Court: Nursing home must pay bed tax, even if it receives no benefit

The Illinois Supreme Court unanimously ruled that a nursing home must pay a bed tax even if it does not receive a benefit.

The nonprofit Eastern Star skilled facility had argued since 1993 that it shouldn't have to pay the daily $1.50-per-bed assessment because the facility does not apply for or accept any government funding or subsidies, including Medicaid. The 7-0 decision maintained that the state's Public Aid Code was still in force.

“Though Medicaid reimbursement is certainly one of the purposes of the bed fee, it is clear that the bed fee serves many additional purposes that are wholly unrelated to the Medicaid program,” the justices ruled.

In a clarification that may have national implications, the court added that no person paying a tax is guaranteed a benefit. In the past, providers in many states have agreed to pay a bed tax, with a tacit understanding that they would receive even more back in matching funds.