Provena Covenant Medical Center - Tax-Exempt Case

Tax-Exempt Case

In 2002, the Champaign County Board of Review challenged Provena Covenant's tax-exempt status based on debt-collection tactics and amount of charity care offered. Ultimately, the Illinois Department of Revenue denied Provena Covenant's status, which led to the matter to be considered by the circuit court of Sangamon County, Illinois, which sided with Provena Covenant. The matter was then considered by the Appellate Court, and later, the Illinois Supreme Court which both rendered decisions against Provena Covenant's tax-exempt status. In a March 18, 2010 judgment by the Illinois Supreme Court (Provena Covenant Medical Center vs. the (Illinois) Department of Revenue), the Court agreed that the Department of Revenue had acted properly in denying charitable and religious property tax exemptions requested by Provena Hospitals. In the judgment, the Court noted that “a mere 302 of its (Provena Covenant's) 110,000 admissions received reductions in their bills based on charitable considerations.” The court added, “uninsured patients were charged PCMC’s “established” rates, which were more than double the actual costs of care. When patients were granted discounts at the 25 and 50 percent levels, the hospital was therefore still able to generate a surplus.” In response, the head of Provena Covenant Medical Center said, “We are deeply disappointed that the Illinois Supreme Court has denied the property tax exemption of Provena Covenant Medical Center,” said Jon Sokolski, Chair of the Board. “Provena…cares for all in our community who need our health services regardless of their ability to pay. In 2008, we provided more than $38 million in free care and other community benefits.”