(1) During the period from July 1, 2002 through December 31, 2003, the physical medicine conversion factor will be adjusted on January 1, April 1, July 1, and October 1, 2003, as needed to keep the average cost-per-visit for physical medicine services in line with expected costs. The expected average cost-per-visit amount for the July 1, 2002 through December 31, 2003, period has been determined using state compensation insurance fund data. State compensation insurance fund data will continue to be used to monitor the actual average cost-per-visit during the period.

(2) If after July 1, 2002, the average cost-per-visit for physical and occupational therapy services varies more than 1 percent from the average cost-per-visit of $77.74, the conversion factor will be adjusted according to the following process:

(a) An adjustment to the conversion factor for the physical and occupational therapy specialties will be made on January 1, 2003, using the actual average cost-per-visit for the period of July 1, 2002, through September 30, 2002. A second adjustment may be made on April 1, 2003, using the actual average cost-per-visit for the period of July 1, 2002, through December 31, 2002. Subsequent adjustments may be made every three months using three additional months of data to determine the actual average cost-per-visit. If the average cost-per-visit remains between $76.96 and $78.52 during 2002 and $76.96 and $78.52 (plus any percentage increase in the 2003 average weekly wage), then no adjustment will be made to the conversion factor. If an adjustment is necessary, the new conversion factor will be calculated by determining the actual average cost-per-visit for the period and dividing it by the conversion factor in effect for the period to arrive at the average RVP units per visit. Dividing the target average cost-per-visit by the average RVP units per visit determines the adjusted conversion factor.

(i) As an example, assume an actual average cost-per-visit for the period of July 1, 2002 through September 30, 2002 to be $70.75. The actual average cost-per-visit amount of $70.75 is divided by $4.25 (the conversion factor in effect for the period) to arrive at a quotient of 16.65 (average RVP units per visit). The target average cost-per-visit of $77.74 is divided by 16.65 units to generate the new conversion factor of $4.67 for the period beginning January 1, 2003. That new conversion factor would also be increased by the percentage increase in the state's average weekly wage for 2003, if any, and would be adopted effective January 1, 2003.

(ii) As another example, if the actual average cost-per-visit for the period of January 1, 2003, through September 30, 2003, remains between $76.96 and $78.52 (as increased by the percentage increase in the state's average weekly wage for 2003), then no additional adjustments will be made until January 1, 2004.

(b) On or after January 1, 2004, the conversion factors for occupational and physical therapy services will increase as provided by ARM 24.29.1536.

(3) If after July 1, 2002, the average cost-per-visit for chiropractic services exceeds the 2002 average cost-per-visit target of $62.90, or the 2003 average cost-per-visit target of $62.90 plus any percentage increase in the 2003 average weekly wage, the conversion factor for specialty codes 98940 through 98943, 99201 through 99204, and 99211 through 99214 will be adjusted according to the following process:

(a) An adjustment to the conversion factor for the chiropractic specialty area will be made on January 1, 2003 using the actual average cost-per-visit for the period of July 1, 2002 through September 30, 2002. A second adjustment may be made on April 1, 2003, using the actual average cost-per-visit for the period of July 1, 2002, through December 31, 2002. Subsequent adjustments may be made every three months using three additional months of data to determine the actual average cost-per-visit. If the average cost-per-visit remains below $62.90 during 2002, or below $62.90 (plus the percentage increase in the 2003 average weekly wage) for 2003, then no adjustment will be made to the conversion factor. If an adjustment is necessary, the new conversion factor will be calculated by determining the actual average cost-per-visit for the period and dividing it by the conversion factor in effect for the period to arrive at the average RVP units per visit. The percentage of the RVP units attributable to usage of the codes specified in (3) and all other CPT codes utilized during the period must then be determined. The percentage of the units other than those specified in (3) is multiplied by the average RVP units per visit and the product multiplied by the conversion factor in effect for those codes and subtracted from the target average cost-per-visit. The difference is then divided by the remaining average RVP units per visit attributable to the codes specified in (3). The quotient is the adjusted conversion factor.

(i) As an example, assume an average cost-per-visit for the period of July 1, 2002, through September 30, 2002, to be $69.60. Also assume a distribution of 91.59 percent for the codes specified in (3) and 8.41 percent for all others. Actual average cost-per-visit amount of $69.60 is divided by $4.25 (the conversion factor in effect for the period) to arrive at a quotient of 16.38 (average RVP units per visit). The 16.38 units are multiplied by 8.4 percent, resulting in a product of 1.38 units, which are then multiplied by $4.25 (the conversion factor in effect), resulting in a second product of $5.87. The $5.87 is then subtracted from the target average cost-per-visit of $62.90, yielding a difference of $57.03. The $57.03 is then divided by the remaining 15.00 units (16.38 units minus 1.38 units) to arrive at the adjusted conversion factor of $3.80 for the period beginning January 1, 2003. That new conversion factor of $3.80 would also be increased by the percentage increase in the state's annual average weekly wage for 2003, if any, and would be adopted effective January 1, 2003.

(ii) As another example, if the actual average cost-per-visit remains below the target rate for the period of October 1, 2002 through September 30, 2003, then no additional adjustments will be made until January 1, 2004.

(b) On and after January 1, 2004, the conversion factors for chiropractic services will increase as provided by ARM 24.29.1536.

(4) The conversion factor for all other codes that doctors of chiropractic are authorized to use under ARM 24.29.1572, with the exception of radiology codes, will remain at the rate received by providers licensed as occupational therapists and physical therapists.