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Three Illinois Hospitals Stripped Of Property Tax Exemption

CHICAGO (CBS) -- Three Illinois hospitals have been told they'll have to start paying property taxes, but the hospitals warn the move will affect everyone's health care.

Northwestern Memorial Hospital's Prentice Women's Hospital, Edward Hospital in Naperville and Decatur Memorial Hospital have been told they are losing the property tax exemptions granted to non-profit hospitals because their facilities operate more like businesses than charities.

As CBS 2's Suzanne Le Mignot reports, the state's Revenue Department said they're not doing enough charity work, so now they'll have to pay property taxes. The department also is reviewing property tax exemption applications from 15 other hospitals.

The Illinois Constitution exempts any places used exclusively for charitable purposes from paying property tax.

But the Illinois Department of Revenue said that the three hospitals weren't doing enough free or discounted treatment of the poor to qualify for the exemption.

The Illinois Hospital Association saw things differently.

"It's not good for patients. It's not good for our communities. There's nothing positive about this," said IHA President Maryjane Wurth

Wurth said the denial of property tax exemptions for Prentice, Edward and Decatur Memorial hospitals could mean big changes for their patients.

"Northwestern Memorial serves the highest number of Medicaid moms that deliver babies in the entire state and we, frankly, think these are essential community benefits that need to be preserved," Wurth said. "We fear and worry that this will mean that there will be less community services, less ability to help with prevention and primary care services, less access to care – because these hospitals reinvest and provide essential community assets and services to patients."

Nick Danos said he's received valuable care at Edward Hospital here in Naperville.

"Edward Hospital pours in so much money into the community," he said. "They do so much for the town, they do pro bono work."

The Illinois Department of Revenue said the three hospitals operate more like a business than a charity. Patients are treated for a fee, not for free, therefore they should pay property tax.

"I think it's unfortunate, because Edward is one of the premier hospitals in the state and I've gone there personally with my children and I've always been very pleased with their care, so if that were to happen I'd be very disappointed," Naperville resident Denise Newman said.

The hospitals can appeal the decision and ask for a review by the courts.

Northwestern officials said they will review all of their options.

"We are disappointed by, and disagree with, the Illinois Department of Revenue's decision to deny Northwestern's Prentice Women Hospital its property tax exemption," officials said in a statement. "It is important to note that Prentice Women's Hospital and its predecessor hospital, along with the land which was previously used by Wesley Memorial Hospital and Northwestern University has not been taxed for almost a century."

Decatur Memorial Hospital and Edward Hospital officials said they planned to appeal the Revenue Department's decision.

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