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TABLE OF CONTENTS

2014-2015 Missouri Massage Therapy Update

Chapter 1: Massage Therapy Issues in Insurance Reimbursement 1

Chapter 2: Medical Errors 44

Chapter 3: Tax Responsibilities for the Massage Therapist 56

Self-assessment answer sheet 69

Course Evaluation 70

INFORMED Page 1

Chapter 1

Massage Therapy Issues in Insurance Reimbursement(8 CE Hours)

Learning objec ves Distinguish between coverage associated with private

health insurance, personal injury insurance and workers’ compensation coverage.

Explain how personal injury and motor vehicle accidents are more likely to bring insurance reimbursement than other types of coverage.

Name the primary standardized billing form for insurance reimbursement.

Explain the role of Workers’ Compensation in cases of on-the-job injury.

List the four main steps of SOAP charting and identify the information associated with each part.

Explain what ICD and CTP codes are, and where and how they are used.

Defi ne “functional outcomes” and their signifi cance in SOAP charting.

Defi ne “scope of practice” and its relationship to insurance reimbursement for massage.

Introduc onMany would say that reimbursement for massage therapy through a client’s insurance coverage is a mixed blessing, at best. While inclusion in insurance programs can mean a steady source of income, it is associated with a daunting collection of forms and information creating a substantial amount of documentation of a specifi c nature that you will need to understand and fi ll out accurately. This is a complicated and time-consuming process, and payment is never completely guaranteed. However, many massage therapists fi nd insurance reimbursement an excellent business opportunity, once they fi gure out the process.

The potential advantages and disadvantages of working with the insurance industry will not be discussed at length in this chapter. However, a number of authors have written useful guides for industry professionals that provide more commentary on these issues. To read about this topic in greater detail, see the sources listed below:

● For defi nitions related to insurance reimbursement, see: ○ http://www.fl orida-health-insurance.com/defi n.html.

● Many free useful forms for your massage therapy business that are discussed in this chapter are available at:

○ http://www.sohnen-moe.com/forms.php. ● Diana Thompson’s “Hands Heal; Communication,

Documentation, and Insurance Billing for Manual Therapists,” is the standard in the industry.

Also see: ● The Massage Insurance Billing Manual, Julie Onofrio at

www.bodyworker.org. ● Medical Massage Offi ce Insurance Billing, David Luther and

Marjorie Callahan. ● Both the American Massage Therapy Journal (www.

amtamassage.org/journal) and Massage Magazine (www.massagemag.com) have a number of informative articles discussing the subject of insurance reimbursement for massage therapy.

The complex nature of insurance reimbursement raises many questions and issues regarding the practice and business of massage therapy and its status as a health care service. Be aware that insurance regulations vary by state, type of plan, and type of health care. This chapter will provide important basic information regarding policies, codes and procedures, but even this information may not be current by the time you review this material.

Remember, always, that your particular scope of practice, state and possibly your region of the state may be governed by specifi c guidelines of which you need to be aware. Because of these professional and regional differences as well as the current state of fl ux regarding the status of massage therapy in mainstream health care, you will need to adjust your practices and procedures accordingly. Changes occur every year.

In some cases, massage therapists discount their prices or sign restrictive covenants in exchange for reimbursement. These are individual choices each practitioner must make for him or herself. Insurance billing can be time-consuming, costly and diffi cult. You will likely spend more time on the phone, writing notes and e-mailing to follow up your claims. All communication with doctors and insurance agents must be clear and well documented. On the other hand, once you have incorporated certain practices related to documentation and follow-up into your practice, you will fi nd there is some order to the system.

A changing fi eldInsurance does not pay for relaxation or preventive therapeutic massage. It is reimbursable only as a treatment for rehabilitative purposes. Insurance companies navigating the poorly defi ned boundaries between “wellness massage” and what is coming to be known as “medical massage” do not have well-forged ways to determine who is or is not qualifi ed to provide these services.

In December 2004, the AMTA requested specifi c CPT (current procedural technique) codes be developed and approved by the American Medical Association for the evaluation and assessment of massage by massage therapists. This way, massage therapists will have specifi c codes to correctly bill for those procedures. This will help insurance companies recognize the legitimate reimbursement claims of massage therapists. Evaluation and reevaluation codes currently exist for the fi elds of physical therapy, occupational therapy and athletic training.

According to the American Medical Massage Association (AMMA), medical massage is:

“A system of manually applied techniques designed to reduce pain, establish normal tissue tension, create a positive tissue environment and to normalize the movement of the musculoskeletal system. Medical massage is a scientifi cally based method of manual therapy that seeks a clear understanding of the scientifi c principles of physiology that affect connective and soft tissue healing and treatment.”2

This defi nition distinguishes between therapeutic massage as a preventive therapy and medical massage, a treatment specifi cally directed to resolve conditions diagnosed by a physician.

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Medical massage organizations like the USMMA (formerly the AMMTA) have developed a program for a nationally certifi ed medical massage therapy, with an exam offered by list of approved providers. Medical massage typically utilizes physical therapy codes.

Many massage practitioners feel well within their scope of practice providing massage treatment without this extra training or additional certifi cation, a situation that has created some confl ict and tension within the fi eld. Even individuals with this additional training, however, will likely fi nd a brief education in the insurance system and understanding of common policies is important, ensuring practitioners know if and when they will be reimbursed. This chapter will furnish some of the information that can facilitate your management of a complicated system.

This chapter will help you determine: ● What services are within your legal scope of practice. ● How to bill for your services which types of insurance will

reimburse for manual therapy in your state. ● What modalities are covered and what current procedural

technique codes correspond with them. ● How to verify treatment and show improvement using

functional outcomes.

Types of medical coverageA brief introduction to different types of medical coverage follows. A plan may be a part of private health insurance, personal injury insurance, or workers’ compensation coverage. You will fi nd different types of insurance vary in the degree to which they accommodate insurance reimbursement for massage therapy. Motor vehicle and job injuries, for example, as well as managed care in certain states, have historically been more receptive to reimbursement for massage treatments. This will be discussed in more detail later.

Insurance coverage takes many forms, differing in countless variables, including for example, the manner in which the insured chooses a physician or hospital, the amount and types of injuries covered, and details regarding fees and co-payments, etc. Large companies, like Blue Cross and Blue Shield, for example, offer a variety of different plans and products, including, for example, indemnity, major medical, managed care and self-insurance programs, among other options. In dealing with insurance reimbursement, you will need to be able to identify exactly the type of coverage your client has.

Private health insurancePrivate health insurance is perhaps the most infl exible or resistant regarding policies for reimbursement to massage professionals. In some cases, insurance will cover manual therapy only if the treatment is provided by a specifi c type of caregiver, for example, a physical therapist or nurse. Some states are much more progressive in their policies. For example, the state of Washington has implemented legislative action to include a range of categories of health providers under specifi c provisions. Industry professionals anticipate a great deal of change in the next decade regarding the status of massage therapy as a standard medical modality included in health plan coverage.

Major medical and indemnityMajor medical and indemnity insurance policies are the more traditional health care policies that existed before managed care options were available. They typically refer to a health insurance plan with a high maximum benefi t, and with comprehensive

rather than scheduled benefi ts. Major medical insurance and indemnity insurance are typically only purchased by a small percentage of the population.

Major medical and indemnity (also called fee-for-service) are kinds of coverage that allow the insured individual to use any provider he/she chooses, with no restrictions regarding physicians or hospitals. Major medical insurance typically covers the expense of major illness or injury, with relatively high maximum benefi ts and deductibles. The carrier pays for any medically necessary services specifi ed in the policy to any type of provider.

Unlike PPO or HMO plans, there is no list or network for health care personnel. The only restrictions relate to provider licensing and treatments not excluded from coverage. Typically, the insurer pays the provider directly, or in some cases, pays the insured fi rst and the insured pays the provider. Most indemnity plans cover a specifi c percentage of customary and reasonable expenses after a deductible. The insured is responsible for the balance.

In most states, major medical and indemnity insurance have pre-established limits for medical services to specifi c providers. In Florida and Washington, major medical and indemnity insurance companies may not limit their payment for medically necessary services to only physicians or physical therapists and are required to pay for medical massage treatments. Only these two states require major medical and indemnity insurance to pay licensed massage therapists for medically necessary massage.

Major medical/indemnity plans that pay massage therapists will always require the injured to pay the deductible and a percentage of the medical bills. A deductible is the amount the injured party has to pay before insurance will pay any portion. A percentage is a set proportion of the total charges insurance pays after the deductible has been paid by the insured. The massage therapist is typically responsible for collecting from the injured individual any balance not paid by insurance.

Once a deductible is paid for major medical and indemnity policies, the insurance pays from 75-90 percent of the bill, leaving the individual with the remaining amount.

Managed care organiza ons (MCO)The majority of people belong to managed care organizations (MCO), which come in a variety of types, including HMO, PPO, EPO and POS, among others. Managed care organizations are responsible for coverage outlined in the MCO’s “evidence of coverage,” a document stating that they will only pay contracted providers according to specifi c guidelines. Managed care sets limits on fees, what types of services are covered and who supplies the services. In addition, managed care programs typically require a referring HCP (health care provider) to administer and coordinate care with other health care providers.

In most states, MCO will not pay for massage treatment, even if a physician advises or prescribes it, because the system is simply not set up to reimburse massage therapists, as they are currently defi ned. Florida and Washington have laws requiring managed care organizations to include massage therapists as preferred providers for medically necessary massage when it is prescribed by an approved contracted provider. A number of professional organizations, such as the United States Medical Massage Association (USMMA), for example, are pursuing changes in the status of certain types of massage. See www.usmedicalmassage.

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org for current information on the status of compliance for managed care organizations paying massage therapists.

Health maintenance organiza ons (HMOs)HMOs are health delivery systems that offer comprehensive health coverage for hospital and physician services for a prepaid, fi xed fee. HMOs contract with or directly employ participating health care providers, including hospitals, physicians and other health professionals, and health maintenance organization (HMO) members choose from among those providers for all health care services. Injured individuals who are members of an HMO must use only HMO providers within their network. HMOs are one of the most popular and fastest growing forms of health care coverage in the country. There are many different types.

A health maintenance organization (HMO) plan typically requires that the insured select a primary care physician (PCP) from within the HMO provider network. This person is responsible for meeting the insured’s health care needs, either by treating him/her directly, or by referring him/her to other providers (such as specialists). Some HMOs operate their own facilities, staffed with their own salaried doctors, while others contract with individual doctors and hospitals to be part of the HMO.

HMOs usually have no deductibles or plan limits. For each visit, the user pays a small fee or co-payment. As long as the insured sees the PCP or has an authorized referral to another provider, the insured’s out-of-pocket cost is the relatively small co-payment per visit. If the insured chooses to go to another provider without a referral, however, regardless of whether the providers are or are not in the HMO network, the insured will be required to pay the total cost of the provider’s bills. Exceptions, such as emergencies, may be covered by the plan. HMOs require the insured use the HMO’s doctors and facilities, as medical services outside the system are not covered.

HMOs vary enormously in contractual relationships with providers, reimbursement methods and the use of discounted or capped fees for treatment. Providers may be asked to accept discounted or lower-than-normal fees (affi nity plan) for their services. You may be asked to “bundle” all services into one fee (global fee schedule), and provide sessions or a treatment schedule dictated by your client’s insurance coverage requirements, rather than what may be best for his/her health.

Preferred provider organiza on (PPO)A PPO is a preferred provider organization; a group of providers who have joined together, negotiating their rates for treatment with various health plans. PPOs are similar to the traditional fee-for-service (indemnity) programs, except that they primarily contract with independent providers. They were initially developed to provide some fl exibility within an increasingly rigid system, bridging the gap between traditional indemnity insurance and the sometimes very limited HMO.

There are several national PPO organizations, and many local or regional PPOs. In some cases, regional or local PPOs provide better rates and more extensive provider coverage than national organizations. The PPO provider that the insured plan utilizes is important, because ultimately, it dictates where the injured will get care and how easy access to that care will be.

PPO selection is based not only upon cost, but also on provider access and the quality of organizations that are part of the

PPO. Some PPO plans require primary care provider referrals, deductibles, and coinsurance, while other PPO plans offer co-pay benefi ts with no deductible for certain services. Unlike HMOs, PPOs utilize deductibles and plan limits, and may offer several different plans, ranging from the highest (full coverage) to the lowest (higher deductibles) cost.

