The debate over charity care became all too real last week for a Pennsylvania hospital, which lost its property-tax exemption for not doing enough for the poor.
Judge Parker Ruddock of the Indiana County (Pa.) Court of Common Pleas said on May 10 that Indiana (Pa.) Hospital didn't deserve its exemption because it doesn't donate or render gratuitously a substantial portion of its services.
That requirement is among those that charitable organizations must meet to qualify for property-tax exemptions in Pennsylvania.
Ruddock said the hospital's charity-care charges represented just 2% of its gross patient charges of $58.7 million last year. The 171-bed institution earned a $4.7 million profit, he said.
Ruddock affirmed a 1993 decision by the Indiana County Board of Assessment Appeals to strip the hospital of its property-tax exemption. The local school district filed the tax challenge.
A hospital spokeswoman said the facility is reviewing its legal options. If the decision stands, the hospital could face $600,000 in annual property taxes.