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Wednesday, May 24, 2006 11:11 pm

Hot talk

A dispute over whether hospitals are charities turns nasty

It’s a common accusation. Business interests with an important case pending before government give big money to an influential politician who’s running for reelection. Critics cry foul — this, they say, is nothing more than an attempt to buy favorable treatment. Business interests and politician deny any wrongdoing and throw mud at the critics. Before long, everyone is swimming in muck, no matter how serious the issue.  The age-old game was alive and well last week in the capital city when the leader of Consejo de Latinos Unidos came to town to accuse not-for-profit hospitals of crawling into bed with Gov. Rod Blagojevich, whose administration must decide whether an Urbana hospital is, in fact, a nonprofit venture. Millions of dollars are at stake. Because the state Department of Revenue initially ruled that Provena Covenant Medical Center isn’t really a charity, the hospital has paid a reported $4.6 million in taxes. The case is being watched closely by hospital executives throughout the country. After a 2004 hearing before an administrative-law judge, the matter is now in the hands of Department of Revenue director Brian Hamer, a Blagojevich appointee. Enter K.B. Forbes, executive director of Consejo de Latinos Unidos, or Council of United Latinos. The Los Angeles-based group has been on a hot streak in recent months, gaining publicity and momentum by way of a 60 Minutes piece on hospital price gouging and even more headlines by paying medical expenses for an uninsured woman in Florida who was struck in the head by a stray bullet. It’s not all bluster: Three years ago, CLU settled a lawsuit against Tenet Healthcare, a for-profit hospital chain the group said was charging uninsured patients as much as seven times more than people who had health insurance. As part of the settlement, Tenet agreed to charge uninsured patients the same as people covered by health-maintenance organizations. If words were bullets, Blagojevich and the Illinois Hospital Association, which has given a quarter-million dollars to the governor during the past two years, would be dead. “Hospitals are in a drunken state of denial,” Forbes thunders. “They screwed with uninsured. They hosed them. They say they’re doing the healing mission of Christ. I didn’t know Jesus had a band of collectors among the apostles. The Catholic Church will have its second-greatest scandal on its hands if it continues to gouge the uninsured.” Minorities, he says, are much less likely to have medical insurance than whites, and therefore hospitals that charge uninsured patients more than they do anyone else are guilty of economic racism. As for Blagojevich, Forbes says, “it’s not a coincidence” that the governor has been getting big contributions from IHA. He says his group wants to know whether anyone from the Department of Revenue has had so much as a cocktail with anyone from the hospital association. “We’re not going to let the Illinois Hospital Association get away with what we call legalized bribery,” Forbes says. “We’re going to be asking for a criminal investigation.” That statement is comparatively low-key for Forbes, who recently said that a magazine opinion piece painting him as a water carrier for conservative interests was “nothing more than a five-minute Viagra to the hospital insiders and hospital associations.” Forbes has worked on presidential campaigns for Pat Buchanan and magazine publisher Steve Forbes (no relation). He also knows J. Patrick Rooney of Indianapolis, a wealthy Republican who helped pay for the 2000 Florida ballot recount that put George W. Bush into office. Although Rooney is on a crusade to force hospitals to reduce charges to the uninsured, CLU is an independent organization, Forbes says. He acknowledges, however, that he has used Rooney’s clout in Washington, D.C. “He’s a friend — I used to work for him,” Forbes says. “We stay in touch. The guy is in like Flynn — when no politician would talk with us, he put us in touch with the right people.” The Provena case has put Illinois on the national map in the debate over health-care costs, but there may be reasons beyond the case that drew Forbes to Springfield last week, winning him headlines in at least two daily newspapers and a spot on the WICS-TV (Channel 20) news. Forbes’ group has often been accused of getting money from special interests. According to a March press release in which Forbes’ group denied receiving any money from political parties, labor unions, or insurance companies, the “single largest donation to the Consejo to date came out of Illinois from a hospital-related entity.” Just which entity that is remains a mystery. “It was like a trust, you can say,” Forbes says. “We have agreements with our donors