A PPO plan encourages the insured to choose doctors, hospitals and other providers that participate in the plan by increasing the portion of the bill they pay if the insured stays “in network.” The insured may choose to go “out-of-network” at any time, but if so, will have to pay a higher percentage of the provider’s bill. Services other than the most basic medical offi ce visits and emergency care usually require pre-authorization by the PPO before any treatment commences. Many PPOs require a primary care physician (PCP) take responsibility for coordinating the insured’s medical care. In many cases, each member of the network of doctors and hospitals agrees to accept a discounted fee for their services from the plan.

EPOAn exclusive provider organization (EPO) plan is very similar to an HMO. With an EPO, the insured must select a primary care physician or physician “gatekeeper” who will be responsible for meeting the insured’s healthcare needs. In most EPO plans, as with an HMO, if the insured chooses to go out-of-network, he or she will have to pay 100 percent of the provider’s bills. Exclusive provider organizations (EPOs) are similar to PPOs, but only reimburse members for services rendered by providers in their network. A PPO may also make an EPO option available to payers.

In simple terms, an EPO is a much smaller PPO that offers a very limited number of providers, each of whom offer deeper discounts on their rates so they will see a higher volume of patients. This type of organization is becoming more popular, as it courses a middle road between an HMO and PPO. EPOs can be set up in many different ways.

POSPOS stands for point of service plan. This is a variation of the HMO and EPO plans that is often described as an “open-ended HMO.” POS plans operate a lot like HMOs, but allow the insured individual to choose a doctor or hospital each time he/she needs care. As with an HMO, the insured must pick a primary care physician within the network. Unlike an HMO, the insured may opt out of the network, but will usually have to pay a sizable deductible, with the plan paying 60-80 percent of the bill. The remainder of the bill must be paid by the individual out-of-pocket.

IPAIPA, or independent practice associations, are loosely organized networks of doctors who practice out of their own offi ces, treating either IPA or non-IPA patients. Usually, IPA coverage is available only to groups, with, in most cases, a small copayment for each visit. Under the IPA plan, some of the doctor’s income may depend on the plan’s success or effi ciency. Participating doctors often share in any losses the plan sustains or in any profi ts the plan makes.

FMCFoundations for medical care (FMC) are physician organizations established by county or state medical societies. FMC operate similarly to IPA, in that they are composed of physicians

Page 4 INFORMED

practicing individually or in single specialty groups. FMCs were the forerunners to IPAs, providing physician and hospital services to specifi c employers. In the past few years, some FMCs have also developed HMO, IPA and PPO options.

Federal coverageFederal health insurance resources include the Health Care Financing Administration (HCFA), which is part of the U.S. Department of Health and Human Services. HCFA administers Medicare and Medicaid. No federal insurance programs, including Medicaid, Medicare, military programs like Champus and ChampVA, Federal Employees, or Group Trust pay massage therapists. Until uniform national standards are established and recognized by ERISA (the federal act governing federal employee insurance), each state will likely maintain its own licensing requirements.

Personal injuryPersonal injury insurance claims are often related to automobile accidents (also known as MVA, motor vehicle accidents). In dealing with auto insurance carriers, you will need to be aware of the following types of coverage: Personal injury protection (PIP) and medical payments (MP or MedPay), secondary PIP or MedPay, third-party coverage (BI or bodily injury), and uninsured or underinsured motorist coverage (UM/UIM).

Massage therapists may be able to bill personal injury insurance for medically necessary treatments in cases of negligence. If manual therapy is required, it may be covered under the at-fault party’s liability insurance. Treatments may be required until the client is returned to pre-injury status or reaches maximum medical improvement.

Auto accidentsMillions of people are injured each year in motor vehicle accidents. Most accidents are decided according to the law of negligence. An individual who negligently operates a vehicle may be required to pay any damages caused by their negligence, both to person and property. Drivers are required to exercise “reasonable care” according to the circumstances. Failure to use reasonable care is typically the basis for damages paid out in auto accident lawsuits.

Auto accident coverage forms a type of hierarchy: Typically, each individual involved in an auto accident relies fi rst on his/her own policy’s medical benefi ts, regardless of who owns the auto involved in the accident. If the injured does not have his/her own medical benefi ts, coverage is pursued from the medical benefi ts of the owner of the auto in the accident. If there are no medical benefi ts (PIP/MedPay) covered, or they are already used up, the liability coverage (bodily injury or BI) of the negligent party is pursued. When a motorist is not negligent and none of these resources are available or suffi cient, the motorist’s own UM/UIM (uninsured or underinsured motorist) or the UM/UIM of the owner of the auto in the accident will pay. Additionally, if the auto accident occurred while the injured was working, his/her on-the-job injury insurance may be liable for paying medical expenses.

There are two main categories of auto insurance: fi rst-party and third-party coverage. First-party coverage covers medical expenses for the insured individual, while third-party coverage is used to pay for injuries sustained to others, regardless of whose vehicle was involved in the accident. In general, third-party coverage refers to the liability coverage of the negligent or at-fault individual. Some insurance companies pay health care

expenses directly when it is clear who was negligent. In many cases, however, health care providers have to wait until the case is settled, at which time liability is determined. The time limit for this process varies in each state, but can be a period of years. It is useless to bill third-party insurance until fault is determined.

No-fault insurance versus tort systemAs a response to lengthy, costly court battles regarding fault in specifi c auto accidents, a number of states, including Florida, Colorado, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah, adopted no-fault insurance laws (sometimes referred to as personal injury protection or PIP). No-fault insurance requires medical health care benefi ts be included in auto insurance policies to cover medical expenses incurred both by individuals driving, riding as passengers, in the policy-holders car, and any pedestrian hit by the policy-holder’s car, regardless of fault.

There are two factors that give massage therapists a claim to third-party insurance reimbursement: the fi rst is your status as an ancillary health care provider, defi ned by the qualifi cations outlined in your scope of practice, and the second is the specifi c terms of coverage in the relevant policy. Auto accident insurance law allows for ancillary providers to provide prescribed and medically necessary treatment in injury cases. Massage therapy is recognized as medically necessary for injury in motor vehicle accidents if you can verify treatments and show improvement.

Under a no-fault system, when you have an accident, your auto insurance provider automatically pays for your damages, regardless of fault, up to a specifi ed limit. In exchange for this guaranteed payment, you must forego some of your rights to sue the other driver involved in the accident. By the same token, you are also protected from being sued in the event you are at fault in an accident. There are elements of no-fault in all auto insurance coverage.

Some states have switched from a no-fault system to tort. A tort is a civil wrong that is not a crime. Under tort auto insurance, someone has to be found at fault for causing a crash, and that person is responsible for payments. The no-fault system is intended to lower the cost of auto insurance by taking small claims out of the courts. Each insurance company compensates its own policyholders for the cost of minor injuries regardless of who was at fault in the accident. These “fi rst-party” benefi ts, which are a mandatory coverage, vary by state with no-fault systems. In states with the most comprehensive benefi ts, a policyholder receives compensation for medical fees, lost wages, funeral costs and other out-of-pocket expenses.

The term “no-fault” can be confusing because it is often used to denote any auto insurance system in which each driver’s own insurance company pays for certain losses, regardless of fault. In its strict form, the term no-fault applies only to states where insurance companies pay “fi rst-party” benefi ts and where there are restrictions on the right to sue. Drivers in no-fault states may sue for severe injuries if the case meets certain conditions. These conditions are known as the tort liability threshold, and may be expressed in verbal terms, such as death or signifi cant disfi gurement (verbal threshold), or in dollar amounts of medical bills (monetary threshold).

Typically, states require drivers to carry some minimum level of liability coverage, specifi ed in both per-person and per-accident terms (for example, $10,000 per person/$20,000 per accident). Thus, the insurance company of the at-fault driver will compensate

INFORMED Page 5

a third party for the losses sustained in an accident up to the policy limits. The at-fault driver’s own insurance covers his or her own injuries (for example, MedPay) and property damage (for example, collision), assuming he or she chooses to carry such insurance.

The table below summarizes differences in liability standards and insurance coverage by type of damage under typical no-fault and tort insurance systems.

Liability and Insurance Coverage Under No-Fault and Tort3

Tort No-FaultFirst-Party

Optional MedPay or other fi rst party health/disability insurance coverage.

Compulsory PIP coverage.

Third-partyFull liability/compulsory BI insurance.

No liability below statutory PIP limits/compulsory BI insurance for damages above PIP limits.

Full liability/compulsory BI insurance.

No liability below statutory threshold/compulsory BI insurance for damages above threshold.

PIP/MedPayThe medical benefi ts portion of the auto insurance plan in no-fault states is known as personal injury protection (PIP or MedPay). Personal injury insurance covers bodily and property damage and may be related to auto insurance (motor vehicle coverage is common), a homeowner’s policy, or commercial building insurance. Motor vehicle and personal injury coverage may allow payments for medically necessary services as long as the insured can verify treatment and show improvement.

Personal injury protection (PIP) provides coverage for medical and other expenses resulting from certain types of accidents, for people specifi ed in the policy, regardless of who is at fault in the accident. In some recent cases, some insurance companies have redefi ned PIP coverage as limited to the policyholder’s family members only. In some states, like Washington and Florida, PIP is required, but a person can elect not to purchase PIP if they can prove they have other health insurance coverage and sign a waiver rejecting PIP. PIP policies usually have a time limit for which services can be billed that varies in each state. When it comes time to settle the case, insurance companies and lawyers will scrutinize health care services.

PIP covers, within specifi c limits, the medical and hospital expenses of the insured, others in the insured’s vehicles, and pedestrians struck by the insured. It will cover the insured’s own injuries on a fi rst-party basis, without regard to fault. This is only available in certain states. PIP is relatively open to reimbursement for massage therapy in that you do not have to wait for fault to be determined. You are required to prove that care is reasonable and necessary treatment for injuries and that a referring health care provider prescribed the treatment as medically necessary.

Many levels of PIP coverage are available for purchase, with each state determining its own provisions for the amount of PIP coverage that must be purchased and the standard length of time this coverage is provided. No-fault insurance is the bare minimum as far as insurance benefi ts are concerned. Full coverage requires further types of essential coverage, including bodily injury,

uninsured motorist, and collision. In some states PIP must be purchased, by law; in other states, it is optional. PIP is often mandated by states that have “no fault” laws.

Florida and Washington are the only two states in which massage therapists are included as contracted providers under this plan. In other states, it may be possible to get payment through an organization in your area, but it is much easier in Florida and Washington. Even in Florida and Washington, however, massage therapists do not always get paid simply because this is the law.

Medical payments (MedPay) covers medical expenses to the injured insured in case of an accident and his/her injured passengers. It also covers pedestrians injured by a vehicle. Coverage is not based on fault, but is limited to the specifi c terms of the policy. MedPay is typically purchased with auto insurance coverage. The amount required varies by state.

States without no-fault laws are under a tort law system. Insurers in tort states may offer MedPay as optional insurance. Customers who choose not to purchase medical benefi ts must by law sign a waiver to show they are opting out of purchasing medical benefi ts and are aware of their potential liability in an accident. Because MedPay premiums are relatively inexpensive, the vast majority of policyholders typically pay MedPay coverage. Both PIP and MedPay make regular payments while the injured individual is under medical care.

If there is no PIP coverage, MedPay may cover massage services, but MedPay generally covers a lower dollar amount than PIP, and covers only medical expenses. Neither PIP nor MedPay are affected by the determination of who was at fault in the accident. In some cases, injuries sustained by your client in an accident may be covered by one or more PIP or MedPay policies.

For example, if Joe, a passenger in Tom’s car, is injured in an accident, Tom’s insurance will pay for medical expenses as the primary insurer, even though Joe has car insurance. Once Tom’s insurance is used up, Joe’s PIP insurance coverage can be used as a secondary PIP insurer if additional medical services are required. If Joe does not have PIP or MedPay and Tom’s PIP is used up, Tom’s health insurance becomes the secondary insurer.

Bodily injury (BI) liability coverageThe majority of states require drivers to carry bodily injury (BI) insurance (also called third-party coverage), a type of liability insurance that covers the liability of the negligent or at-fault party for injuries sustained in an auto accident, covering the insured against claims for damages made by third parties up to some specifi ed limit. The injured party typically seeks the negligent party’s BI coverage to pay a settlement when there is no coverage for medical benefi ts, or the coverage is not enough to cover needed services or care. Insurance companies may also go after BI coverage to recover PIP or MedPay expenditures paid by the not-at-fault insured’s policy.

