Healthcare Recovery Audit

During the past 10 years, DSF has recovered over 50 million dollars of California sales and use tax for our Healthcare clients.  Our Recovery Audit process utilizes a Proprietary Recovery System (click to System write-up) with an Audit Approach (click to Approach write-up) that focuses on performing a comprehensive audit, while minimizing disruptions to our client’s operations and ultimately achieving process change to improve future compliance.  The latter (process improvement) sets DSF apart from other recovery firms and provides the foundation for building long-term relationships with our clients.

Most vendors are extremely conservative in determining the taxability of their products, and when unsure, they would rather bill tax than be faced with an audit risk for under-collection.  This, coupled with the State of California’s policy shift to partially exempt products that include taxable and exempt components, and the increasing complexity of many devices all present tremendous opportunities for tax recovery.    

Results that speak for themself

Over the past 10 years, every healthcare client (100%) that we have performed a recovery audit for received cash refunds.  Our Healthcare Recovery Audit Program on average identifies eight vendor claims for each yearly review, with approximately 55% of the total recoveries resulting from these vendor billing errors.  The balance of recoveries results from self-assessed use tax reported directly to the State on exempt or partially exempt products.  We have seen a wide range of variation in self-assessed recoveries, but highest recoveries occur following system or supplier changes have occurred. 

Process Improvement

Over the past 10 years, DSF has built our  strongest relationships with clients when we achieved process improvements and corrected tax overpayments following a review.  No client wants to continuously pay a vendor a fee for the same recovery.  To this end, DSF includes process improvement in every Recovery Audit we perform. So, at no additional cost, DSF Recovery Audits include:

  • Product taxability updates to customer Item Master or Product Catalogue,
  • Services to coordinate correction of vendor tax billings for overpayment products,
  • 2-4 hour Training with presentation materials customized to the audit results, and
  • Account Payable and Purchasing Reference guide.  


Most Recovery projects are performed on a contingent basis.  Therefore, clients only pay a fee when we identify and obtain a refund.  No refund…No Fee.  It’s a win-win.   Furthermore, DSF’s Recovery Audit System (click here for link) automates the documentation and quantification of every recovery.  The standardization of our reporting provides the highest quality and consistency, which ultimately streamlines vendor and state reviews of our claims. 

This automation gives us a competitive advantage in the cost of performance and provides the basis for offering the most competitive pricing.  We also provide discounts for multiple year reviews and real time return reviews. 

Please contact Wade Downey at 562.249.6002 or Roderick Calub at 562.249.6013 with any questions.