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7 AAC 150.200. Facility audits and desk reviews. (a) In administering the Medicaid program, the department may perform facility audits, desk reviews, and field audits of various types and scope and take the results of those facility audits, desk reviews, and field audits into account in establishing a facility’s payment rate. The department will perform facility audits, desk reviews, and field audits with respect to a facility’s year-end report submitted under 7 AAC 150.130(c). The scope and frequency of facility audits, field audits, and desk reviews are determined at the department’s discretion. This section does not apply to the department’s conduct of investigations or audits regarding patient abuse or neglect, fraud, or other program noncompliance. This section does not limit the department’s authority under this chapter to review and adjust items directly included in a facility’s payment rate based on a budget submitted under 7 AAC 150.130(b). (b) If the department performs a field audit or desk review, the process in this subsection applies. The department will commence its field audit or desk review with respect to a facility’s year-end report after the facility has filed its year-end report under 7 AAC 150.130(c) and the department has determined the report to be complete under 7 AAC 150.140(e). The department will review the facility’s year-end report and provide written notice in accordance with 7 AAC 150.140(a) — (d). The department will complete its field audit or desk review of a facility’s year-end report and provide to the facility a completed field audit or desk review report. The department will provide to the facility, as attachments to the department’s completed report, a revised Medicare cost report, and a revised Medicare cost report in electronic format if the facility provided a CMS-approved electronic filing of its Medicare cost report with its annual year-end report. The department will provide the department’s completed report and all attachments to the facility promptly upon completion, in accordance with (1) or (2) of this subsection, or (f) of this section. The following provisions apply to year-end field audit and desk review reports:

(1) if a facility’s year-end report required by 7 AAC 150.130(c) is filed with the department no more than 150 days after the close of the facility’s fiscal year and is determined by the department to be complete, the department will provide to the facility a completed report and the department’s proposed adjustments to the year-end report for purposes of setting rates under this chapter no later than 40 days before the beginning of the facility’s applicable rate year;

(2) if the facility’s year-end report required by 7 AAC 150.130(c) is filed with the department more than 150 days after the close of the facility’s fiscal year, the department may establish a temporary rate for the facility pending establishment of the facility’s permanent rate;

(3) a facility may file with the department a response to the department’s field audit or desk review report no more than 40 days after the date the department issues the report; the department may make additional related adjustments if the facility makes objections to the department’s adjustments; the department will provide to the facility a description of any additional adjustments;