that we will not release their names. The reason for that is to protect them from undue pressure, any of our donors, from outside forces. We’re involved in such controversial issues that we don’t want our donors to be harassed as much as we have been.” The donation was massive, Forbes says, more than $700,000. That’s considerably more than the organization’s total budget in 2004, according to the most recent figures available from the Internal Revenue Service, which makes public the tax returns of nonprofit organizations such as CLU. The money, Forbes says, was not used to pay for his trip here last week; rather, it is earmarked to pay for medical care for the uninsured. Both the IHA and the state Department of Revenue, where the Provena case is pending, paint Forbes as an irresponsible loudmouth. “Of course we think the accusations are outrageous, ridiculous, unfounded, ludicrous — whatever adjective you want to use,” says Danny Chun, IHA spokesman. “We think it’s a not-very-well disguised attempt to bias and influence the Illinois Department of Revenue in the Provena case. Ultimately it’s to try to prejudice the department against a hospital that is, I believe, deserving of their tax-exempt status.” If so, says a representative for the Department of Revenue, the attempt won’t work. “What you have is people throwing around wild and crazy accusations,” says spokesman Mike Klemens. “It’s nonsense. We’ve done the right thing all the way along.” Klemens observes that the Department of Revenue, acting at the behest of Champaign County, revoked Provena’s tax-exempt status in the first place more than two years ago, triggering an appeal by the hospital. Klemens acknowledges that it is taking a long time for department director Hamer to issue a decision based on a sealed recommendation from an administrative-law judge that he received early this year. A hearing on the matter was held nearly 18 months ago. Hamer is taking his time because the issue is complex, Klemens says, and the written record runs into the hundreds of pages. Any decision the director makes likely won’t be final, he predicts: “I’d be surprised if it didn’t go all the way to the Illinois Supreme Court.” Noting that the hospital association has contributed to both Blagojevich and his Republican opponent, Judy Baar Topinka — who got a $50,000 check on March 1 — Chun says that the association contributes on the basis of a candidate’s stances on issues, not to curry favor. Chun says the governor hasn’t cut medical services or payments to providers despite budget deficits. He has also expanded health coverage for kids, says Chun, who’s quick to add that the association isn’t telling anyone whom to vote for. “This is not meant to be a campaign endorsement for him,” he says. Topinka got a check because she backed a state plan last year to borrow $1 billion and use the money to reduce backlog of Medicaid payments due to doctors, Chun says. Chun denies that the uninsured are stuck with bigger bills than anyone else. It sounds like a business much akin to cars sales, in which only suckers pay the sticker price. “In health care, nobody pays retail,” Chun says. Rather, the list price for any given product or service is merely the starting point for negotiation with insurance companies, he says. If a person doesn’t have insurance but is at or below the federal poverty level, care is free, he says. If an uninsured person’s income is twice the federal poverty level. What about an uninsured person whose income is more than twice the federal poverty level? “Initially you’re going to be billed at full charge, but whether you’re going to pay full charge is up to the hospital,” Chun says. “Theoretically, in that case, if you have ability to pay and you don’t have insurance, it’s up to you to negotiate with the hospital what your payment arrangement’s going to be.”
Forbes is familiar with this explanation. “We call that the sliding scale of discrimination,” he says. Both Forbes and Provena have called on the Department of Revenue to release the decision from the administrative-law judge. “For some unknown reason, final release of that ruling is being delayed by the Department of Revenue,” a Provena spokeswoman told the News-Gazette in Champaign-Urbana more than two months ago. “The opinion is important to all tax-exempt hospitals in Illinois and should be released as soon as possible so that Provena Covenant is able to proceed in its case and regain its position as a charitable institution.” But that’s as close as the two sides get. The prospect of Forbes and his allies’ sitting down and reaching any kind of amicable agreement with the hospital industry seems less than dim. “I wouldn’t even know where to begin talking to these folks,” Chun says. “We’re not going to talk to someone who’s accusing us of bribery.”
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