The doctors practicing at the Shipshewana Physicians’ Office are employees of the Petitioner and the billing for said doctors is carried out by the Petitioner. Goshen Hospital also provides nursing, medical, and support staffing to the subject office. The Petitioner considers the physicians’ practices to be part of an integrated health care system. All of Petitioner’s physician offices are on the same computer network so that data can be analyzed in order to make sure they are providing care at the appropriate benchmarks. Consequently, the hospital and offices do not really operate as separate entities. They operate as one entity with the same mission, which is to improve the health of the community they serve.
The Shipshewana Physicians’ Office makes indirect financial contributions in the form of additional inpatient admissions that offset their negative financial performance. Although their employment contracts do not require the physicians to refer their patients to Goshen Hospital for necessary treatment, Dr. Pechin and Dr. Keaffaber refer their patients to that facility approximately 90-95% of the time. The remaining 5-10% of referrals pertains to services that the Goshen Hospital does not perform. This high percentage of referrals is compelling evidence that the subject physician’s office supports Goshen Hospital’s inpatient facilities. The Petitioner submitted evidence that the physicians’ practices lost money on their own.
The ownership and use of the Shipshewana Physicians’ Office is necessary for Goshen Hospital’s continued viability. It would be extremely difficult for the hospital to survive without referrals from the subject office’s doctors. Goshen Hospital consists of 120 beds. The weight of the evidence convincingly establishes that in order to remain viable and generate revenue, the hospital depends on these referrals.
Therefore the primary purpose of the Shipshewana Physicians’ Office is to support the hospital. St. Margaret Mercy Healthcare Centers, Inc. v. Lake County, Pet. 45-008-00-2- 8-00001 (July 8, 2008).
Alternatively, property can qualify for an exemption under I.C. § 6-1.1-10-16(h) if the property “provides or supports the provision of charity care…or …community benefits[.]” While the statute does not specify a minimum amount of charity care and community benefit necessary to qualify for an exemption, there must be some meaningful benefit to the community in order to justify the tax-exempt status.
Here, the Petitioner has a policy that grants indigent allowances or hardship adjustments to patients who are incapable of paying their personal medical care and unable to qualify for financial assistance through federal and state government assistance programs. Goshen Hospital has a sliding scale fee schedule indexed to the federal poverty guidelines for the indigent allowances or hardship adjustments.
The Petitioner conducts no-cost community wellness programs at the Shipshewana Physicians’ Office.
The area where the subject property is located is a Health Care Professional Shortage Area. The Shipshewana Physicians’ Office was designated as a Rural Health Clinic in 2010. Rural Health Clinics increase access to Medicaid, Medicare, underinsured, and uninsured patients.
The Board finds that the Petitioner, Goshen Hospital, presented evidence sufficient to establish that Shipshewana Physicians’ Office is substantially related to and supportive of the Goshen Hospital’s inpatient facility. Alternatively, Shipshewana Physicians’ Office supports Goshen Hospital’s provision of charity care and community benefits sufficient to entitle the Goshen Hospital to a property tax exemption for the subject property under Indiana Code § 6-1.1-10-16(h).
The Goshen Hospital established a prima facie case showing that it is entitled to a property tax exemption. The burden, therefore, shifted to the Respondent to rebut the Goshen Hospital’s evidence. The Respondent presented no evidence to rebut Goshen Hospital’s evidence. The Deputy Assessor, Jerri Brown, gave no direct testimony and merely handed a packet of exhibits to the ALJ without going through any of them. This is an ineffective approach when seeking to prove that the subject property should be 100% taxable.
It is the Respondent’s duty to walk the Board through its analysis. See Indianapolis Racquet Club, Inc. v. Washington Twp. Assessor, 802 N.E.2d 1018, 1022 (Ind. Tax Ct. 2004). In other words, the Respondent must explain its evidence. See Wash. Twp. Assessor v. Kimball Int'l, Inc., 866 N.E.2d 405 (Ind. Tax Ct. 2007). The Deputy Assessor failed to show how the evidence she presented proved that the subject property should be 100% taxable.
