Exploration of Functional Limitation Codes for Outpatient Physical Therapy in the Medicare Population: A Retrospective Cohort Study

Background: The Centers for Medicare & Medicaid Services (CMS) introduced functional limitation reporting (FLR) to capture patient progress in functional status in outpatient rehabilitation settings. FLR along with the severity modifier (SM) measure the effectiveness of the rehabilitation services at the physical therapist evaluation (initial examination [IE]) after 10 days of therapy and at discharge. Objective: The objective of this study was to explore the completeness of FLR codes and describe changes in SMs at scheduled checkpoints for patients receiving outpatient physical therapy. Design: The design was a retrospective cohort descriptive study. Methods: A 5% random sample of 2014 Part B fee-for-service Medicare claims for outpatient physical therapy was used. FLR codes with SMs were analyzed at required periods. The number of claims with FLR codes and SMs was calculated to describe the completeness for each period. Planned changes in SMs at the physical therapist IE (current status and projected goal status) and differences in SMs from the physical therapist IE (current status) to discharge (discharge status) were calculated. Results: For 114,588 beneficiaries, 166,572 physical therapist IE and 130,117 discharge claims were analyzed. Completion was greater than 90% for current status and projected goal status FLR codes at the physical therapist IE but was markedly lower for interim and discharge reporting (≤ 50% for all). More than 75% of claims had planned improvements in SMs at the physical therapist IE (projected goal status - current status), with variations by specific FLR codes. For the episodes with FLR codes at the physical therapist IE and discharge, improvements were reported in more than 2 of 3 episodes. Limitations: Limitations for these analyses include a missing discharge claim on many outpatient physical therapy episodes and potential coding errors with Medicare claims. Conclusions: Except for the physical therapist IE, FLR codes were not submitted consistent with regulations. Most physical therapy episodes showed improvements in FLR SMs from the physical therapist IE and discharge, although the low completion rate limited interpretation. Changes to the FLR program are warranted to understand whether changes in SMs correspond to changes in a patient's function.