In a statement, the governor said the laws would cut spending by scaling back eligibility for adults in Medicaid, ending state subsidies for federal prescription drug coverage, eliminating certain services and cutting most provider rates between 2.7% and 3.5%. The laws also create revenue by adding another $1 to the state cigarette sales tax and imposing a new hospital assessment that will increase federal matching funds.
The Illinois Hospital Association applauded passage of the bill that clearly defines how hospitals can qualify for tax exemptions, bringing clarity to many hospitals around the state with pending tax-exemption requests.
The state's system of exemptions for hospitals was thrown into uncertainty two years ago after the state Supreme Court upheld the denial of an exemption to 181-bed Provena Covenant Medical Center in Urbana on the legal theory that the hospital did not do enough to serve needy residents.
On Thursday, officials for Provena Covenant—which has since become a part of Chicago-based Presence Health—said they were pleased with the law and that they will likely qualify for tax exemption under the updated standard.
It's not clear whether the hospital will try to recoup taxes it paid after the Supreme Court ruling in 2010. “We don't know at this point, we are kind of looking at that,” Presence Health spokesman Brian Crawford said. “But at this point we are just happy that the issue is settled on a going-forward basis, and we do believe that we will be in compliance going forward from here.”
The bill that defines the new tax-exemption system is SB 2194. The bill that defines the new requirements for provision of charity care is SB 3261. Both were signed Thursday by Quinn.