Eligible professionals who fail to complete FLR will not receive reimbursement for their services. To successfully complete FLR, therapists must document each patient's primary functional limitation and the severity of the limitation, along with the patient's goal for therapy. Providers submit this data using G-codes, corresponding severity modifiers, and therapy modifiers. They must report functional limitations (FL) at a patient's initial evaluation or re-evaluation (if applicable), at minimum every ten visits (in the form of a progress note), and at discharge.

Please note that FLR is completely separate from PQRS—another Medicare reporting initiative—even though both involve submitting quality data codes.

What is the Purpose of FLR?

The Centers for Medicare and Medicaid Services (CMS) created FLR as a mechanism for objectively demonstrating the connection between rehab therapy and patient progress. Using the FLR data it amasses, CMS will be able to better understand the Medicare population, analyze the effectiveness of the therapy treatment those patients receive, and develop intelligent payment structures for therapy services.

Who Has to Complete FLR?

All outpatient therapy providers billing under Medicare Part B must complete FLR in order to receive reimbursement for their services. This includes physical therapists, occupational therapists, and speech-language pathologists who furnish services in:

  • hospitals
  • critical access hospitals
  • skilled nursing facilities
  • comprehensive outpatient rehabilitation facilities
  • rehabilitation agencies
  • home health agencies (when the beneficiary is not under a home health plan of care)
  • private offices of therapists, physicians, and nonphysician practitioners

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To What Patients Does FLR Apply?

Functional limitation reporting applies to all patients who have Medicare proper as either their primary or secondary insurance. However, it does not apply to patients with Medicare replacement or advantage plans.

How Does an Eligible Provider Report FLR?

To successfully complete functional limitation reporting, you must designate a patient's primary functional limitation—in other words, the main reason the patient is seeking therapy—and document it along with the severity of the limitation (current status and projected goal status) at the patient's initial examination and at minimum every tenth visit or progress note. Then, when you discharge the patient, you must report the discharge status and projected goal status.

Therapists report this information using G-codes (quality data codes that describe functional limitations) and corresponding severity modifiers (codes that indicate the degree of severity for the limitation). To determine the appropriate severity modifier, therapists must consider the score of an outcome measurement tool in conjunction with their skilled clinical knowledge. Finally, therapists also must submit a therapy modifier (GO, GP, or GN) to designate whether they provided services under an OT, PT, or SLP plan of care, respectively.

On the HCFA 1500 claim form, these G-codes and their modifiers go in section D (Procedures, Services, or Supplies). Per the APTA, "All functional limitation data should be submitted on claims with a nominal charge ($0.01)."

What is the Penalty for Noncompliance?

CMS automatically will deny claims lacking FLR data. So, if you qualify for FLR but fail to successfully report on an eligible patient, you won't get paid for the services provided to that patient.

What are Some Common FLR Pitfalls?


Many therapists want an easy solution for selecting severity modifiers based solely on OMT scores (e.g., a crosswalking tool). However, the percentage of impairment you select should reflect both the results of the OMT and your clinical judgment. Otherwise, you do not account for the context surrounding a particular scenario, which results in an incomplete picture of the patient.

Misrepresenting Patient Progress

The point of FLR is to collect realistic data. The folks at Medicare are not concerned about whether your patients are demonstrating progress. At this point, all that matters is that you report the required information as correctly as possible. So, there's no reason to stretch the truth about a patient's progress toward his or her goal. In fact, if you provide false or inflated information, you could end up distorting Medicare's idea of realistic outcomes, which could negatively impact payment structures down the road.

I'm Receiving Denials from Medicare. What Should I Do?

If any of the following situations apply to you, please click the corresponding links to learn how to best handle the scenarios.

  1. Patient stops coming to therapy but ends up returning within 60 days, and you want to treat the same functional limitation.
  2. Patient is receiving treatment for two different cases from you and another therapist. You have the same specialty and you're in the same clinic.
  3. Patient is receiving treatment for two different cases from you and another therapist. The other therapist works in a different specialty (e.g., you're a PT and he or she is an OT), but you both work in the same clinic.
  4. You are treating one patient for two concurrent cases.
  5. You’re getting denials even though you’re doing everything right, and you’re frustrated as all get-out.

What's the Best Way to Ensure FLR Compliance?

Your best bet for FLR compliance is implementing an EMR with a fully integrated functional limitation reporting feature like WebPT's. That way, you'll never forget to submit a required piece of FLR information, because your EMR will remember for you.

Stop fretting over FLR.

Heidi Jannenga

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