Five non-profit hospitals were lucky five months ago when Salt Lake County decided not to tax them, commissioners say.
But the six non-profit hospitals commissioners decided to tax will have to pay assessments dating back to 1986.Commissioners voted Tuesday to reaffirm their October 1987 decision and to acknowledge the official reasons why St. Mark's, Holy Cross-Jordan Valley hospitals, the Magna Clinic, Intermountain Health Care's Alta View and Cottonwood hospitals, and IHC's Instacare facilities were added to county tax rolls. They are the first non-profit hospitals in the state to be taxed.
Some of the reasons, written by the county attorney's office, contained harsh language, and commissioners said the five tax-exempt hospitals were not much more deserving.
Shriner's, Holy Cross, Wasatch Canyons and LDS hospitals, Primary Children's Medical Center and St. Joseph's Villa were granted exemptions.
"The vagueness in the standards allowed us to exempt them," Commission Chairman Bart Barker said, referring to the standards by which commissioners determined how much charity the hospitals really were providing. "If we had a set standard, Shriner's (hospital) would probably be the only one exempted.
"If anyone challenges these decisions, we would be hard pressed to justify the exemptions we made."
The commissioners may or may not have to justify the exemptions.
Douglas J. Hammer, vice president and general counsel for IHC, said they haven't as yet decided if the corporation will appeal the commissioners' decision.
"We have not had an opportunity to review the written order," he said Tuesday. "We will review it with the management and trustees of the hospitals, take it under advisement and determine what course of action we will need to take.
"But nothing is out of the question," he said.
The executive said that in material given to the county Board of Equalization last April, IHC documented more than $40 million in "gifts" to the community.
Commissioners said other hospitals also showed they provide millions of dollars in charitable services to the community, but none could come close to Shriner's record. Shriner's showed evidence that it refuses payment for health care.
County attorneys were particularly critical of St. Mark's, saying the hospital made efforts to discourage the extension of charitable care.
"The evidence presented indicates an unwillingness on the part of St. Mark's to advertise or apprise the community of the fact that charitable care is available," the written explanation said, also noting the hospital accumulated a large surplus of money.
"In the past, St. Mark's Hospital has filed claims against Salt Lake County for reimbursement of indigent care given to prisoners housed at the Salt Lake County Jail," the statement said.
St. Mark's officials speculated that when the decision was made to tax the hospital, there may have been some confusion about the pending sale of the hospital.
It had been announced in August that St. Mark's, owned and operated by the Episcopal Diocese of Utah, was to be acquired by the Hospital Corporation of America, a for-profit operation. Hospital officials said, "That may have influenced the commissioners' decision-making."
The statement also accused the other taxed hospitals of not letting the public know of the availability of charitable care.
County officials will determine what the hospitals owe by May 15, and hospital officials will have until mid-June to convince commissioners to lower the figures. Or they can appeal the decision to the State Tax Commission. From there it could go to the Utah Supreme Court, which in 1985 found that not-for-profit hospitals needed to pass a new six-point test to prove their worthiness for tax exemption.
Voters rejected a proposal in 1986 that would have added specific language to the Utah Constitution making non-profit hospitals and nursing homes automatically tax-exempt. Because of that decision, hospitals are obligated to defend their tax-exempt status yearly.
Salt Lake County is the first in Utah to require taxes from non-profit hospitals. Hospitals in other counties met last year with their individual commissioners and, without exception, were given exemptions.