From Disability Notes to Functional Performance: How Work Rehabilitation and Functional Capacity Evaluation Changed Clinical Practice July 14 2026
For much of modern healthcare, rehabilitation professionals have been asked one deceptively simple question:
"Can this person go back to work?"
Today, physical therapists (PTs) and occupational therapists (OTs) often answer that question using objective functional testing, job-specific analysis, and evidence-based return-to-work recommendations. Fifty years ago, however, the answer was usually based almost entirely on physician opinion.
The evolution from subjective disability certification to standardized Functional Capacity Evaluation (FCE) has transformed occupational rehabilitation and created an entirely new area of clinical practice. Understanding this history provides valuable insight into where the profession has been—and where it may be headed.
The 1970s: When Disability Was Primarily a Medical Opinion
Prior to the widespread development of occupational rehabilitation, physicians determined work status largely through clinical judgment. Typical recommendations included statements such as "off work for six weeks" or "return to light duty," often without objective measures of functional performance.
Physical and occupational therapists primarily provided treatment. Formal work capacity evaluations were uncommon, and reimbursement focused on therapeutic intervention rather than measuring work ability.
As workers' compensation costs escalated during the late 1970s and early 1980s, insurers, employers, and policymakers increasingly questioned whether disability decisions could be based on objective evidence rather than subjective opinion alone.
The Birth of Occupational Rehabilitation
This shift created an entirely new specialty.
Programs emphasizing work simulation, work conditioning, work hardening, ergonomic assessment, and job analysis began appearing throughout North America. The focus moved beyond treating pain toward preparing injured workers to safely return to employment.
For the first time, rehabilitation professionals were being asked not only to restore function, but to measure it.
The Most Influential Pioneer: Leonard Matheson
Among the many innovators who shaped occupational rehabilitation, Dr. Leonard Matheson stands out as perhaps the profession's most influential figure.
Matheson fundamentally changed how clinicians viewed work disability. Rather than asking, "What diagnosis does this person have?" he emphasized asking, "What can this person safely do?"
His work advanced several concepts that continue to define occupational rehabilitation today:
- Objective measurement of functional performance
- Job-specific evaluation rather than diagnosis alone
- Standardized testing procedures
- Functional rather than impairment-based decision making
- Integration of rehabilitation, vocational planning, and return-to-work strategies
Perhaps most importantly, Matheson helped shift rehabilitation from a disease-centered model toward a function-centered model that remains the foundation of modern occupational practice.
Other Major Contributors
While Matheson's influence was foundational, several other leaders significantly advanced the field.
Susan Isernhagen developed one of the earliest widely adopted standardized Functional Capacity Evaluation systems, emphasizing consistency and reproducibility.
Gary Harbin contributed to the development of the Blankenship FCE system, which became widely used within workers' compensation and disability evaluation.
Together, these innovators helped establish objective functional testing as an accepted component of occupational medicine.
Functional Capacity Evaluation Changes the Profession
By the 1990s, Functional Capacity Evaluations had become an essential part of workers' compensation and disability management.
Rather than relying solely on clinical impressions, therapists could objectively measure:
- Lifting capacity
- Carrying ability
- Pushing and pulling
- Positional tolerances
- Grip strength
- Endurance
- Material handling
- Functional consistency
The FCE became more than a clinical examination. It became an evidence-based communication tool connecting therapists, physicians, employers, insurers, case managers, and vocational professionals.
Reimbursement Evolves
As occupational rehabilitation matured, reimbursement evolved alongside it.
Initially, clinicians were paid primarily for office visits or therapeutic treatment. Eventually, dedicated reimbursement developed for work conditioning, work hardening, and functional testing.
Today, the primary CPT codes include:
- 97750 – Physical Performance Test or Measurement (commonly used for Functional Capacity Evaluations)
- 97545 – Work Hardening/Work Conditioning (initial two hours)
- 97546 – Work Hardening/Work Conditioning (each additional hour)
However, reimbursement has become increasingly regulated.
Insurers now commonly require:
- Prior authorization
- Documentation of medical necessity
- Standardized testing protocols
- Comprehensive written reports
- Evidence that testing will influence return-to-work or disability decisions
Many occupational rehabilitation programs now operate under employer contracts or bundled workers' compensation agreements rather than relying exclusively on fee-for-service reimbursement.
The Shift Toward Functional Outcomes
Perhaps the greatest change over the past five decades is philosophical.
Historically, rehabilitation focused primarily on reducing pain or restoring range of motion.
Today, healthcare increasingly measures success by participation:
- Can the individual safely perform essential job tasks?
- Can they sustain work over time?
- Can they return to meaningful employment?
Function—not diagnosis alone—has become one of the most important outcomes in rehabilitation.
Looking Ahead
Healthcare continues moving toward value-based care, where reimbursement increasingly reflects outcomes rather than volume of services.
This trend places rehabilitation professionals in a unique position.
Occupational and physical therapists possess the expertise to objectively measure function, match worker abilities to job demands, and guide safe return-to-work decisions.
The challenge for the next generation is not simply performing Functional Capacity Evaluations. It is continuing to refine them through better evidence, improved technology, stronger predictive models, and patient-centered approaches that recognize work as an important component of health and participation.