BI, unlike PIP and MedPay, which are typically paid as expenditures are accrued, is sometimes paid out in a lump-sum settlement payment after the injured individual has reached maximum medical improvement (MMI) or the medical benefi ts coverage is used up and all medical bills have been submitted to the injured individual’s lawyer. In some cases, a settlement will also include additional money for pain and suffering, permanent impairment, future medical needs and/or lost wages. BI settlement includes deductible and copayment fees.

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Some states require BI insurance only; others require PIP; others require both; and some states require neither type of insurance. If the negligent party is insured, it is likely that BI will be available. Health care providers who wait for a BI settlement should know about a letter of protection lien; a document signed by the injured individual and the attorney, designating the injured party as a creditor against the forthcoming settlement.

There are two types of third-party liability policies: bodily injury and property damage. Bodily injury liability pays other people for damages the policy owner has done to them, such as medical expenses, lost wages and pain and suffering; property damage pays other people for damages done to their property. If someone fi les suit against the policy owner as a result of a car accident, these policies will provide monetary protection up to the limit of the policy.

Liability refers to the amount the insurance company is “liable” for in cases where the individual caused an accident. It is shown on the “Declarations” page of a policy. This coverage is typically shown with a slash (“/”) separating two numbers, such as: 25/50, or 100/300, where the fi rst number is the dollar amount (in thousands) of total coverage in the event that one person is injured or killed, and the second number is the total dollar amount (in thousands) for an entire accident. This coverage also handles legal expenses involved in settling lawsuits.

Uninsured and underinsured motorist (UM/UIM)In cases where neither medical benefi ts or BI are available, the injured individual may seek benefi ts based on uninsured/underinsured motorist benefi ts. UM/UIM coverage is described by the same notation as bodily injury coverage (e.g., 100/300):

Uninsured, or “UM” coverage: An automobile coverage allowing for recovery when one is injured due to the negligence of another, when that at-fault party does not have liability insurance coverage (BI).

Underinsured, or “UIM” coverage: An automobile insurance coverage where one may make a claim to recover damages in excess of the policy limits of the negligent party.

UM/UIM coverage pays the policy owner and his or her passengers for pain and suffering, lost wages, etc., in the event that the driver at fault cannot be found (as in a hit-and-run), has no insurance or has too little insurance to cover the damages. It is unlikely that the driver at fault will have enough coverage to pay the damages resulting from a serious accident. Further, while other policies can combine to offer the same kind of coverage as UM/UIM, there are several advantages to this type of coverage: UM/UIM is more comprehensive than most health or disability plans; it can cover loss of limb, pain and suffering, funeral expenses, etc.; it has much higher coverage than other types of medical-expense car insurance, such as MedPay and PIP, and it is relatively inexpensive.

Many states require this UM/UIM coverage to protect an individual against a negligent person without liability insurance coverage or with minimal coverage that is not able to appropriately compensate an injured individual. In an accident with an uninsured negligent individual, a claim would be made on the insured’s own policy based on uninsured motorist coverage. The injured individual’s insurance carrier would pay any judgment rendered, up to the limits of the specifi c policy purchased by the insured.

If the person who caused the accident has liability insurance but the policy limit of that liability insurance is less than the uninsured

motorist coverage of the injured party, an additional claim may be made under the injured individual’s policy for underinsured motorist benefi ts, in case the injured individual’s damages exceed the limits of the other party’s liability coverage. Case law determines how these benefi ts are paid, with the maximum amount of recovery varying widely according to the facts of the case. Auto medical plans almost always have portions of medical bills that must be paid by the injured individual in the form of deductibles and a percentage of fees.

Workers compensa on and job injurySince 1948, all states have had some form of workers’ compensation in effect. Through this legislation, employers agreed to provide medical and indemnity (wage replacement) benefi ts to workers. The main objective of workers’ compensation is to provide necessary medical benefi ts and return the employee to work, quickly and safely, with little potential for re-injury. In recent years, workers’ compensation has become the primary remedy for the injured worker. It also protects employers from damage suits fi led by the injured worker.

The Workers’ Compensation Division is responsible for the administration of the Workers’ Compensation Law, which ensures proper payment of benefi ts to employees injured on the job and encourages safety in the work place. The main function of the division is to ensure proper payment of compensation benefi ts along with necessary medical attention to employees injured on the job or their dependents in case of death. The division also administers the rules and regulations for individual self-insurers and group self-insurers.

Each state has an on-the-job insurance plan available through the Department of Labor and Industries (sometimes called L&I insurance) or workers’ compensation program (WC). All 50 states allow massage therapists to bill insurance companies for massage sessions, for individuals who were injured on the job (WC and L&I). All injuries occurring at work must be processed through Workers Compensation or Labor and Industries, including all motor vehicle accidents that occur during working hours.

Unlike auto medical coverage, WC medical benefi ts are not limited to a particular dollar amount. Instead, benefi ts are paid for medically necessary treatment of an injury or injuries, as well as continued medical necessary care or services, as well as a percentage of lost wages, settlement damages for pain and suffering or permanent impairment. WC settlements typically include an agreement where WC covers continuing care, and may provide in some cases a lump sum for damages. WC and L&I require no deductible or co-payment amounts. Once an offer is made, no additional amounts beyond the WC or L&I payments are available to the injured individual. He or she must accept what the insurer pays.

While workers compensation allows ancillary providers to provide prescribed and medically necessary treatment in injury cases, there are strict limits regarding the qualifi cations of providers and the services covered. In most cases, payments will not be made until the massage contractor is accepted by the state’s job injury insurer. WC and L&I plans do not require the massage therapist to collect any money, as there is no deductible required from the injured party with payments made in full by the insurance company. WC or L&I also typically limit the number of treatments or sessions allowed.

Medical benefi ts and limits vary by state, and each state has its own guidelines for application and claim fi ling. You will need a copy of provider regulations for your fi eld and an application for

INFORMED Page 7

a provider number. Investigate what guidelines you must follow for provision of massage therapy services. You may be required to apply to become a provider in that particular state and abide by providers’ contractual obligations. To investigate what guidelines you must follow for provision of massage therapy services, contact your state labor board and ask the following questions.

● What is the process for becoming a preferred provider? ● Can I work anywhere outside of a doctor’s offi ce? ● Does treatment require doctor supervision or oversight? ● Do I need a referral or prescription to begin work? ● What documentation is required? ● What is the fee schedule? ● Do I need an authorization code? ● What are the CPT code requirements for treatment? ● How many sessions are allowed? ● What is the required billing process and what documentation

is required with billing?

To perform services as massage therapist your work may need to be carried out at a doctor’s offi ce or be supervised by a doctor. Many labor boards post provider fee schedules and service manuals that guide billing procedures.

How to become a preferred provider Washington and Florida are the only two states that widely accept massage therapists as contracted providers in the health care system. To have massage therapy services covered by an HMO or PPO, the massage provider will need to become a provider within that organization and follow its rules and regulations. The majority of states (excluding Washington and Florida) do not recognize massage therapists as health care providers. Recognition will likely become more common in more states as new legal decisions and precedents are set.

Contact your state insurance commissioner’s offi ce or local health insurance companies to fi nd out what is involved in becoming a provider. You may require a certain minimum amount of liability insurance or be in practice for a number of years to qualify. You are also typically subject to privacy regulations at your workplace and must have access for individuals with disabilities.

You will be asked to undergo an assessment or credentialing process with a review consisting of the following:

● A completed application. ● Professional references. ● Work history. ● Proof of educational history (including educational certifi cate,

continuing education credits completed, etc.). ● Proof of licensure. ● Proof of liability insurance. ● Proof of registration/certifi cation. ● Proof of professional affi liations. ● Signed contract agreeing to company policies and

requirements for services (including “hold harmless” clause). ● Pass a background check for any complaints or disciplinary

action. ● Review of client records. ● Inspection of work site. ● Accessibility of workplace.

Additionally, you may have to attend lessons, relating to aspects of billing or recordkeeping, for example, and participate in certain programs annually to maintain approval. You may be required to take SOAP charting classes or purchase liability insurance

coverage. Some of these quality-control programs require random auditing of treatments. Know that once you have signed a contract with the company, you are required to follow their rules, so read all contractual agreements carefully and have a lawyer review everything. Ascertain what requirements you must fulfi ll each year to maintain credentialing.

You should also be aware that the insurance company will determine which codes and services you are allowed to provide. In some cases, practitioners are required to take all injured individuals sent their way. If you can, it is useful at this time to learn what specifi c CPT codes you will be allowed to bill, the fees associated with each type of code, and how many units of each type of code will be covered. In most cases, an injured individual is required to have a referral/prescription from a primary care physician (PCP) who is responsible for diagnosing the condition. Massage services will only be covered in cases of injury or poor health for rehabilitative purposes, not for relaxation, stress-reduction or wellness massage.

Insurance companies may deny payment for forms fi lled out incorrectly or lost. Learn what you must submit to the insurance company to secure payment, and realize you will probably be fi lling out more paperwork and following up with more phone calls. Insurance companies may also close their provider lists, allowing only a limited number of massage therapists to provide services for their network. Ask the same list of questions you asked the state labor board, previously listed in this chapter.

If you become a preferred care provider with an HMO or PPO, you should know that you probably will not be reimbursed for the full amount of your fees. Each insurance company determines what it will pay for massage therapy services. If you contract with the insurance company and your fee is higher than the specifi ed amount allowed by insurance, you are not able to bill the difference to the injured individual you are treating. The managed care organization may also adjust the amount they pay at any time without notice, and may also require additional qualifi cations regarding payment. [Some massage therapists feel insurance companies are continually making it harder to get paid and decreasing policy benefi ts for massage therapy treatments. For further information, see www.bodyworker.org, which provides a calculator to estimate the cost per client.]

UCRUCR refers to “usual, customary and reasonable fees” associated with a specifi c CPT code. These are amounts set by insurance companies for services and supplies that are medically necessary, recommended by a doctor or required for treatment. Every insurance carrier has a payment rate for each test, procedure and medical service. The rates are what the insurer has decided are appropriate for these services in the specifi c area. Health plans have different methods to determine what is usual and customary, but most insurance companies establish UCR fees according to the following criteria:

● A “usual” fee is the fee that an individual provider most frequently charges for a specifi c procedure.

● A “customary” fee is the fee level determined by the administrator of a benefi t plan from actual fees submitted for a specifi c procedure. This fee establishes the maximum benefi t payable for that procedure.

● A “reasonable” fee is the fee charged by a provider for specifi c services or treatment that has been modifi ed by complications or unusual circumstances. Therefore, it may differ from the provider’s usual fee or the benefi t administrator’s customary fee.

Page 8 INFORMED

The concept of using UCR fees to determine how much to reimburse patients covered by insurance for specifi c treatment was introduced by the insurance industry in the early 1960s. The Health Insurance Association of America (HIAA), an organization of 380 health insurance companies, surveys health care providers every year regarding their fees. The fee survey helps insurance companies set UCR fees. However, insurance companies are not legally required to use HIAA’s fee survey or anyone else’s information when setting UCR benefi t levels. In fact, reimbursement calculations by insurance companies are unregulated and uncontrolled.

Unfortunately, UCR rates may be outdated and may not cover all costs. UCR fees are infl uenced by the fees providers charge in various geographic areas and by the population size. Geographic differences may not be fairly taken into account. For example, if a large city and a small town are considered to be within the same boundary, large discrepancies in fees may exist. UCR fees widely vary among carriers, and no two carriers use the same UCR defi nition. Additionally, carriers use different methods and time frames to determine UCR rates. Customary fee determinations made by carriers for the same procedure in the same city at the same time can vary enormously.

The process of billing through insurance companies is fraught with obstacles. Fee schedules with UCR may seem irregular or unreasonable. Even worse, individuals who contract with L&I and WC do not report the most positive results when requesting assistance. Procedures vary from policy to policy and insurance company to insurance company. You may be asked to charge lower fees for your services or wait months or years for payments. You may fi nd you have to pick and choose cases carefully, taking them on only when you feel with some certainty you will get paid. The more you learn, the better you will be at establishing boundaries and choosing with which clients to work.

Preverifi ca on of insurance coverageThis section will outline the process for patient preverifi cation of insurance coverage, reviewing the information required and the forms or documentation associated with each step. In this process, you will fi nd out what services or treatments are covered by the individual’s policy, the actual dollar amount of available benefi ts, whether you, as a massage therapist, qualify for payment, and the information necessary to fi ll out the claim form correctly.

