Equity Recovery Solutions

Jacob Bholat – Leader of the Healthcare Practice
Processed and secured refunds for a large cosmetic implant manufacturer. Previously, the vendor had collected tax; however, State Regulation was updated to exempt all cosmetic implants. Based on previous relationships, Jacob was brought in to help identify refunds, document qualified products, and process customer refunds. Contacted over 2,000 hospitals and doctors to process refunds of over $6 million.
2000
While working for one of the Big4, represented the largest not for profit hospital HMO in California and recovered over $4 million during a sales and use tax audit. This success launched future work in the healthcare area and future successes.
2001
2001 to Current
Served all UC Medical Centers in California, at various times and for various periods. Recovered over $10 million of refunds for this group of hospitals.
2001
2002
Successfully obtained refunds from a large imaging machine manufacturer on optional hardware maintenance contracts. Previously a state audit had led the vendor to believe these charges were taxable.
2002
2002
Obtained refunds on supplements sold directly to several hospital clients. Normally taxable when sold to consumers, however because all items given to patients under doctors orders, qualified delivery as “under prescription” and won treatment as exempt medicines.
2002
2003
Identified and recovered refunds on devices delivering pain medication. State law allows exemption for programmable drug infusion devices fully worn on patients; however this vendor’s product used pressure and volume to deliver medication and was thought to not qualify as “programmable”. Successfully argued that product met definition based on the ability to change dosage using volume and product size, thus meeting the “programmable” criteria.
2003
2003
Represented over 100 hospitals in California during a successful litigation case that exempted Enteral Feeding Supplies and TPN Supplies. Interviewed clinical technicians and established industry percentage still accepted by the state today. Total refund was over $5 million and covered over a 10 year audit period.
2003
2004
Client purchased a large volume of a custom pack using both taxable and non taxable components from a large central supply vendor. Worked with vendor to create two separate Item numbers (one taxable, one exempt) to allow client and vendor to correctly collect tax on partially taxable product at the time of sale.
2004
2004 to current
Served largest for-profit hospital group in the USA.
2004
2005
Represented one of the largest medical gas manufacturers during a controversial sales and use tax audit. Reversed the audit assessment of over $4.6 million into a small assessment of less than $200,000.
2005
2005
Represented two large central supply vendors during an audit. Reviewed over 100,000 products for taxability, developed partially taxable percentages for kits, trays and other items. Worked with State to complete refunds and contacted over 300 hospitals in California to secure refunds on their behalf. Refunds identified (similar over lapping periods) were often greater than those claimed by various hospitals by their consultants, proving superior knowledge well beyond others competitors in the marketplace. Over $8 million in refunds secured for 300 hospitals.
2005
2006
Secured refunds for large medical equipment manufacturer for installation cost related to equipment. Vendor did not separately state installation on invoice and taxed 100% of all charges. Based on State Law, installation is not required to be separately stated to be exempt (one of few charges that qualify in this manner). Worked with vendor to determine installation cost and obtain refunds on behalf of various clients.
2006
2007
Processed and secured refunds for large cosmetic implant manufacturer. Previously vendor had collected tax; however State Regulation was updated to exempt all cosmetic implants. Based on previous relationships, Jacob was brought in to help identify refunds, document qualified products and process customer refunds. Contacted over 2,000 hospital and doctors to process refunds of over $6 million.
2007
2009
Reversed previous Letter Ruling obtained by vendor. Argued and supported audit position that particular product was a qualified suture allowing the preloaded delivery device to be treated as exempt. Originally, vendor’s ruling was based on the item being treated as an implant (deliver device was treated as taxable). Vendor continues to use updated tax treatment.
2009
2010
Identified and filed appeal case regarding blood collection containers. State previously allowed exemption only for Blood Banks and not for hospitals. Appeals case successfully expanded exemption to hospitals and exempted all blood collection containers purchased by hospitals.
2010
2011 to current
In process of establishing a new group hospital ligation for over a dozen product issues. ERS will join forces with Reed Smith, LLP (one of the largest State and Local Tax law firms in the county). Issue still in process, so details are limited unless you join the group of hospitals that participate.
2011