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(4) adjustments proposed during the course of a desk review or a field audit are not limited to adjustments the department has made in prior desk reviews or audits; the department may make adjustments to reflect reporting in accordance with AS 47.07 and 7 AAC 105 — 7 AAC 160. (c) The department may conduct desk reviews or field audits of a facility. The department may conduct a field audit with respect to a facility’s year-end report submitted under 7 AAC 150.130(c) or expand the desk review to a field audit. During a department desk review or field audit, the department may review a sample of medical and billing records for both Medicaid and non-Medicaid patients in order to determine that the Medicaid program is being charged no more than any other payer types for the same services. (d) The department may limit its review of a facility to a desk review. The department is not required to conduct a desk review in accordance with the auditing standards applicable to field audits. As part of a desk review, the department may submit requests for documents or production of other items, as well as requests for information or responses to specific questions. A facility will be allowed at least 15 days, but not more than 45 days, including extensions, to provide the department with its response to the requests, as measured from the date that the department mailed, sent by electronic mail, or otherwise forwarded the requests to the facility. A facility’s failure to timely respond to the department’s requests as provided for in this subsection may result in permanent disallowance of the items in question. This section does not limit the right of a facility to appeal adjustments under 7 AAC 150.220. (e) The department may conduct a field audit of a facility. The department’s field audits will be conducted in accordance with the Government Auditing Standardsestablished by the comptroller general of the United States, adopted by reference in 7 AAC 160.900. In conducting a field audit, the following procedures govern:

(1) the department will notify the facility at least 20 days in advance of any field work scheduled at the facility; the notification will state the planned areas of emphasis and describe documents, items, or other information that the facility is required to produce at the entrance conference; this requirement does not limit the department’s authority to modify the audit or to require additional information that the department considers necessary; the notification will include a proposed agenda for the entrance conference;

(2) the department will schedule an entrance conference with the facility at the earliest practicable time during the audit; at the entrance conference, the department may discuss all proposed adjustments identified to date, will designate the auditor in charge of conducting the audit on behalf of the department, and will address necessary administrative issues relating to the audit; at the entrance conference, the facility shall have all materials requested in the notification of the field audit available for the auditor, designate the person who will act as liaison on behalf of the facility for all purposes with respect to the audit, address the availability of third parties involved in preparation of the information being audited, and address other issues relating to the conduct of the audit;

(3) the timelines established for a facility’s response to the department’s requests for