Nonprofit hospitals in Illinois faced with the possibility of owing millions of dollars in property taxes were granted a reprieve after the state senate passed legislation broadening the definition of charity care, the Chicago Tribune reports.

Under the state's new definition of charity care — the measure by which Illinois determines whether nonprofit hospitals qualify for a property tax exemption — hospitals not only will be allowed to count free care but also annual Medicaid shortfalls, subsidies for physicians who treat low-income patients, and charitable contributions to community healthcare organizations, educational programs, and research and outreach programs.

Embedded in a Medicaid-related bill, which passed in the state house in May and is expected to be signed into law by the governor, the legislation also clarifies the formula for calculating the amount of charity care and services hospitals must provide to qualify for a tax exemption, ending years of wrangling over the issue. According to the new formula, hospitals must provide an equal or greater amount in free or discounted services to low-income patients each year than their estimated property tax liability.

"Our ultimate goal was fair, workable, clear criteria so that [all hospitals] would know what they have to do to qualify for an exemption," said Danny Chun, a spokesman for the Illinois Hospital Association, "and that's what's been achieved in this legislation."