Nonprofit hospitals are big businesses. How much charity care do they have to provide to justify their tax exemption? The law is notoriously fuzzy on that question, which it’s being put to the test in arguments today before the Illinois Supreme Court. Provena Hospital in Urbana, Ill., spent about 0.7% of its annual revenue on charity care a few years back — a figure the a local tax review board decided was too low to justify the hospital’s property-tax exemption. The case went back and forth in the state’s lower courts as it worked its way up to the top. Many in Illinois are looking to the state Supreme Court to clarify what hospitals have to do to keep their nonprofit status, the Chicago Tribune notes this afternoon. But at least one justice on the court seemed wary of wading into the minutiae. “Is this court going to be forced to determine whether there was

a small percentage of charity care given?” the justice asked, according to the Trib. A lawyer for the hospital argued that what matters is that a hospital makes charity care available to all patients who need it. And he said any minimum standards should be set by the legislature, not the court. The broader issue here goes beyond Illinois. In the U.S. Senate, Chuck Grassley has been looking into the issue for years. The Baucus health-care bill being debated by a Senate committee this week includes some requirements for nonprofit hospitals , such as publicizing financial assistance policies and limiting the billing of patients who qualify for financial assistance. But it doesn’t include a measure discussed earlier this year that would have imposed a tax on nonprofit hospitals that don’t provide a minimum amount of charity care. Photo: iStockphoto

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How Much Charity Care Do Nonprofit Hospitals Have to Provide?