Gray•Duffy successfully handles appeal of an audit by Department of Developmental Services for Children’s Therapy Network

June 2021


Partner Erin Tenner successfully handled the appeal of an audit by Department of Developmental Services for Children’s Therapy Network. 


The audit covered a three-month period and determined that the client had overcharged Tri-Counties Regional Centers and was demanding repayment of approximately $30,000.00.  As a result, Children’s Therapy Network was targeted for a practice that was, and still is, commonplace in the industry. 

Tri-Counties Regional Centers employees had been unwilling to confirm their verbal approvals of the payments. If the appeal failed, future audits could have resulted in hundreds of thousands of dollars of chargebacks, to not only Children’s Therapy Network, but to other vendors of Tri-Counties Regional Centers as well. The charges were based on the assertion that Tri-Counties Regional Centers had not authorized payment for supervision of assistants, which by its very nature requires, at least some of the time, in-person supervision resulting in a ratio of two therapists for one patient. The Department of Developmental Services (DDS) took the position that the cost of supervision must be borne by the provider because only a 1:1 ratio of patient to therapist had been authorized in writing, and supervision required a 1:2 ratio. In the appeal, Ms. Tenner asserted the legal obligations of DDS to provide competent services, and despite the client’s belief that the appeal would fall on deaf ears, succeeded on all charges appealed.  

Ms. Tenner is well-versed in audit issues and has assisted auto dealer clients in similar appeals, including successful appeal of a workers’ compensation audit and successful appeal of real property tax valuation determination.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.