The Justice Department moved yesterday to limit the reach of the 1973 law barring discrimination against the handicapped, saying it is simply modifying policy to conform with recent federal court rulings.

The department unveiled a "prototype" rule sent to the 91 federal agencies that must draft regulations for handicapped accessibility to their programs.

"In some situations," the Justice Department said, "certain accommodations for a handicapped person may so alter an agency's program or activity, or entail such extensive costs or administrative burdens, that the refusal to undertake the accommodations is not discriminatory."

Advocates of the disabled immediately charged that the Reagan administration is retreating from its commitment to handicapped rights. They said the new policy will set a lower standard for federal agencies than for universities, hospitals, state and local governments and other recipients of federal funds.

In a letter to a disability-rights advocate last month, Vice President Bush said there would be no change in the Carter administration's broad rule interpreting Section 504 of the Rehabilitation Act of 1973. That rule requires groups receiving federal aid to make their programs accessible to the handicapped.

"The paper victory is over," said Arlene Mayerson, staff attorney for the Disability Rights Education and Defense Fund Inc.

She added that Assistant Attorney General William Bradford Reynolds "is making a liar out of George Bush."

Reynolds argued, however, that the prototype rules and a Justice Department brief filed Friday in a Georgia case merely incorporate language of a Supreme Court ruling on the anti-discrimination law.

The Georgia brief said that, while a federal law governing education rights of handicapped children requires Georgia schools to make special accommodations for retarded children, the 1973 act did not.

In effect, the Justice Department was agreeing with handicapped-rights groups on the state's obligation to provide the disabled with special services--in this case a longer school year. It was also redefining the government's reading of Section 504.

Handicapped-rights advocates are particularly concerned about the government's interpretation of Section 504, which prohibits discrimination in all aspects of life, not just education.