Champaign County Board of Review recommended that Provena Covenant's property tax exemption be denied. In February 2004, the Illinois Department of Revenue endorsed the board's recommendation, and Provena Covenant's appeal of that decision was heard before an administrative law judge in December 2004. 

Since the original recommendation in 2003, Provena Covenant has paid $4.8 million in property taxes.  Despite Provena Covenant's commitment of more than $21.8 million annually in charitable benefits to the community, and its operating losses from providing uncompensated care and inadequate government reimbursement, the judgment issued today denies charitable status to the medical center and forces the hospital to pay property taxes.

Hospitals across the nation have watched the Provena Covenant case closely, as many health care institutions are being challenged on their property tax-exempt status.  Under the requirements laid out in the ruling, no hospital in Illinois could be considered a charitable institution.

"This is a crisis for Provena Covenant and a national crisis for non-profit hospitals. Community hospitals that care for the uninsured, Medicaid-insured and indigent populations are left with little financial resources to pay for property tax," said Foley.

 Several health care and Catholic organizations have publicly supported the renewal of Provena's charitable status, including: the American Hospital Association (AHA), the Illinois Hospital Association (IHA), the Metropolitan Chicago Healthcare Council (MCHC), the Catholic Hospital Association (CHA), the Illinois Catholic Hospital Association (ICHA), and the Catholic Conference of Bishops. 

 "Imposing new tax burdens on hospitals such as Provena Covenant will only force them to reduce services and increase health care costs, thereby jeopardizing access to quality health care services as well as the financial viability of the hospital," said Ken Robbins, IHA President. "This decision is disturbing and outrageous."

Provena Health is a Catholic health system that includes six hospitals, 16 long-term care and senior residential facilities, 28 clinics, five home health agencies and other health-related activities operating in Illinois and Indiana.

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