This is the most important step in insurance reimbursement and can potentially save you an enormous amount of wasted time and energy. For example, if you started treating a new patient without proper verifi cation of insurance coverage, it might be weeks, if not months, before you learned that the patient’s insurance does not cover your services, benefi ts are already used up by other medical services, or the patient does not have the coverage he/she thought. By that time, you might have billed the individual hundreds of dollars that you will not get.

The fi rst time you speak to a potential patient, use Form A: Patient Questionnaire (Figure 1). Find out the name of the physician and his/her area of specialty, who the attorney is, and the basic insurance information according to the guide.

In gathering information for the verifi cation process, you will fi nd a number of people particularly helpful in collecting accurate details. These individuals include:

● The prescribing physician’s billing secretary. ● The paralegal or secretary of the attorney, if an attorney is

connected to the case.

You may also need to contact: ● The insurance company representative. ● The referring health care provider (HCP). ● The attorney. ● Human Resources personnel, in cases where insurance is

provided through the individual’s work.

Many of these people have secretaries or assistants working with them who you will need to contact. Have all billing information and forms available when you make these calls, so you can quickly refer to any details you need, and take careful notes. It is useful to record the date as well as the name and title of the individual with whom you spoke, as well as what was said. If you are calling the referring HCP, have the prescription available. The individuals listed will likely answer all verifi cation and qualifi cation questions noted on the forms, or be able to refer you to someone who can.

The fi rst person you will need to speak to, however, in this process, is the patient. Use Form A: Patient Questionnaire to get some basic information from the patient over the phone, when he/she makes the appointment. You can usually fi nd out the name of the doctor and attorney, as well as a limited amount of information regarding insurance, from the patient, then turn to the insurance company, the doctor’s billing secretary and/or paralegal (among others) to fi ll out further information.

Use form A to fi ll out the fi rst section of Form B. Then fi ll out the rest of Form B to confi rm/verify information with the insurance company. With each call you make, record the date, time, the name and title of the individual with whom you spoke, and take accurate notes on what is said.

Preverifi cation questions (Figure 2):When verifying information with the auto insurance representative:

● Record date and time of verifi cation call. Write all pertinent information on verifi cation form:

○ Hello. This is [your name] from [offi ce]. May I speak to [name of adjustor or claim representative given to you by patient]? I would like to verify coverage. (Repeat until you reach the right person. If another contact name and phone number are provided, be sure to record new information.)

○ Hello, I would like to verify coverage. The patient’s name is [patient’s name]. The insured is [insured’s name if different from the patient]. The identifi cation number is [use social security number or claim/case number]. The date of the accident was [date given to you by patient].

○ What is the effective date of the policy? ○ What is the percentage of coverage? ○ How much is the deductible? ○ How much of the deductible has been paid? ○ What is the maximum dollar amount of benefi ts? ○ What dollar amount of benefi ts have been exhausted? ○ Can you confi rm what CPT codes the doctor ordered? ○ Can you confi rm that this policy will pay a massage

therapist to perform this service(s)? ○ Do you have any restrictions on the use of any of these

CPT codes by a massage therapist? ○ I would like to verify the following case number: [case

number] ○ To what name and address should I mail the claim forms?

When verifying information with Workers’ Compensation or L&I: ● Record date and time of verifi cation call. Write all pertinent

information on verifi cation form:

INFORMED Page 9

○ Hello. This is [your name] from [offi ce]. May I speak to [name of adjustor or claim representative given to you by patient]? I would like to verify coverage. (Repeat until you reach the right person. If another contact name and phone number are provided, be sure to record new information.)

○ Hello, I would like to verify coverage. The patient’s name is [patient’s name]. The employer is [employer’s name]. The identifi cation number is [use employer’s policy number]. The date of the accident was [date given to you by patient].

○ What is the maximum dollar amount of benefi ts? ○ What dollar amount of benefi ts have been exhausted? ○ Can you confi rm what CPT codes the doctor ordered? ○ Can you confi rm that this policy will pay a massage

therapist to perform this service(s)? ○ Do you have any restrictions on the use of any of these

CPT codes by a massage therapist? ○ I would like to verify the following case number: [case

number] ○ To what name and address should I mail the claim forms?

Preverifi cation questions for major medical/indemnity: ● Record date and time of verifi cation call. Write all pertinent

information on verifi cation form: ○ Hello. This is [your name] from [offi ce]. May I speak to

[name of adjustor or claim representative given to you by patient]? I would like to verify coverage. (Repeat until you reach the right person. If another contact name and phone number are provided, be sure to record new information.)

○ Hello, I would like to verify coverage. The patient’s name is [patient’s name]. The insured is [insured’s name if different

from the patient]. The identifi cation number is [use social security number or claim/case number]. The date of the illness/injury/accident/loss was [date given to you by patient].

○ What kind of policy is this? (i.e. HMO, WC, POS, etc.) ○ What is the effective date of the policy? ○ What is the percentage of coverage? ○ How much is the deductible? ○ How much of the deductible has been paid? ○ What is the maximum dollar amount of benefi ts? ○ What dollar amount of benefi ts have been exhausted? ○ What is the out-of-pocket limit? ○ What percentage will be paid after the out-of-pocket limit

has been reached? ○ Are there any restrictions on the use of physical medicine

codes? ○ Can you confi rm what CPT codes the doctor ordered? ○ Can you confi rm that this policy will pay a massage

therapist to perform this service(s)? ○ Do you have any restrictions on the use of any of these

CPT codes by a massage therapist? ○ What total number of visits are allowed for this treatment? ○ What number of visits have been completed so far for this

treatment? ○ What is the maximum total amount per year to be paid for

this treatment? ○ Is there a claim or case number?/I would like to verify the

following claim or case number: [claim or case number] ○ To what name and address should I mail the claim forms?

Form A: Patient Questionnaire

Patient Name: ______________________________________ Patient Social Security Number______________________

Insurance: Auto Workers’ Compensation (WC/L&I) Major Medical/Indemnity

Date of Injury/Illness: _______________________________

If Workers’ Compensation, name and telephone number of the employer at the time of injury:

Name____________________________________________ Phone___________________________________

Insured’s Name, Social Security Number, and Insurance Company:

Name___________________________________________ SS#____________________________________

Insurance company________________________________

Adjustor or Claim Representative’s name and phone number:

Name___________________________________________ Phone __________________________________

Group or Policy Number____________________________ Claim or Case Number_____________________

Insurance Identifi cation number:______________________

Referring physician’s name, address, and phone number:

Name___________________________________________ Phone___________________________________

Address:________________________________ City: ______________________ State: _____ Zip: _________________

Diagnosis Number(s): ______________________ ___________________ ___________________ (Add lines, if necessary.)

Figure 1. Form A: Patient Questionnaire

Page 10 INFORMED

Form B: Preverifi cation of Insurance Coverage

Part I:

Date:________________________ Time of Call: __________________________Insurance Company Name: ____________________________________________________________________________________Phone:________________________________ Fax: _________________________________Adjustor/Claim Rep Name: _________________________ Other contact name and title: ________________________________

Patient’s Name and Social Security Number: Insured’s Name and Social Security Number:Name: ________________________________ Name: _______________________________SS#: __________________________________ SS#: _________________________________

If Workers’ Compensation, Employer Name and Phone Number:Name _________________________________ Phone________________________________Date of Injury/Illness: ____________________ Case or Group Number: _______________________________Claim Number: _________________________ Insurance Identifi cation Number: ________________________

Part II:

Contact Person Name:_________________________________ Title:_________________________________Effective Date of Policy:__________________ Type of Insurance:__________________ (HMO, WC/L&I, PPO, AUTO, etc…)Percentage of Coverage: _________________ (100%, 80%, Other…)Requires a Co-payment? Yes No Amount: $______________Requires a Deductible? Yes No Amount: $______________Deductible Paid? Yes No Amount: $_______________ What date will the next deductible be due?________Maximum amount of benefi ts? $__________ Amount exhausted? $___________Out-of-pocket limit?___________ %/$ paid after out-of-pocket reached? ____________

According to the law, patients will be billed for the following outstanding responsibilities: Co-payment $_________________ Deductible $_____________________ Percent/$/Other___________________

Are there any limitations or restrictions on this patient’s policy? (Note below): ____________________________________________1. Is massage therapy a benefi t covered by the patient’s policy? Yes No2. Is the patient eligible for the massage therapy benefi t? Yes No [Will need diagnosis and ICD-10 codes]3. Am I eligible to provide the massage therapy services? Yes No [Provide professional license/certifi cation information]If an answer above is “no,” bill the patient for manual therapy services. If the answer to all three questions is “yes,” continue verifi cation questions below.4. Which massage therapy services are authorized?Service 1: ___________________ CPT Code: __________________Any restrictions/limitations (i.e., max units and reimbursement rate allowed)? _____________________________________________Service 2:____________________ CPT Code:___________________Any restrictions/limitations (i.e., max units and reimbursement rate allowed)? _____________________________________________Service 3:__________________ CPT Code: ___________________ Any restrictions/limitations (i.e., max units and reimbursement rate allowed)? _____________________________________________Service 4: _________________ CPT Code: ___________________ Any restrictions/limitations (i.e., max units and reimbursement rate allowed)? _____________________________________________(Add lines as necessary)[Reconfi rm] Will the insurance company pay massage therapists to provide services? Yes NoIf yes, number of visits allowed: __________ If yes, number of visits used this year: ________Maximum total amount to be paid for this type of treatment: $_______________ Mailing address for claim:Attn: ______________________________________________ Company: _________________________________________Mailing Address: _____________________________________ City/State/Zip: _____________________________________

Figure 2. Form B: Preverifi cation of Insurance Coverage

INFORMED Page 11

Have complete information before fi ling a claim. The great majority of delayed claims are associated with inaccurate or missing information. Each company and type of insurance has its own rules and regulations regarding reimbursement and billing, so you will need to confi rm this information for each new patient and each new condition being treated.

Basic rules of documenta on and recordkeepingProper documentation and recordkeeping is a critical, if mundane, dimension of a successful practice. Keep notes legible and accurate. If it is ever necessary to refer to fi les some time in the future (in a medical emergency or legal proceedings, for example), the context and details of your notes should be clear. Other health care personnel will need to know the background, presenting status, actions taken and the results, with some discussion of treatment strategies and expected objectives. Adhere to the following guidelines for preparing and maintaining records:

● Maintain accurate and truthful records: record only factual information, observations and actions. Don’t record your opinions or conjecture about the client or his/her condition. When recording statements made by your client (regarding an injury, for example), use quotation marks to demarcate the client’s words. Keep a separate fi le for personal notes or any material of a speculative nature.

● Make sure the forms you use to collect client information are appropriate to your practice and cover all pertinent areas. Make sure forms are free of errors and are easy to read and understand. Questions should be stated simply. Avoid jargon or complicated medical terminology, or defi ne terms as needed. Review forms on a regular basis, and revise or simplify confusing formatting or content.

● Take a comprehensive case history and review it with the client before beginning treatment. This should include an overview of the client’s general state of health and thorough medical history, his or her reason(s) for seeking massage therapy, onset and duration of problematic symptoms, medical history of family members (if appropriate) and occupational background.

● Train staff members to record client histories and other important information properly and thoroughly, and to ask appropriate follow-up questions if there is any ambiguity in a response. Implement some structure or mechanism to ensure this information is complete for every client and answers are recorded in suffi cient detail. Review any personal or medical information taken by other staff members in a personal inter-view with the client to ensure information was recorded properly and in adequate detail.

● Areas that do not apply to a specifi c client should be marked “N/A” (non applicable) rather than left blank.

● Develop a short, simple form that clients can use to note their progress (or lack of progress) at each visit.

● Document any client non-compliance with the care plan, including canceled appointments (dnka = did not keep appointment), refusal or failure to follow health care instructions and/or take needed medication, and activity or behavior that poses a risk to the client’s health. Communicate the rationale for your opinion and do not proceed with any action that runs counter to your professional judgment.

● If you feel the client’s disregard for professional recommendations is putting him or her at risk, have the client sign a form acknowledging that he or she has been informed

of the potential consequences of their action or inaction, and is choosing to refuse recommended treatment.

● Notes should be legible as well as accurate. Pay attention to your handwriting and use clearly written and recognized abbreviations. Remember that you and other people may need to refer to these notes years in the future. Make sure they are easy to read and understand.

● File records promptly and accurately. Establish a strict fi ling system and adhere to it, and be sure other staff members know the system and importance of using it.

● The following guidelines were established for litigation purposes and should be standard practice in all health care environments:

○ Alter records as minimally as possible, and only when necessary.

