Not-For-Profit Hospital Status Under Heightened Government Scrutiny

Latest Strategies for Protecting Tax-Exempt Status

Healthcare reform law imposes additional requirements for tax-exempt hospitals

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, May 19, 2010

Recorded event now available

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Course Materials

This CLE course will provide guidance to counsel for not-for-profit (NFP) hospitals on the proactive measures necessary to protect the hospital's tax-exempt status, in light of the recent Provena Covenant ruling and other federal and state initiatives targeting NFP hospitals.


Not-for-profit hospitals (NFPs) have operated under heightened scrutiny for the past several years amid allegations of unfair billing and collection practices, failure to provide charity care and participation in for-profit schemes.

Lawsuits in federal and state courts accuse NFPs of failing to meet their tax-exempt obligations under 501(c)(3) and state law. Additionally, NFPs face investigations by state attorneys general, initiatives by state legislatures, and challenges to property tax exemptions.

In March, the Illinois Supreme Court upheld the loss of Provena Covenant hospital’s tax-exempt status, finding that it served too few charity care patients. Hospitals must closely analyze this decision and review whether their level of charity care is sufficient to maintain tax exempt status.

Listen as our authoritative panel discusses how hospitals can protect their tax-exempt status amid increased IRS and state scrutiny.



  1. New federal law requirements after Patient Protection and Affordable Care Act (PPACA)
    1. New IRC § 501(r) requirements to maintain tax exempt status
    2. Role of nonprofit health care under PPACA (new disclosure requirements, studies, reports to Congress)
  2. The Illinois Supreme Court decision in Provena Covenant
    1. What the opinion says and doesn't say; where the law is now
    2. Can plurality opinion be exported?
    3. Putting Provena in context (How we got from 2002 to today)
  3. How hospitals should react to new federal law requirements and Provena


The panel will review these and other key questions:

  • What is the impact of the attacks on NFPs and new requirements for hospitals whose tax-exempt status results in substantial financial benefits every year?
  • How can NFPs balance the requirements to maintain tax-exempt status while managing the rising costs of charity care?
  • What steps should hospitals take to comply with state and federal law requirements for NFPs and avoid government penalties or civil liability?
  • What are the additional requirements imposed on NFP hospitals by the new healthcare reform law?


Patrick S. Coffey
Patrick S. Coffey

Locke Lord Bissell & Liddell

He is an experienced trial lawyer and corporate counselor. His practice concentrates on the representation of corporate...  |  Read More

James R. King
James R. King

Jones Day

He advises tax-exempt healthcare organizations and other tax-exempt and nonprofit organizations regarding tax,...  |  Read More

T. J. Sullivan
T. J. Sullivan

Drinker Biddle & Reath

He is a healthcare transactional and tax partner with more than 20 years experience advising tax-exempt organizations...  |  Read More

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