Joliet's two hospitals, like all nonprofits in the nation, don't pay property or income taxes.

In return, they provide charity health care in their communities. But there is debate about how much charity care is enough to maintain a hospital's tax-exempt status. And there is debate on how that charity care should be defined.

Aides for U.S. Sen. Charles Grassley, R-Iowa, were quoted in a Wall Street Journal article on Thursday saying the senator may introduce legislation next year that would quantify how much charity care is needed to keep the tax-exempt status.

In the article, Grassley's aides cited just one hospital -- Silver Cross Hospital in Joliet -- as an example of a facility that is acting uncharitably. The senator's aides noted Silver Cross' planned move from Joliet's East Side to the more affluent New Lenox. The new hospital is expected to be open in 2012.

They also detailed the case of a Silver Cross patient who was sued by the hospital for nonpayment of a $45,000 colon surgery bill that wasn't covered by insurance.

In a letter Grassley sent to the hospital, he asked Silver Cross President Paul Pawlak numerous questions about its charitable operations. He also said that it didn't appear the hospital did its "due diligence" to find out if the man who received the colon surgery qualified for assistance from a government or hospital program.

Silver Cross targeted

Ruth Colby, a spokeswoman for Silver Cross, said the hospital has to move to a new location because it is landlocked at its current location. It would cost more and take more time to renovate the existing campus than to move, she said. She said the hospital has made arrangements with Pace suburban bus service to provide transportation to the new hospital three miles away along Route 6.

Also the hospital has committed to spending at least $4 million a year in charity care, she said. In the last fiscal year, Silver Cross spent $6.3 million, surpassing its own commitment goal, she said.

Silver Cross provides 2.8 percent of its revenue for charity care.

Grassley has mentioned a 5 percent minimum figure, but that has never been acted on legislatively, Colby said.

As for the patient who complained to Grassley's office about his colon surgery bill, Colby said the hospital had already reduced it to $10,000 and offered him a payment plan before the senator became involved.

Although Colby was aware of the Wall Street Journal article because she was asked to comment for it, she said she has no idea why Silver Cross was plucked from all the hospitals in the nation by Grassley's office.

"We were surprised to be (featured), especially based on our track record."

Jill Gerber, a spokeswoman for Grassley, said the senator has looked at tax-exempt issues for a long time in his role as a leader of the Senate committee in charge of tax policy.

"The Silver Cross case is the latest to come to Sen. Grassley's attention," Gerber wrote in an e-mail.

How charitable care is defined

Meanwhile, Mokena-based Provena Health Systems, the parent company of Provena St. Joseph Medical Center in Joliet, is embroiled in a tax-exempt case for its Urbana hospital, Covenant Medical Center.

Covenant was stripped of its property tax exemption in 2003 by the Illinois Department of Revenue, which said Covenant hadn't provided enough charity care to warrant the exemption. Provena challenged Covenant's non-exempt status at the county court level and won.

It lost at the state appellate court level and has now appealed to the Illinois Supreme Court, which should rule on the issue in 2009.

Lisa Lagger, a spokeswoman for Provena Health, said there are questions in Illinois about how charitable care is defined.

"We are confident that the Supreme Court will offer important guidance and reaffirmation of the role that Provena Covenant Medical Center and other not-for-profit hospitals play in helping the un- and underinsured in their communities," Lagger said.

Provena Health's medical facilities delivered about $84 million in community benefits in 2007, she added. Nearly $22 million of that was free care to the poor and underserved at cost, Lagger said.

By CINDY WOJDYLA CAIN
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Source:http://www.suburbanchicagonews.com/heraldnews/business/1342020,4_3_JO21_HOSPITALS_S1.article

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