In recent years the enforcement climate has become harsher than ever before as more and more providers experience significant recovery demands resulting from claims overpayment extrapolations made by Medicare and Medicaid contractor audits. In Medicare in particular, the Medicare Recovery Audit Contractors (RACs) and Zone Program Integrity Contractors (ZPICs) very actively audit claims to identify and recover inappropriate payments. In Medicaid, claims audits for recovery purposes are conducted by Medicaid RACs (M-RACs) and Medicaid Integrity Contractors (MICs), among others. Although the appeals processes differ from each other and requirements on auditors vary, one should keep in mind that there are general standards that set overarching requirement for government auditors. The auditors have to conduct their work according certain professional standards that allow for inter-rater reliability, independence, and objectivity and must follow Generally Accepted Government Auditing Standards (GAGAS). If they don’t, the results may be subject to challenge.
Government auditors are to follow professional standards and guidance contained in the GAGAS, which are commonly referred to as the “Yellow Book” because of the distinctive bright yellow cover of the hard copy version. GAGAS provide a framework for conducting high-quality audits with competence, integrity, objectivity, and independence. The Yellow Book is issued by the Comptroller General of the United States in the Government Accountability Office (GAO). The Yellow Book was revised for 2011 to replace the 2007 version and is now also available as a PDF version on the GAO website.  GAGAS contains standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernment organizations. GAGAS are to be followed by auditors and audit organizations when required by law, regulation, agreement, contract, or policy. These standards pertain to auditors’ professional qualifications, the quality of audit effort, and the characteristics of professional and meaningful audit reports. When appealing some of the auditor’s findings or processes that led to the findings or demands, it is useful to keep in mind that the auditors are subject to these standards and practices that comply with such standards.