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Functional Limitation Reporting, Part 1

What is Functional Limitation Reporting?

Functional Limitation Reporting is a new Medicare reporting program mandated to the Centers for Medicare and Medicaid Services (CMS) by the Middle Class Tax Relief Act of 2012. Beginning on January 1, 2013, the reporting was in a test phase and was optional. Beginning July 1, 2013, the reporting is MANDATORY and you will not be paid for Medicare claims that do not correctly report functional limitations of your patients. The information collected includes the patient’s function or condition, the therapy services provided, and outcomes achieved on the patient’s function or condition. In the future, CMS plans on using the functional limitation reporting to reform payments for outpatient therapy services. Also, you should note that you must report functional limitation for all Medicare insured patients, it does not matter if Medicare is their primary or secondary insurance company. In addition, all Medicare patients must have the functional limitation reporting codes used as of July 1, 2013 so if you have a patient that began in prior to July 1, 2013 and you never reported their limitations, you must use the reporting codes on the first visit on or after July 1, 2013 to get paid for your services.


Who is required to participate in Functional Limitation Reporting?

All practices that provide outpatient therapy services are required to report functional limitation reporting information on their claim forms. Functional Limitation Reporting applies to physical therapy (PT), occupational therapy (OT) and speech language pathology (SLP) services that are provided in a private office, skilled nursing facility, hospital, rehabilitation agency and home health agency (unless the patient is being treated under a home health plan of care).  Failure to comply is an automatic claim denial from Medicare.

Is Functional Limitation Reporting and PQRS the same thing?

No, Functional Limitation Reporting (FLR) and Physician Quality Reporting System (PQRS) are two separate and distinct reporting systems. Many practitioners get confused because they both use non-payable G codes for reporting purposes. Unfortunately, the similarities end there for the two reporting systems. Below is a chart highlighting the two reporting systems.

Program Detail PQRS Functional Limitation Reporting
Start Date
  • 2007 – Incentive Program
  • 2013 – Mandatory Reporting
  • 2015 – Penalty Program
  • January 1, 2013 – Test Program
  • July 1, 2013 – Mandatory Program with Penalties
Participants (Medicare Part B)
  • Eligible professionals (including PT/OT/SLP/DC) billing for outpatient therapy services in private practice setting.
  • Facility based outpatient practices are NOT able to participate.
  • All practice setting that provide outpatient therapy services (including PT/OT/SLP) furnished in all outpatient setting including facilities.
Reporting Method
  • Claims
  • Registry
  • Claims
Reporting Frequency
  • On Initial Evaluation and Re-evaluations (for Physical Therapy, codes 97001 and 97002)
  • On Initial Evaluation, at a maximum of every 10 visits (or Progress Note), on Re-evaluation, and at Discharge.
  • NOTE: The visit count resets on a re-evaluation and a new 10 visit count begins. It is not every 10 visits (ex: Visit 10, 20 30, etc)
Information Reported
  • Quality Data Code G-Codes
  • Quality Data Code Modifies (blank, 1P, and 8P)
  • Functional Limitation G-Codes
  • Severity Modifiers (CH, CI, CJ, CK,CL, CM, CN)
  • Therapy Modifier (GP for Physical Therapy, GO for Occupational Therapy, and GN for Speech Language Pathology)


When Am I Required to Report Functional Limitations?

Functional Limitation Reporting is required by Medicare as of July 1, 2013. Starting on July 1, 2013, you are required to report the functional limitation G-Codes and Severity Modifiers for all Medicare patients. If you began treating a patient prior to July 1, 2013 and never reported his functional limitations, you must include them on the patient’s first visit on or after July 1, 2013 or all claims will be automatically rejected until you report the functional limitations.

  • You are required to report two G-Codes with severity modifiers (current and goal) at evaluation (1st visit)
  • You are required to report two G-Codes with severity modifiers (current and goal) at a maximum of every 10 visits
  • You are required to report two G-Codes with severity modifiers (current and goal) at re-evaluation (visit count resets to 1)
  • You are required to report two G-Codes with severity modifiers (goal and discharge) when the patient is discharged OR to end the reporting of a particular functional limitation. NOTE: when a patient reaches their functional limitation goal (example 23% limited),  they are supposed to be discharged unless there is another functional limitation that requires treatment.


How Many Functional Limitations Are Reported?

You only report one functional limitation at a time. If the patient has multiple limitations, you still only report one functional limitation at a time. If you want to change to a different functional limitation while treating the patient, you must report the current limitation G-Code and a discharge G-Code before you begin reporting the next functional limitation on the patient’s next visit. You should never report more than one functional limitation at a time.


How Do I Report Functional Limitations?

Functional Limitation Reporting is done through the claims form. You must use the functional limitations G-Code, a Severity Modifier and a Therapy Modifier on each line of a claim form when you report the functional limitation information.


Is Any Additional Documentation Required For Functional Limitation Reporting?

Thorough documentation to support the functional limitation(s) and corresponding severity modifiers percentages that are reported is required. This should include, but is not limited to, a clear notation of the patients primary functional limitation, the current impairment level, the clinical assessment and outcome measures used to determine and track the patients impairment levels, the functional goal for the therapy services, the impairment level goal and the length of treatment needed to reach the therapy goal. The appropriate functional limitation G-Code and the severity modifier you are treating is also required in the documentation.


Do I Need A System To Track Functional Limitation Reporting?

ABSOLUTELY! You absolutely need some type of system to track functional limitation reporting. It can be as simple as a paper system where you track the visits and functional limitations on a worksheet to a computerized documentation system to a full EHR/EMR system. Remember, if you do not report functional limitation correctly, you claims will be automatically rejected by Medicare and you will not be paid for your services so proper documentation and reporting is critical.

If your office is using a paper based system, you need to add additional forms to your system to make sure you are tracking visits and documenting correctly for functional limitations. Make sure your billing software has the proper functional limitation G-Codes and Severity Modifiers installed so your claims can be completed correctly when sent to Medicare. Paper based systems will have the most trouble integrating functional limitation reporting since there are more chances of missing visit information.

If you are using a computerized documentation system, make sure they have included the proper functional limitation G-Codes and Severity Modifiers to the system along with new areas for you to document your information for functional limitations. You also want to check if the system can count visits to remind or force you to enter functional limitation information when it is required. If the system is PT/OT/SLP specific, it should be able to handle all aspects of functional limitation reporting. If the system is non-PT/OT/SLP specific, you need to carefully test the system. At PT Billing Services, we recommend WebPT for our PT/OT/SLP practices. They have an integrated solution for functional reporting that almost makes it foolproof.

If you are using a full EHR/EMR system, you will need to test it to make sure if can properly handle functional limitation reporting since most of the full EHR/EMR systems on the market are not specific to PT/OT/SLP practices. In March, we were investigating a full EHR/EMR system for a client and when we asked them if they supported Functional Limitation Reporting, they asked what it was and where could they get information about it, very scary to say the least! SO be sure to ask your vendor if they support it or have a way for you to report it, don’t assume anything.


Look for Functional Limitation Reporting, Part 2 where we will discuss the actual functional limitation G-Codes and the severity modifiers.

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