By STEVE EIGHINGER

Herald-Whig Staff Writer

If Illinois lawmakers ultimately have to decide how much charity is required from a non-profit hospital to keep its tax-exempt status, Tim Moore feels Blessing Hospital has nothing to worry about.

Moore, the vice president of finance and chief accounting officer at Blessing, has been monitoring last week's Illinois Supreme Court ruling that an Urbana hospital, Provena Covenant Medical Center, did not provide enough charity care in 2002.

The court said since the hospital did not provide enough care to the poor, the state had the right to strip Provena of its tax-exempt status for that year. Provena may also lose the tax-exempt status in some other years being questioned, which could result in the hospital having to pay $1 million or more for each year it is found liable.

The court, however, did not explain how much charity is required for a hospital to remain tax exempt, which has always been a gray area, Moore said.

"While the precedent is concerning, there is no indication that the ruling ... will immediately affect Blessing Hospital," Moore said.

Moore said that for more than a century the Illinois Supreme Court has recognized "a simple, but critical" reality.

"A hospital that treats patients regardless of their ability to pay and that does not provide profits to private individuals is charitable and merits an exemption from property taxes, without regard to the specific amount of free care it provides," Moore said.

Moore said hospitals have operated on suggested governmental guidelines of providing about 8 percent of net revenues for charitable work.

Moore said Blessing normally falls between 10 percent and 24 percent, depending on which formula is applied. Much of the difference in the formulas revolves around whether the shortfall from state Medicare and Medicaid payments is included.

"Blessing Hospital takes its role as providing a health care safety net for our community very seriously," Moore said. "Each year the hospital provides a public accounting of the resources it has invested to meet the community's needs in lieu of paying property taxes."

In fiscal year 2009, the last year for which audited figures are available, Blessing's "community benefit" investment totaled $62.6 million, an 8 percent increase from 2008.

That figure includes $3 million in charity care, covering the medical expenses of patients who state before receiving care they cannot pay, and an additional $8.7 million in bad debt expense covering patients who said after receiving care they could not pay.

Blessing was also responsible for $3.8 million in a variety of health-care education programs that provided professional training, $1.6 million in free or discounted health screenings and tests for the public and $1 million in free care to patients of the Community Outreach Clinic who have no health insurance and no other means to pay for their care.

"If the tax-exempt status would be taken way, it would be crippling. It really would be," Moore said. "I don't see how we could provide the same level of benefits if we were to be taxed."

If Blessing were to have to pay property taxes, Moore said that would amount to about $6 million a year.

"Exemption from property taxes is society's way of investing in the health and well being of people served by hospitals," Moore said. "Tax exemption is one way the community demonstrates its partnership with non-profit hospitals."

-- seighinger@whig.com/221-3377