UI Professor: Carle Integration Could Create Tax Issues

A proposed combination of Carle Foundation Hospital and Carle Clinic Association may not settle ongoing tax issues surrounding health care facilities in Illinois - in fact, it may complicate them.

Carle Hospital - a not-for-profit company with tax exemptions - plans to purchase Carle Clinic Association, a separate, for-profit firm. The combination would be considered a not-for-profit company.

A University of Illinois law professor says the move makes good business sense. John Colombo says integrating the two organizations will help improve work flow, cost and the way patients get care. But he wonders what may happen if the combined Carle seeks tax exemptions for clinic buildings after paying taxes on them for years. Colombo says local governments will keep a very close eye on that.

"If I were the county assessor or on the county board of review, at this stage I'd demand a lot of evidence that there is serious charity care work going at these sites (Carle Clinic's facilities), and if couldn't get this evidence from Carle I'd recommend a denial of tax exemption and at this point let Carle litigate the issue, Colombo said.

Colombo says doctors who held an ownership stake in Carle Clinic would lose some autonomy under such a deal, but he says they may also get more job stability in return. Those doctors -- and state regulators -- still have to approve the deal. Carle is not granting interviews on the proposal.

Carle Hospital is challenging the loss of its tax-exempt status for property taxes. State and county officials ruled that Carle was not providing enough charity care to qualify.