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trial balance to the expense worksheet of the cost survey. (d) A reduced annual report consists of documents listed in (c)(1) — (4) of this section, except that a provider whose federal tax identification number received less than $750,000 in Medicaid revenue related to personal care services, Community First Choice services, or home and community-based waiver services as described in (b)(2)(B) of this section may substitute a reviewed financial statement for an audited financial statement as specified in (c)(2) of this section and substitute a reviewed working trial balance for a post-audit working trial balance as specified in (c)(3) of this section if the review was conducted by an independent certified public accountant. (e) A target provider shall maintain a system of accounts, records, and books to document and track financial and statistical information related to personal care services under 7 AAC 125.010 — 7 AAC 125.199, Community First Choice under 7 AAC 127, or home and community-based waiver services under 7 AAC 130. A target provider is responsible for ensuring that financial and statistical information is adequate to report annual costs and usage by each personal care service, Community First Choice service, or home and community-based waiver service provided. (f) A target provider shall base all financial and statistical information on an accrual method of accounting and comply with generally accepted accounting principles (GAAP). For the target provider to base financial and statistical information on an accrual method of accounting,

(1) revenues must be reported in the period earned, regardless of when the payment was received; and

(2) costs must be reported in the period in which they were incurred. (g) A target provider’s accounting system must be adequate to separate allowable costs from nonallowable costs and capable of producing detailed reporting of allowable costs by personal care service, Community First Choice service, or home and community-based waiver service. Nonallowable costs and costs not related to the provision of recipient services must be separately tracked and reported. (h) If a target provider fails to submit a complete annual report in a timely fashion, the department may reduce Medicaid payments for services listed in (a) of this section by five percent, starting as early as the day following the date the complete annual report is due, with the payment reduction remaining in effect until the complete annual report is received. (Eff. 3/1/2011, Register 197; am 11/3/2012, Register 204; am 1/1/2014, Register 208; am 3/1/2018, Register 225; am 10/1/2018, Register 227; am 1/1/2021, Register 236; am 9/9/2021, Register 239; am 5/1/2023, Register 246) Statutory Authority: Authority: AS 47.05.010 AS 47.07.030 AS 47.07.040