○ If you fi nd something in error, do not erase. Cross out the error using a single line, so as not to conceal what is written underneath, and write the word “error” above the incorrect statement.

○ Do not use correction fl uid. ○ If you review your records and feel the need to clarify a

point, write the date and the additional comments with the note (labeled “addendum”).

○ If litigation is threatened, do not make any kind of change to the records.

Not all fi le contents are subject to the same retention times. Keep records for current and former clients for as long a period as is practically possible, but at least the length of time specifi ed by federal and state regulations as the legal minimum.

It is crucial, for insurance reimbursement purposes, that any changes on an entry be dated and initialed by the individual doing so. In some cases, it may be necessary to attach another piece of paper with the amended information to the form. This should also be dated and signed.

Confi den alityKeep all original records in your possession. Provide copies of x-rays, notes and records documenting client care for clients or health care facilities requiring their own copies. Share information only in cases where disclosure is required by law, court order or another appropriate, professionally approved manner, according to legal requirements.

Impress the importance of confi dentiality and retaining original fi le copies upon all staff members. Institute the following procedures when providing copies, and make no exceptions:

● Have the client sign and date a release authorization form. ● Keep a copy of the release authorization with the client’s records. ● Copy only the information requested. ● Note in the client’s fi le: the party requesting the copy, what

specifi cally was requested and the date, to whom, and where the copy was sent.

All information and matters relating to a client’s background, condition, and treatment are strictly confi dential and should not be communicated to a third party (even one involved in the patient’s care) without the client’s written consent or a court order. Treat clients with respect and dignity: Handle personal information with sensitivity and keep the content of written records a private matter. Practitioners who can’t resist telling secrets or repeating gossip in their personal lives should be aware of the heavy penalties associated with jeopardizing client confi dentiality in a professional context.

Page 12 INFORMED

Form headingsHeadings should easily identify the form, the name of the patient and the date of each entry (each time the intake form is updated). Every item in the patient’s folder should have identifying information at the top of the form to facilitate fi ling. Documentation required or associated with health insurance reimbursement must have additional information; typically:

● A claim or identifi cation number assigned to the case. ● A patient’s insurance identifi cation number (ID number). ● The date of the incident, injury, illness, etc.

Use a header that identifi es all this information, and/or other ID numbers assigned by the insurance company or another agency, for all forms. Missing information leads to delayed processing. In some cases, however, one of these identifi cation numbers may not be assigned, meaning a blank entry is valid. Intake forms should also include your business name.

New clients It is generally a good idea to assume that a new client knows nothing about massage therapy. Many massage therapists develop an information sheet to acquaint the client with basic massage concepts. Offi ce personnel, customary procedures and other useful points regarding their place of business, such as bathroom locations and what to expect in a typical session, can be distributed to clients in the waiting room before their fi rst session. Providing basic instructions and answers to common questions in a brief information sheet can be very effective in putting new clients at ease, especially when clients are new to the experience and unfamiliar with a facility’s personnel and way of conducting business.

Uncertainty tends to increase clients’ feelings of vulnerability and loss of control, while familiarity, structure and predictability tend to increase clients’ feelings of security and comfort, bringing a greater sense of control. Establish a set routine and session protocol to which your clients can grow accustomed. Ideally, sessions should be held at regular intervals, at a single location, for a specifi c, limited amount of time. Sessions should begin and end punctually, and should not be interrupted by phone calls or intrusions from staff or other clients.

Intake formsPatients should expect to fi ll out a number of intake forms related to insurance coverage on their fi rst visit to you. Even before they arrive, you will have completed Form A: Patient Questionnaire, with the patient over the phone and confi rmed preverifi cation information (Form B). This section will review necessary intake forms and go into further detail regarding documentation required for insurance reimbursement.

Intake forms may include:General

● Patient information form (health history). ● Notice of informed consent. ● Notice of release of medical records. ● Notice of client’s bill of rights. ● Fee schedule. ● Policies (payment, cancellation, scheduling). ● HIPAA Notice of Privacy Policy.

Insurance-related ● Health reporting forms. ● Pain and disability questionnaires.

● Injury information form. ● MVA. ● Billing information form. ● HCFA-1500 form. ● Insurance verifi cation form.

Some practitioners ask the patient come in 15-30 minutes early to fi ll in the necessary forms. We have found patients take greater care answering the questions if we send some of these forms, like the patient information form (health history), to the patient in the mail, so he or she can fi ll it out more leisurely, and, in many cases, more accurately, as he or she can look information up or ask family members to help confi rm dates. Many have other health records at home on fi le to which they can refer to verify dates. Some of the forms, such as the pain questionnaire, must be fi lled out just before the session, to assess pain or discomfort at that particular moment.

After the patient has provided the information, he/she will mail them back, and you will review the forms with the client in a treatment room or other private area. This discussion should take place before the client changes clothing. Intake forms should be as self-explanatory as possible. When you review the forms with the client, clear up any ambiguities with clarifying questions.

In cases where insurance is paying for a portion or more of the payment, documentation serves another purpose: records must support or provide justifi cation for both the plan of treatment in general and the specifi c care that day of the session. This entails that documentation supports that the injury was signifi cant by recording the patient’s symptoms and the deleterious effect or impingement of those symptoms on daily activity. Also, the documentation must support that the treatment being provided has a positive effect or reduces symptoms, allowing more normal function. If a treatment has a positive effect or reduces symptoms, it is considered reasonable and necessary. Some insurance-related forms will need to be fi lled out at every session to chart the progress of the patient.

Pa ent informa on form (health history)Every patient should fi ll out this form on their fi rst visit, and update it yearly to track changes or conditions of concern. Every time the patient visits a clinic, hospital or another health care provider, a record of the visit is made. This information is then compiled into a health or medical record, which is used by doctors, nurses and other medical staff to ensure the patient receives quality health care. It serves as a:

● Basis for planning care and treatment. ● Means by which doctors, nurses and others caring for a patient

can talk to one another about needs. ● Legal document describing the care received. ● Means by which patient or insurance company can verify that

services billed were actually provided. ● An accurate health history to all health care providers who

treat the patient.

The patient information form (health history) includes three main areas of information:

● Identifi cation and contact information. ● Current health status. ● Health history.

Identifi cation and contact information should include patient contact information, a person to call in case of emergency and contact information for the referring health care provider, as you

INFORMED Page 13

may need to call for further information or consent to treat the patient. You will also send copies of progress reports or related information to the patient’s referring health care provider.

Current health status and change over time is important in cases of insurance reimbursement. You will want to identify why the patient is coming to you and how you will contribute to their healing. You will want to assess the state of injury, describing its symptoms and the degree to which it impairs normal function. This information is reviewed to validate justifi cation for care. Use the patient’s own words, noted with quotation marks, whenever possible. This information from the patient is “subjective” documentation and is critical in validating care.

Information provided by the health care provider, “objective” information, is reviewed and assessed against the subjective information, to corroborate or substantiate treatment for the injury. Objective information is largely recorded in SOAP charting or notes, which will be discussed later. Review the answers to these questions and the client’s medical history with him or her. Ask follow-up questions, as needed, to acquaint yourself with the client’s current state of health and assess potential contraindications to massage.

The health history includes: (1) a section listing injuries, accidents, illnesses, and surgical procedures in the patient’s history, and (2) a checklist of conditions and symptoms, with a notation regarding if these symptoms or conditions have ever been experienced, when, and if they are being experienced currently. The history should also explore what treatment has been used for conditions or symptoms in the past and currently, including prescription and non-prescription substances the patient is ingesting (such as nutritional supplements or vitamins). Use this information when developing the treatment plan. This way, you can avoid treatments that have proven ineffective or are already being provided by another health care provider.

Take the necessary steps to make sure all information is correct and complete. It is useful to have all the information in one place, on this form, which can be used to refer to contact information and develop the treatment plan. You will want to put your name, contact information and provider number at the top of each page. Make a photocopy of each side and fi le the form in the client’s chart. Each patient should complete a new health information form at least annually, and more often in cases of progressive or degenerative health conditions, or to note changes in the patient’s health.

Please note that no patient information form is included in this packet. However, a free copy of a patient information form can be downloaded from:

● http://www.sohnen-moe.com/forms.php#clirec, or ● http://www.myphr.com/your_record/free_forms.asp, or ● http://www.myphr.com/your_record/adultform.pdf

Informed consent, release of medical records, and client’s bill of rightsThe client should also sign and date the following statements:

● Release of medical records. ● Notice of informed consent w/scope and limitations of

practice. ● Client’s bill of rights.

The concept of informed consent came out of the “patient’s rights” movement of the 1960s. Now a customary procedure both inside and outside of health and medical care, informed consent refers to a patient’s right to be informed about his or her health

care or medical condition and participate in decisions regarding that care or condition. The patient, or patient’s guardian, is required to sign a written statement acknowledging agreement to proposed treatment terms and awareness of the known risk factors associated with them.

In massage therapy, informed consent usually takes the form of an agreement between the practitioner and client that states their shared objective, proposed treatment plan, expected outcome(s) and anticipated time-frame for results. It may also refer to the client’s medical history, asserting that the client has informed the practitioner about all known physical or medical conditions and current medications, and will inform the practitioner if any of these conditions change.

The notice of informed consent in massage therapy typically includes a statement explaining the role of massage therapy in pain and stress reduction or other specifi ed purpose, and its limitations: “Massage therapy does not take the place of medical examinations, care or treatment; the practitioner is not a doctor and does not diagnose medical conditions or prescribe medication; clients should continue to consult their primary caregivers or other specialists for ongoing health care and medical conditions. Consult your primary caregiver to review health care recommendations before making signifi cant changes in your health and exercise regime or diet.”

Both the practitioner and client are ensured the “right of refusal.” For a client, this means the right to refuse, modify or terminate treatment regardless of any prior agreements or statements of consent. For a practitioner, this means the right to refuse to treat any person or condition for just and reasonable cause. These rights safeguard a client’s freedom to choose any practitioner and a practitioner’s freedom to terminate treatment, if necessary. These rights might come into play in cases of negligence or abuse. For example, a practitioner can refuse to work with an abusive or unstable client, and a client can refuse treatment from a practitioner he or she suspects is practicing under the infl uence of alcohol, drugs or any illegal substances.

A client’s bill of rights typically includes the following information: ● Name of practitioner. ● Details of practitioner certifi cation and list of credentials. ● Practitioner’s area of expertise, philosophy and/or approach to

massage. ● Fees and service schedule. ● Payment terms. ● Filing procedures for written complaints. ● A right to information statement, asserting the client’s right to

the following information: ○ Practitioner’s assessment of the client’s physical condition. ○ Recommended treatment, estimated duration of treatment

and expected results. ○ Copy of client’s health forms/records held by practitioner. ○ Statement of confi dentiality. ○ Statement of refusal, explaining the client’s right to

terminate a course of treatment at any time and choose a new practitioner.

● Client’s right to invoke, explaining client’s right to invoke these rights without fear of reprisal.

Fee schedule and offi ce policiesFee schedules typically include the services offered by modality and the fees associated with each. Also include the current procedural terminology (CPT) code for each therapeutic

Page 14 INFORMED

procedure or modality. Care is typically provided in 15-minute increment segments. Only combine times of services that use the same procedural codes.

Some practitioners bill according to time, called “bundling services,” rather than by modality. If you do so, you can use a number of different combinations of manual therapy and charge a fl at rate, as long as you do not bundle it with other procedure codes that would be reimbursed at a lower rate than the one you are using to bill the service. In addition, you must bill patients being reimbursed through insurance the same amount you bill other patients for the same services.

Offi ce policies include many different bits of information you want to communicate to the patient: special discounts (for prepayment, for example); billing policies, how a person will be billed, or interest rates on late payments; cancellation policies, such as a requirement for at least 24-hour-notice on cancelled appointments or other penalties. A written statement of all offi ce policies is typically followed by a signature line. By signing, clients confi rm that they have read all offi ce policies and will abide by them.

NOTICE OF PRIVACY PRACTICES HIPAAThe fi rst-ever federal privacy standards to protect patients’ medical records and other health information provided to health plans, doctors, hospitals and other health care providers took effect on April 14, 2003. Developed by the Department of Health and Human Services (HHS), these new standards provide patients with access to their medical records and more control over how their personal health information is used and disclosed.

