question: Objective The objectives of this study were to identify functional limitations in COVID-19 patients admitted to acute care hospitals, to evaluate functional limitations by demographic, medical and encounter characteristics, and to examine functional limitations in relation to discharge destination. Design and Setting This is a cross sectional, retrospective study of adult patients with COVID-19 who were discharged from two different types of hospitals (academic medical center and a community hospital) within one healthcare system between January 1 and April 30, 2020. Participants Patients were identified from the Cedars-Sinai COVID-19 data registry who had a new onset positive test for SARS-CoV-2. A total of 273 cases were identified, which included 230 cases that were discharged alive and 43 patients who expired and were excluded from the study sample. Interventions Not applicable Main Outcome Measures Functional limitations in COVID-19 patients in acute care hospitals and the predictors for discharge disposition. Results A total of 230 records were analyzed including demographic, encounter, medical, and functional variables. In a propensity-score matched cohort based on age and comorbidity, 88.2% had functional physical health deficits, 72.5% had functional mental health deficits, and 17.6% experienced sensory deficits. In the matched cohort, individuals discharged to an institution experienced greater physical (62.7% vs. 25.5%, p<.001) and mental health (49.0% vs. 23.5%, p=.006) deficits than patients discharged home. Marital status (OR 3.17, p=.011) and physical function deficits (OR 3.63, p=0.025) were associated with an increase odds ratio of discharge to an institution. Conclusions This research highlights that functional status is a strong predictor for discharge destination to an institution for COVID-19 patients. Patients who were older, in the acute care hospital longer, and with comorbidities were more likely to be discharged to an institution. Rehabilitation is a significant aspect of the healthcare system for these vulnerable patients. The challenges of adjusting the role of rehabilitation providers and systems during the pandemic needs further exploration. Moreover, additional research is needed to look more closely at the many facets and timing of functional status needs, to shed light in utilization of interdisciplinary rehabilitation services, and to guide providers and healthcare systems in facilitating optimal recovery and patient outcomes.