The start of a new year brings us hope, excitement, anticipation, and…new changes in Medicare. As the year begins to unfold, we find ourselves seizing new opportunities and (attempting) to sustain our New Year’s resolution of hitting the gym every day.  On top of all of this, comes the confusion and anticipation of changes that impact Medicare reporting. Just what we needed.

Just for starters, PQRS and Functional Code Reporting are TWO SEPERATE report requirements for Medicare Rehabilitation Providers.  Here is some information to help distinguish between the two reporting programs…

Functional Code Reporting

The Functional Code Reporting became a requirement with the passing of the Middle Class Tax Relief Act of 2012. The new functional limitation reporting will be completed through non payable G-codes (similar in appearance to PQRS quality data codes).

The goal of the new program is to identify treatment efficacy of rehabilitation services in efforts to develop a new payment model for providers.  The Centers for Medicare and Medicaid Services (CMS) has developed the functional reporting requirement on the claims to gather data for future analysis on the best way to pay for services.

There is no financial incentive to report functional codes; it is a requirement that began on January 1, 2013.  To allow for a smooth transition, there is a testing period from January 1, 2013 until July 1, 2013.  Claims submitted during the testing phase will not be rejected for non-submission of functional codes. However, after July 1, any claims without the correct G-codes and modifiers will be returned and unpaid.

Any practice that provides outpatient therapy services must include on their claim forms a completed evaluation on the initial visit of the patient, every 10th visit, and at discharge.


PQRI (Physical Quality Reporting Incentive) was launched in 2007 following the passing of the 2006 Tax Relief and Health Care Act.   The goal was to encourage healthcare providers to report quality data on specific measures to collect data for future study of treatment efficacy.  The name was later changed to PQRS (Physical Quality Reporting System), and contains 144 Specific Measurements.

Originally, PQRS provided professionals with financial motivation for voluntarily reporting on certain measures.  However, starting in 2013, if therapists do not report enough quality measures (and report them correctly), they will be penalized. The punishments for incorrect data will include; having a 1.5% adjustment in their fee schedule amount in 2015, and 2.0% in 2016.

Reporting under the PQRS program are CPT codes which Therapists use to measure the services provided to a patient.

 What’s Next?

Hands On Technology is committed to creating a great user experience. TheraOffice was one of the first to adopt PQRS and had PQRI/PQRS specific features over 2 years ago.  Within our software, we have already completed some major changes for the PQRS reporting.  We have also begun working on functional reporting requirements which will allow TheraOffice users to meet the July 1st deadline.  We will have this released in plenty of time to allow all users to test and make sure claims are submitted properly with the coding.

Don’t let these new changes intimidate you.  Stay updated with our blog, Twitter, and Facebook posts for more information on these changes and for our new product features!


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