The Health Information Privacy and Accountability Act (HIPAA) specifi es that all health care providers must maintain their patient’s privacy. Each patient must receive a written notice stating their right to privacy and explaining the mechanisms for maintaining privacy and the use of their healthcare information. It must also include a statement from you that everything you know about the patient will be kept in strict confi dence, although some sharing of information among the insurer, the patient’s doctor and the attorney is necessary. The patient should sign the statement confi rming he/she has read and understands the privacy policy, and receive a copy of this statement, an example of which is included.

[Medical Center]

Notice of Privacy Practices (HIPAA)This document is intended to fulfi ll the notice required under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This notice describes how medical information may be used and disclosed, and how you can get access to this information. Please review it carefully.

We understand that health and medical information is extremely personal. We have a duty and are committed to protecting health and medical information. When a person is admitted to our facilities, we create a chart and record of the care and services received. We need this record to provide quality care and services, and to comply with certain licensing regulations and other legal requirements. This notice applies to all of the records generated by our facilities when a person is in care with us.

Individually identifi able information about our clients’ past, present or future health or condition, the provision of health care or payment for healthcare is considered “protected health

information.” We are required to extend certain protections to this information and to give notice about our privacy practices that explains how, when and why we may use or disclose this information. Except in specifi ed circumstances, we must use or disclose only the minimum necessary medical information to accomplish the intended purpose of the use or disclosure.

We are required to follow the privacy practices as defi ned in this notice, although we reserve the right to change our privacy practices and the terms of this notice at any time.

How we may use and disclose medial informationWe use and disclose personal health information for a variety of reasons. We have a limited right to use and/or disclose such information for purposes of treatment, payment and to perform our health care operations. For uses beyond that, we must have written authorization unless the law permits or requires us to make the use or disclosure without authorization.

Generally, we may use or disclose personal health information as follows: For treatmentWe may disclose personal health information to doctors, nurses and other health care personnel who are involved in providing health care to a person in our facilities. Health information will be shared among members of the treatment team, medical, psychiatric, psychological and pharmacy personnel. Personal health information may also be shared with outside entities providing ancillary services related to treatment, such as lab work, X-rays, other medical services, outside medical providers or for consultation purposes. Personal health information may also be shared with family members and community referral agencies involved in the provision, payment, or coordination of care.

For paymentWe may use and disclose medical information for payment purposes such as billing a person or an insurance company for services rendered, to obtain prior approval from an insurance company or for benefi t determination.

For health care operationsWe may use and disclose medical information for health care operations and in the course of operating our facilities and rendering the services we provide. These disclosures are necessary to run our treatment programs and to ensure that our clients receive the highest-quality care. We may remove individual identifying information so that others may use information to study health care and health care delivery without having access to specifi c personal information. Medical information may also be used for protocol development, case management and care coordination.

For appointment remindersWe may use and disclose medical information to contact you or others involved in the identifi ed person’s care as a reminder for appointments or reviews of treatment or medical care.

For marketingWe will not release personally identifi able information for marketing purposes without prior written authorization.

For researchUnder certain circumstances, we may use and disclose medical information for research purposes. Before we use or disclose medical information for research, such a project will have been approved by the agency director. We will not release personally identifi able medical information without prior written authorization.

INFORMED Page 15

As required by lawWe will disclose medical information when required to do so by federal, state, or local law, such as by court order, when related to public health issues, when required to do so related to suspected abuse, neglect or domestic violence, or relating to suspected criminal activity. We must also disclose information to authorities that monitor compliance with these privacy requirements.

When there are risks to public healthWe may disclose information to prevent or control disease, injury or disability, report disease, injury, vital events such as birth or death and the conduct of public health surveillance, investigations and interventions. We may disclose information to report adverse events or product defects. We may disclose information to notify a person who has been exposed to a communicable disease or who may be at risk of contracting or spreading a disease.

To avert serious threat to health or safetyWe may use and disclose medical information when necessary to prevent a serious threat to the client’s health and safety or the health and safety of the public or another person. Any such disclosure will only be made to parties who can reasonably prevent or lessen the threat of harm or danger.

AUTHORIZATIONS TO USE OR DISCLOSE HEALTH INFORMATION

Other than as stated above, we will not disclose your health information other than with your written authorization. If you or your representative authorizes us to use or disclose your health information, you may revoke that authorization in writing at any time.

Rights regarding client health informationA client served by our facilities has the following rights to their protected health information:

To request restrictions on uses and disclosuresA client has a right to ask that we limit how we use or disclose their protected health information. Such requests should be submitted in writing, and will be responded to within 60 days. We will consider a client’s request, but are not legally bound to agree to the restriction. To the extent that we agree to any restrictions, we will document such agreement in writing and abide by it except in emergency situations. We will not and cannot agree to limit uses or disclosures that are required by law.

To request confi dential communicationA client has a right to request that we contact them by means other than phone or mail. We will comply if it is reasonably possible to do so.

To request and inspect a copy of protected health informationHealth and medical information generated by our programs is the property of our facilities. However, unless access to records is restricted for clear and documented treatment reasons, a client has a right to see their protected health information upon submission of a written request. Such a request will be responded to within 60 days. If access to records is denied, the client will receive a written statement detailing the reasons for denial and explain any right to have the denial reviewed. If a client wants copies of personal health information, a charge for copying may be imposed, depending on the circumstances. A client has a right to choose what portions of information may be copied, and to have prior notifi cation of charges for copying.

To request amendment of protected health informationIf a client believes that there is an error or missing information in our records of personal health information, the client may request, in writing, that we add to or correct the record. The request must include a reason supporting the request to amend information. We will respond within 30 days of receiving the request. The request may be denied if: it is determined that the health information is complete and correct, if the information was not created by us and/or not part of our records, or, not permitted to be disclosed. Any denial will state the reasons for denial and explain the right to have the request and denial, along with any statement in response provided by the client, added to the record. If the request for amendment is approved, we will change the information, inform the client, and inform others needing to know this information.

To a list of disclosures A client may ask for a list of disclosures we made other than for treatment, payment, or health care operations, as outlined above. This list will include when, to whom, for what purpose, and what content of protected health information has been released. Such requests should be made in writing and will be responded to within 60 days of the request. The request should specify the time period, and may not be made for periods of time in excess of seven (7) years. We will provide the fi rst accounting requested. Subsequent accounting requests may be subject to a reasonable cost-based fee.

To receive this noticeA client has a right to receive a paper copy of this notice.

Duties of providerWe are required by law to maintain the privacy of your health information and to provide to you and your representative this notice of our duties and privacy practices. We are required to abide by the terms of this notice as may be amended from time to time. We reserve the right to change the terms of our notice and to make the new notice provisions effective for all health information that we maintain. If we make a material change to this notice, we will provide a copy of the revised notice to you or your appointed representative. You or your representative have the right to express complaints as outlined below.

By signing this form, you hereby acknowledge that the [MEDICAL CENTER] may release your protected health information to carry out payment and treatment operations.

EFFECTIVE DATE: [INSERT EFFECTIVE DATE HERE]

I have read and understand the Notice of Privacy Practices of the [MEDICAL CENTER].

Name:_________________________ Date: _________________

How to complain about our privacy practicesIf it is felt that privacy rights have been violated, or there is a disagreement about a decision we made about access to protected health information, a complaint may be fi led with the person listed below. A complaint may also be fi led with the Secretary of the United States Department of Health and Human Services. No retaliatory action will be taken against any party fi ling a complaint.

CONTACT PERSON TO SUBMIT A COMPLAINT: [INSERT CONTACT NAME, ADDRESS AND PHONE NUMBER HERE]

Page 16 INFORMED

INSURANCE RELATED INTAKE FORMSHealth repor ng forms Health reporting forms include a variety of documents that assess the status of health, illness or injury and follow its progression over time. These documents will be discussed further in the SOAP documenting section. Health reporting forms, for example, might provide patients a means to diagram their locations of pain, stiffness or numbness and rate the degree of pain on the day of the session. Patients with chronic conditions or injuries should complete a health report discussing the status of their symptoms or pain on the day of the session, both before and after treatment. Over time, this document will reveal healing or progress from one session to another, showing positive results and justifying the treatment plan.

Measuring pain and disability Pain and disability questionnaires investigate the patient’s ability to function normally, including sitting, standing, washing, dressing, reading and any activities he/she participated in before the incident of injury. Degree and proof of injury is assessed along a disability percentage scale, which can be compared at each session to assess progress in healing.

A number of different pain and disability questionnaires exist. Make sure the tools you use are meaningful and accepted by the health insurance agency. Pain and disability indexes record functional progress, which is critical in cases of insurance reimbursement. Functional progress demonstrates improvement in ability and function through the use of reasonable and necessary treatment. It demonstrates that the patient is returning to pre-injury function with the help of the treatment team.

It is important to use the proper measurement device in order to get meaningful data of a patient’s baseline status. The measurement must then be reapplied to get meaningful data of a patient’s improvement. The testing device must be comprehensive enough to give a reliable clinical picture, simple to understand, easy to score, and able to be administered at a low cost. Pain and disability assessments should be administered on a weekly or monthly basis, depending on the frequency of treatment and rate of change. Review this information and assess the degree of impaired function. Any loss should be investigated. Most research instruments provide guidelines regarding the manner and frequency of administration.

Pain questionnaires typically address the following issues: ● Are you experiencing pain/discomfort? ● Where is the location of the pain/discomfort? [Have client

mark diagram] ● How and when did the pain/discomfort begin? What were you

doing when you fi rst noticed it? ● What level of pain/discomfort are you experiencing? [Use

scale from 0 to 10, with “0” meaning “no pain,” and “10” meaning “unbearable pain”]

● Is the pain/discomfort constant, or does it vary in intensity? ● Do you associate the pain/discomfort with a specifi c

movement or activity? ● Have you ever sought medical attention for this condition?

[Describe treatment history] ● Do you have tingling, numbness, or pain anywhere else?

[Have client mark diagram]

A typical pain and disability questionnaire for the fi eld of massage therapy is the revised Oswestry neck/back pain questionnaire

(similar to the Vernon-Mior questionnaire), which can be viewed in full at: http://www.chiro.org/LINKS/outcome.shtml#NDI.There are many different types of instruments used to quantify pain and degree of disability. Because of copyright restrictions, examples of these questionnaires cannot be included here; please refer to the referenced web site above or refer to the list below for further information and detail regarding these research instruments.

Pain questionnaires: ● Visual Analog Scale [VAS] [Huskisson, 1982] ● Numerical Pain Scale [NPS] [Jenson, 1986] ● McGill/Melzak pain questionnaire [Melzack, 1975] ● Pain drawing [Mooney and Robertson, 1976] ● Pain Disability Index [Tait, 1987] ● Dallas Pain Questionnaire [Lawlis, 1989]

Disability: Lower back pain questionnaires: ● Modifi ed Oswestry Low Back Pain questionnaire [Fairbank,

1980] ● Roland-Morris Disability questionnaire ROL-SIP [Roland,

1983] ● Low Back Pain Type Specifi cations [Health Outcomes

Institute, 1992] ● Million Disability questionnaire [Million, 1982] ● Waddell Disability Index [Waddell and Main, 1984]

Disability: Cervical or headache questionnaires: ● Neck Disability Index [Vernon-Mior, 1991] ● Headache Disability Index: HDI [Jacobson, 1994]

Patient satisfaction questionnaires: ● Low Back Pain Patient Satisfaction [Deyo, 1986] ● Chiropractic Satisfaction Questionnaire [Coulter, 1994]

Personal injury informa on form(s)Cases where the patient has experienced an injury or car accident require additional documentation. Different types of insurance are associated with specifi c types of benefi ts. In cases of personal injury, you will want to make a distinction between an automobile accident and other types of personal injury. General illness or injury is covered through private insurance or the patient’s employer. Workers compensation covers on-the-job injuries or illnesses. PIP (personal injury protection) covers motor vehicle accidents (MVA).

Because some cases will result in litigation, documentation should be thorough. The insurance company can discontinue care, deny and even reverse payment based on documentation alone. Document the mechanics of the injury, symptoms, limited function or activity since the injury, activities affected and complications resulting from the incident or exacerbated by the accident. This information is necessary to substantiate that injuries are signifi cant, were incurred as a result of the incident, and that treatment is justifi ed. Put the same headings on all the injury information questionnaires: name, date, insurance ID number and the date of injury.

Determine whether another record of the incident exists anywhere, on fi le. Auto accidents may have been reported to the police. Employees injured in on-the-job incidents should have fi led a report with their supervisor. (Individuals injured by MVA while on the job may qualify for both.) While the police report addresses the details of the accident, your documentation should focus on the injury specifi cally. Use the injury information questionnaire to describe the onset of the injury, including how and against what the patient fell, for example, not how the accident occurred.

