The rehab therapy industry is abuzz with PQRS talk right now. In case you missed it: PQRS as it exists today is dunzo. In 2017, it’ll be replaced with the Merit-Based Incentive Payment System, or MIPS. Unfortunately, though—and yes, it is unfortunate—PTs, OTs, and SLPs are not required to complete MIPS reporting until 2019. (And the jury is still out as to whether they’ll be able to voluntarily participate before then.)

All outpatient rehab therapy data-collection efforts are not lost, though. As Heidi Jannenga, president and co-founder of WebPT, pointed out in this month’s founder letter, “functional limitation reporting (FLR) is still in effect for the foreseeable future.” Of course, FLR still causes a good deal of confusion among outpatient therapy providers, even though it has been around since 2013. Thus, in the midst of all this data collection and Medicare compliance talk, I thought I’d take a moment to provide a refresher on the only national quality data reporting program currently required of outpatient therapists.

Unwrapping MIPS and the Final Rule: How to Prepare for 2019 - Regular BannerUnwrapping MIPS and the Final Rule: How to Prepare for 2019 - Small Banner

What is functional limitation reporting?

As of July 1, 2013, the Centers for Medicare and Medicaid Services (CMS) requires any provider of outpatient physical, occupational, or speech therapy services to report on the conditions and functional improvements of their Medicare Part B beneficiaries. As this article explains, CMS has been using this data “to reform future payment structures” and “better understand the beneficiary population that uses therapy services and how their functional limitations change as a result of the therapy they complete.”

Failure to correctly satisfy reporting requirements results in payment denial. And it’s tricky to amend claims, resubmit them, and get paid. Thus, it’s imperative you report functional limitations correctly from the get-go.

What is the reporting process?

For every Medicare Part B beneficiary, you as the therapist:

  1. Identify a primary functional limitation during initial evaluation.
  2. Select the G-code associated with that primary limitation.
  3. Assign a severity modifier, which indicates the extent of the severity of the functional limitation. (You determine the appropriate severity modifier based on your clinical judgement as well as the score of an outcome measurement tool.)
  4. Denote in your documentation the current status of the functional limitation as well as the projected goal.
  5. Include a therapy modifier (GO, GP, and GN) to indicate that you’re providing therapy services under an OT, PT, or SLP plan of care, respectively.
  6. Report on the current status and projected goal status at every tenth visit (or sooner should the care warrant it) in the form of a progress note. (Curious as to why you complete a progress note—not a reevaluation—in this scenario? Check out this post.)
  7. Report the discharge status and projected goal status at discharge.

Want to see an example of this process? Check out this post.

When am I required to complete functional limitation reporting?

As Jannenga and compliance expert Rick Gawenda explain in this month’s evaluation code webinar, you must report functional limitations:

  • at the outset of the therapy episode (initial visit),
  • every tenth visit (at minimum),
  • at discharge,
  • when an eval or re-eval is billed (currently applies to 97001, 97002, 97003, and 97004; will apply to CPT codes 97161 – 97168 in 2017),
  • to end reporting of one functional limitation, and
  • to begin reporting of a different functional limitation.

Those last two instances have led to a lot of tricky reporting scenarios. Learn more here.

What prompts functional limitation reporting?

In this day and age, most rehab therapists are using a documentation software. Not all of them are created equally, though. Some fail to track Medicare requirements, thus forcing you to know who to report on and when. Within WebPT, you are prompted to report functional limitations for all patients who have Medicare Part B as their primary or secondary insurance. (Patients with Medicare replacement or Medicare Advantage plans are technically commercially insured and thus, are not FLR-eligible.) WebPT then tracks visit counts and prompts providers to complete a progress note at every tenth visit. For more information on completing FLR within WebPT, check out this blog post.

Where do I access the full list of G-codes and severity modifiers?

For a full list of the FLR G-codes and a handy severity modifier chart, check out this blog post.


There you have it: a refresher on functional limitation reporting—the only Medicare-mandated quality data reporting outpatient therapy providers must complete, as of right now anyway. Now, just because FLR has been with us since 2013 doesn’t mean it can’t still confuse you. It befuddled Medicare so much that the organization continued to introduce new rules and workarounds well into 2014—and those are the people who created it in the first place! So, what about FLR is still causing you headaches? Post your questions below as comments.

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