INFORMED Page 17

Patients should be as specifi c as possible describing how the incident or injury occurred and the associated symptoms. Record all symptoms since the incident and establish when they began. Many symptoms are not felt immediately. Track the progression of injuries and healing carefully and accurately, describing limitations in function or daily activities since incident. Both work and nonwork activities should be assessed to determine the signifi cance of the injury. Note any change of duties required for any period of time. Any new inability or change in quality of life should also be noted. Be sure to document any work-related impairment for workers’ compensation cases. Confi rm the existence of any pre-existing conditions.

All personal injury and workers’ compensation cases should fi ll out the injury form. Those involved in an auto accident should fi ll out the motor vehicle accident form. This information is used together with the personal information from the health history to develop an appropriate treatment plan. Injury forms are necessary for reimbursement in workers’ compensation and personal injury cases, as they are used, in part, to assess the signifi cance of injury and support or justify a case for treatment. In general, injury information forms are best fi lled out at home. Send materials to the individual’s home to fi ll out before the fi rst session. Then review them with the patient.

The signifi cance or severity of the injury must be established if ongoing treatment is supported to return the individual to pre-injury state. Some items such as visual disturbances or loss of memory are easily forgotten compared to the more obvious bruises or cuts, so these issues are prompted with standard questions. Some of the questions on the injury information form are associated with specifi c types of injury, such as whiplash trauma. Breathing diffi culties can relate to seat belt injuries.

External proof of impact is supportive information for the case of treatment, so pictures and descriptions of visible injury, like cuts and bruises, can be used to support the patient’s treatment. Always include a section in your questionnaire asking the individual if he/she has anything else to add, in case your form does not address every contingency or issue the patient considers important.

The patient should list all care related to the incident or injury and all health care providers involved to avoid duplication of treatment and facilitate treatment coordination. Include the primary health care provider’s (HCP) diagnosis. According to Diana L. Thompson, an expert in insurance reimbursement for massage therapy:

“Typically, insurance peer reviewers red-fl ag a case if manual therapy is the only source of treatment unless the manual therapist has primary care status. The combination of allopathic and complementary care is more acceptable. Noting addition-al care may help justify the treatment and speed up claims processing.”4

The following information can be distributed to your patient to help explain the process of billing for the purposes of insurance reimbursement.

Personal injury and insuranceCoverage for personal injury (PI) claims can be very complicated. Our offi ce follows the following progression of claim submission.

● If your claim is automobile-related and you have automobile insurance with medical pay benefi ts, we will bill all charges to your automobile insurance.

● If no automobile insurance is available or medical pay benefi ts are exhausted, claims will be sent to your health insurance. If your health insurance does not cover chiropractic or if you have a deductible and co-payments, we ask that you make payments at the time of service. You may be able to recover these payments from your automobile insurance or the other responsible (third) party’s insurance.

● If no insurance is available or claims are being billed to a third party’s insurance, we ask that you make payments at the time of service. You may be able to recover these payments from the third party’s insurance.

● If you have retained an attorney to help you with your PI case, please inform our offi ce. We will gladly work with most attorneys, and in approved cases, may wait until settlement for payment. If our offi ce cannot obtain the proper paperwork from your attorney to guarantee payment at settlement, we will require payment at the time of service. Unfortunately, our offi ce has had diffi culty with reimbursement from a few law offi ces and will require payment at the time of service if you have retained one of these fi rms. If you have questions about how your case may be handled with your attorney, please ask our staff. Regardless of the billing situation your PI claim involves, please remember that you are ultimately responsible for the full payment of your account. Please read all forms carefully to be sure you understand how your case will be handled.

Worker’s compensa onIf you are injured at work or become ill because of what you think is a work-related exposure, you must report the accident, incident or exposure to your supervisor. Any delays in reporting an accident, incident or exposure may affect not only your health but your compensation benefi ts as well.It is the responsibility of your supervisor or manager to fi ll out an injury report, which must be reported to the state Worker’s Compensation Division. You are entitled to your own copy.The WC Division will assign your case a claim number. Please retain this number until your WC claim settles.Your employer may choose which provider you see for your work injury. You also have the right to select a doctor, chiropractor, psychologist or dentist licensed in the state. You are responsible for notifying your employer of who you have selected.When you arrive for the fi rst time for an appointment, you will be asked for your WC claim number and your health insurance card. The doctor’s offi ce will contact your employer to confi rm your work has accepted liability for the claim.Once you have seen the doctor, the employer, the insurer and you may view medical records.All claims will be processed through the carrier identifi ed by your employer.You may fi le for a hearing with the Division of Workers Compensation:

● If your employer fails to report an injury. ● If there is any dispute over any claim between you and your

employer. ● If there is a dispute between you and the insurer that cannot be

resolved by talking it over.If, for some reason, your claim is not covered by worker’s compensation, we will submit it to your regular health insurance payer.

Page 18 INFORMED

On-the-job injury questionnaire

Name: _____________________________________________________ Today’s date: ________________________ First Middle Initial Last

Accident date: ________________ Time of accident: _____________ AM PM

How did the injury occur? _____________________________________________________________________________________

___________________________________________________________________________________________________________

Was a work incident report fi led with your supervisor? YES NO May I call your employer for treatment authorization? YES NO Do you have a worker’s compensation attorney? YES NO

If yes, provide name and phone contact information: _________________________________________________________________

Did you have any physical complaints before the incident? YES NO

If yes, describe: ______________________________________________________________________________________________

Do you have any illnesses or previous injuries that may have been affected by this injury? YES NO

If yes, describe: _____________________________________________________________________________________________

Describe any bruises, cuts or abrasions as a result of injury: __________________________________________________________

Did you feel pain immediately: YES NO If yes, where? ____________________________________________

If no, when did you start feeling onset of signs and symptoms: Date: _____________ (Circle one) SUN MON TUE WED THU FRI SAT Hours after accident: ____

Initial signs and symptoms: ____________________________________________________________________________________

Numbness/tingling in: ________________________________________________________________________________________

Pain/stiffness in: _____________________________________________________________________________________________

Other symptoms experienced since the incident? ___________________________________________________________________

Since the injury, symptoms are: Worse Improved Changed No change

Describe: __________________________________________________________________________________________________

Does anything relieve your symptoms? ___________________________________________________________________________

Does anything aggravate your symptoms? ________________________________________________________________________

After incident I went: Home Hospital ASAP Later VIA: Ambulance Car

Hospital Procedures: X-Rays Laboratory tests Other: _________________________________________

Hospitalization: _____________________________________________________________________________________________

Prescription: ________________________________________________________________________________________________

Diagnosis: _________________________________________________________________________________________________

Instructions: ________________________________________________________________________________________________

Went to Doctor’s offi ce:Dr. name: ___________________________________________ Date: ___________ Time: ____: ____ AM PM

Other health care providers who have treated you for this injury:

Name: _____________________________________________ Name: ____________________________________________

Type of treatment: ____________________________________ Type of treatment: ___________________________________

Diagnosis: __________________________________________ Diagnosis: _________________________________________

Did you return to work on the day you were injured? YES NOHave you lost time from work since the injury? YES NOHave your work responsibilities changed as a result of the injury? YES NOHave your daily activities changed as a result of the injury? YES NO

INFORMED Page 19

Restrictions due to the injury or condition. (Check all that apply specify pound and frequency as appropriate and explain):Lifting: ____________________________________________ Pushing/pulling: ____________________________________

Bending/stooping: ____________________________________ Kneeling/squatting: __________________________________

Twisting: ___________________________________________ Use of extremities:___________________________________

Standing: ___________________________________________ Walking: __________________________________________

Siting: _____________________________________________ Repetitive motions: __________________________________

Driving: ____________________________________________ Vibrations: _________________________________________

Climbing: __________________________________________

Splints/crutches/bandages: _____________________________________________________________________________________

Other conditions (E.G., dry work only, no heat exposure, etc.): ________________________________________________________

What other work activities are affected by this injury? _______________________________________________________________

Have you injured this area before? YES NO If yes, when? _______________________________________

Did you lose time from work? YES NO

Do any other medical issues affect your ability to work? YES NO

During normal activities, do you favor any part of the body? YES NO

If yes, describe: ______________________________________________________________________________________________

Have you ever fi led a workers’ compensation claim before? YES NO

Are you still employed by the same company? YES NO

Are you currently working? YES NO If no, last date of employment: _________________________

If working for a different company, provide name: __________________________________________________________________

Please add anything you feel is important or signifi cant about the incident: _______________________________________________

___________________________________________________________________________________________________________

Auto injury questionnaire (MVA)

Today’s date: ______________ Name: ________________________________________________________________________ First Middle Initial Last

Accident date: ________________ Time of accident: _____________ AM PM

Patient: Driver Passenger Pedestrian Moving Stopped

If driver and stopped, was your foot on the break? YES NOEstimated speed: ___________ mph Were you? Increasing speed Decreasing speed At steady speed

Road condition(s): Dry Damp Wet Rain Ice Snow Were you struck from? Behind Front Right side Left sideHow was your vehicle hit? Head on Rear end Side swipe

Describe: ___________________________________________________________________________________________________

If you were hit from behind, was your vehicle pushed forward upon impact: YES NO If yes: how far: _______________

Where were you seated in the vehicle? ____________________________________________________________________________

Did your vehicle hit another vehicle/object? Yes No If yes, how? Head on Rear end Side swipe

Describe: ___________________________________________________________________________________________________

Was the other vehicle moving at the time of impact? YES NOIf yes, was it: Increasing speed Decreasing speed At steady speedHead rest: None Integral Adjusted in positionDoes your head touch the headrest? YES NO If no, how far in front of the head rest is your head? _______________

Did any part of your body come into contact with the vehicle? YES NO If yes, describe: _________________________

Describe any bruises, cuts, or abrasions as a result of the injury: _______________________________________________________Seat belt: Wearing Not wearing Shoulder harness: Wearing Not wearing Wearing both

Page 20 INFORMED

Is your vehicle equipped with an airbag? YES NO Did airbag activate? YES NOHead position: Facing forward Facing left Facing right Hands: One on wheel Two on wheelAware of impending collision: YES NOFelt body go: Forward Backward Sideways OtherSecond collision in vehicle? YES NO If yes, explain: ___________________________________________________

Second collision outside of vehicle? YES NO If yes, explain: ____________________________________________

Other(s) in your car: (D=driver P=passenger) _________________Wearing glasses: YES NO Glasses still on after collision: YES NOLoss of consciousness: YES NODid you feel pain immediately: YES NO If no, when did you start feeling onset of signs and symptoms: Date: _________(Circle one) SUN MON TUE WED THU FRI SAT Hours after accident: ____________Initial signs and symptoms: None Headache Dizziness Disorientated ShockNumbness/tingling in: Arms Legs Other:__________________________________________________________________ Neck pain/stiffness Upper back pain/stiffness Middle back pain/stiffness Lower back pain/stiffness

Have you experienced any of the following since the accident? Memory loss Loss of balance Disturbed vision Hearing impairment Breathing diffi culty Sleep disturbancesSince the injury, symptoms are: Worse Improved Changed No change

Describe: ___________________________________________________________________________________________________

Did the police arrive at the accident? YES NOAfter incident I went: Home Hospital ASAP Later VIA: Ambulance Car

Hospital Procedures: X-Rays Laboratory tests Other: _________________________________________

Hospitalization: _____________________________________________________________________________________________

Prescription: ________________________________________________________________________________________________

Diagnosis: _________________________________________________________________________________________________

Instructions: ________________________________________________________________________________________________

Went to Doctor’s offi ce:Dr. name: ___________________________________________ Date: ___________ Time: ____: ____ AM PM

Police involved: YES NO Report fi led: YES NO

Brakes: On Off Transmission: Manual Automatic

Type of car: Year: __________ Make: _______________________ Model: ________________________________________

Other car(s) involved: Year: _________ Make: ______________________ Model: _________________________________

Location of impact: Front Back Right side Left side

Estimated property damage $ ____________ Vehicle: Drivable Not drivable

Prior medical care and doctor: ______________________________________________________ X-rays date: ______________

Prior chiropractic care and doctor: ___________________________________________________ X-rays date: ______________

Previous motor vehicle injuries: ____________________________________________________ Date: ___________________

Previous workers’ compensation injuries: _____________________________________________ Date: ___________________

Previous sports injuries: ___________________________________________________________ Date: ___________________

Please draw the accident scene:

INFORMED Page 21

Insurance questions: Do you have no-fault pip? YES NO Benefi ts or medpay? YES NO Are benefi ts exhausted? YES NO

Do you have a deductible? YES NO If yes, how much? ________________________

Has the deductible been met? YES NO If no, how much is left to pay? ______________

After the deductible is met, what percentage does you insurance cover? ___________________%

What are the policy limits? _____________________________________________________________________________________

Do you have u/m (uninsured motorist protection)? YES NO

Were you cited in the accident? YES NO UNSURE

Please add anything you feel is important or signifi cant about the incident: _______________________________________________

___________________________________________________________________________________________________________

Fill in the information below for the driver of vehicle at fault:

Name: ______________________________________________________________ Phone: _____________________________

Address: ___________________________________________________________________________________________________

Policy number: _______________________________________________________

Attorney name: _______________________________________________________ Phone: _____________________________

Personal injury questionnaire

Today’s date: ______________ Name: ________________________________________________________________________ First Middle Initial Last

Accident date: ________________ Time of accident: _____________ AM PM

How did the injury occur? ______________________________________________________________________________________

Do you have an attorney? YES NO If yes, provide name and phone contact information:

Name: _____________________________________________ Phone: ____________________________________________

Did you have any physical complaints before the incident? YES NO If yes, describe: _____________________________

Do you have any illnesses or previous injuries that may have been affected by this injury? YES NO

If yes, describe: ______________________________________________________________________________________________

Describe any bruises, cuts, or abrasions as a result of the injury: _______________________________________________________

Did you feel pain immediately: YES NO If yes, where? ____________________________________________________

If no, when did you start feeling onset of signs and symptoms: Date: __________________

(Circle one) SUN MON TUE WED THU FRI SAT Hours after accident: ____________Initial signs and symptoms: ____________________________________________________________________________________

Numbness/tingling in: _________________________________________________________________________________________

Pain/stiffness in: _____________________________________________________________________________________________

Other symptoms experienced since the incident? ____________________________________________________________________

Since the injury, symptoms are: Worse Improved Changed No change

Describe: ___________________________________________________________________________________________________

Does anything relieve your symptoms? ___________________________________________________________________________

Does anything aggravate your symptoms? _________________________________________________________________________

After incident I went: Home Hospital ASAP Later VIA: Ambulance CarHospital Procedures: X-Rays Laboratory tests Other: _________________________________________

Hospitalization: _____________________________________________________________________________________________

Prescription: ________________________________________________________________________________________________

Diagnosis: _________________________________________________________________________________________________

Instructions: ________________________________________________________________________________________________

Page 22 INFORMED

Went to Doctor’s offi ce:Dr. name: ___________________________________________ Date: ___________ Time: ____: ____ AM PM

Other health care providers who have treated you for this injury:

Name: _____________________________________________ Name: ____________________________________________

Type of treatment: ____________________________________ Type of treatment: ___________________________________

Diagnosis: __________________________________________ Diagnosis: _________________________________________

Have your work responsibilities changed as a result of the injury? YES NO

Have your daily activities changed as a result of the injury? YES NO

Restrictions due to the injury or condition. (Check all that apply specify pound and frequency as appropriate and explain):Lifting: ____________________________________________ Pushing/pulling: ____________________________________

Bending/stooping: ____________________________________ Kneeling/squatting: __________________________________

Twisting: ___________________________________________ Use of extremities:___________________________________

Standing: ___________________________________________ Walking: __________________________________________

Siting: _____________________________________________ Repetitive motions: __________________________________

Driving: ____________________________________________ Vibrations: _________________________________________

Climbing: __________________________________________

Splints/crutches/bandages: _____________________________________________________________________________________

Other conditions (E.G., dry work only, no heat exposure, etc.): ________________________________________________________

What other work activities are affected by this injury? _______________________________________________________________

Have you injured this area before? YES NO If yes, when? _______________________________________

During normal activities, do you favor any part of the body? YES NO

If yes, describe: ______________________________________________________________________________________________

Please add anything you feel is important or signifi cant about the incident: _______________________________________________

Billing informa on formThe three following forms, the billing information form, the insurance verifi cation form, and the HCFA 1500, which is the basic health insurance form used by insurance companies, are all closely associated with the approval process. The billing information form duplicates the fi rst part of the HCFA 1500, with identifi cation and contact information for the patient and the injured, if different, and details regarding primary and secondary insurance coverage.

You will need to collect contact information for the patient, insurance companies and representatives, the attorney and the primary health care provider. Patients involved in auto accidents may retain an attorney, who may review or collect the bills from all health care providers before sending them on to the insurance company. Therefore, you may need the attorney’s address and contact information to coordinate bill payment, and keep him/her apprised of billing status. Attorneys may ask the patient to sign an exclusive medical release of health care document to prevent

the insurance company of the at-fault individual from obtaining information without knowledge and consent of the attorney. In that case, all signatures releasing medical forms are made null and void.

Billing authorization statements authorize the insurance company to pay the provider directly and authorize the provider to release medical records to the insurance company in order to process claims.

Some people also include a short form of HIPAA with a release of records and an additional payment agreement with terms of payment accepted.

The fi nal part of the billing information form is a section with three statements that must be signed to show authorization by the patient. The statement of fi nancial responsibility is included here to remind patients they are ultimately fi nancially responsible for services. This statement should include any terms of payment or penalties for late fees, etc. The patient signs to confi rm he/she is aware of the terms of payment and penalties.

INFORMED Page 23

Billing Information Form

Patient information:Name: _____________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone 1: ____________________ Phone 2: _____________________ Phone 3: ________________________

Social Security Number: _______________________ Date of Birth: __________ Gender: M F Marital Status: S M

Employed: Full time Part time Retired Unemployed Student: Full time Part time

Employer and/or School Name(s): _______________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone: ______________________________ Fax: ________________________________

Injury Information:Patient’s condition is related to: Employment Auto accident Illness Other ____________________________

If auto accident, provide state: __________________________

If other, describe: ____________________________________________________________________________________________

State of occurrence: If gradual, date of fi rst Dr. appt: ______________ If injury, date of injury: ______________

Dates unable to work, if any: from: ______________ to _____________ Date of emergency room visit, if any: _______________

Hospitalization, if any: from: __________ to __________

Primary health care provider/prescribing physician:Name: _____________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone: ______________________ Fax: ________________________

Physician ID number ___________________________________________

Diagnoses/number of visits prescribed by Dr: ______________________________________________________________________

Insurance information:Workers Compensation: Employer at time of Injury: _________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone: ______________________ Fax: ________________________

Relationship of patient to the insured: Self Spouse Child Other: __________________________________

Fill in the following for insured if different from patient:

Name: _____________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone 1: ____________________ Phone 2: _____________________ Phone 3: ________________________

Social Security Number: _______________________ Date of Birth: __________ Gender: M F Marital Status: S M

Employed: Full time Part time Retired Unemployed Student: Full time Part time

Employer and/or School Name(s): _______________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone: ______________________________ Fax: ________________________________

Primary insurance coverage: Insurance company name: ______________________________________________________________________________________

Address for billing/claims: _____________________________________________________________________________________

Adjustor/contact: ____________________________________ Phone: __________________ Fax: ___________________

Insured’s ID number: _________________________________ Claim or case number: _______________________________

Policy/Group number: _________________________________ Plan name or number: ________________________________

Number of visits authorized by insurance: _________________________________________________________________________

Page 24 INFORMED

Secondary insurance coverage:Insurance company name: ______________________________________________________________________________________

Address for billing/claims: _____________________________________________________________________________________

Adjustor/contact: ____________________________________ Phone: __________________ Fax: ___________________

Insured’s ID number: _________________________________ Claim or case number: _______________________________

Policy/Group number: _________________________________ Plan name or number: ________________________________

Number of visits authorized by insurance: _________________________________________________________________________

Attorney:Name: _____________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________

Phone: ______________________________ Fax: ________________________________

ASSIGNMENT OF BENEFITS:To the insurance company, _____________________________,

By signing below, I authorize and direct payment of medical benefi ts for services billed to my health care provider. I instruct you to make payment directly to the provider for medical claims submitted by them on my behalf for medically necessary treatment. This will also serve as a “Limited Power of Attorney.” Please provide them all information related to my insurance coverage and benefi ts.

Release of records per HIPAA privacy statement:To the health care provider, _____________________________,

By signing below, I authorize that I have read and understood the privacy practices under HIPAA, and authorize you to release to any attorney, health care provider, or insurance company agents involved in the case, any medical or other records, including intake forms, chart notes, reports and billing statements or any other information necessary to process my claim. I understand these records may be used for the recovery of benefi ts. I will inform my practitioner immediately upon signing any exclusive Release of Medical Records with my attorney.

Payment agreement:It is my responsibility to pay for all services provided. In the case that my insurance company denies payment or makes only a partial payment, I agree and acknowledge that I am responsible for paying the balance.

Patient signature:___________________________________________________________ Date:_______________

The insurance verifi ca on/benefi t authoriza on formThe Insurance verifi cation/benefi t authorization form puts much of the insurance information in one detailed document. You may already have some of this information fi lled out from the preverifi cation process. Even so, it is best to reconfi rm all information to ensure it is still valid. You will likely use this form to fi nd contact information for the referring or primary health care provider, attorney, and the insurance company representative or human resources personnel, for the patient’s employer. Complete the form for any patient seeking insurance reimbursement.

Regarding employment: If insurance coverage is through the patient’s job (either workers’ compensation or a group health insurance plan) you must verify that the patient is employed and eligible for benefi ts. You will verify eligibility through the patient’s insurance representative fi rst. If you cannot verify eligibility through the insurance representative, contact a human resource representative or benefi ts’ administrator at the patient’s place of work. Ask whether the patient is currently employed, their length of time at the company, when insurance coverage became effective, and when it expires. Some information does not apply to all types of coverage. If any area does not apply, cross it out and write NA (not applicable) in the space.

You will want to reconfi rm that manual therapy is a benefi t in the patient’s plan of coverage. Ask if massage therapy, specifi cally, is covered. If manual therapy is covered, ask who can provide the service. Reconfi rm that you are eligible to provide this service.

You will likely need preferred provider status or have a provider number to be eligible for payment. In some cases, manual therapy is only available if provided by a nurse or doctor. You will need to specifi cally confi rm your title and relationship to the HCP in cases where you are billing under the license of a primary health care provider.

Confi rm eligibility including the specifi c ICD codes or the diagnosis from the prescription. In cases where the HCP wrote information without providing the ICD code and the insurance company requires an ICD code to be identifi ed on the billing form, call the HCP and get the relevant ICD code.

If a diagnosis code is not authorized, ask for clarifi cation as to the reason. In some cases, a code is too specifi c or for some other reason is not considered an authorized diagnosis for the treatment. In that case, use a general ICD code. If a code is denied, ask the insurance representative for a list of the permissible codes for the condition. Then, as long as you do not misrepresent the patient’s diagnosis, you can call the referring HCP to request that a different diagnosis code be written on the prescription.

Reconfi rm that the specifi c treatment you supply is a covered benefi t. As you work with this information, you will learn what manual therapy procedural codes fall within your scope of practice as a massage therapist. A patient’s insurance plan may not reimburse for all the codes available for you to use. Check each CPT code with each different insurance plan. If you are a contracted provider, the reimbursable codes will be specifi ed in

INFORMED Page 25

your fee schedule. In those cases, fi ll in this section’s information according to the terms in your contract. If you do not have this information, put together a list of the treatments you provide and fi nd the CPT codes with which they correspond. Make a list of the description of each service and its CPT codes. CPT codes for manual therapy are in CPT code books developed by the American Medical Association. New codes for massage therapists may be available soon.

Ask the insurance representative from each company the following questions regarding CPT codes listed:

● Is the code reimbursable under the patient’s plan? ● Am I eligible to provide this service? ● Are there any restrictions or exclusions for the code? ● Is there a limit to the reimbursable amount per unit of time

(fee cap)? ● Is there a limit to the amount of time I can bill for each session

(unit cap)?

Note if there are any limits, either on the total number of sessions or the total dollar limit for manual therapy for a policy year. Usually plans limit care to a number of visits per year or coverage up to a certain amount. Each year, the benefi ts are renewed when the policy is renewed.

Managed care usually requires a deductible that the patient pays out-of-pocket before coverage of any kind begins. Find out whether a deductible applies to your services, the amount and if any portion of it has been paid yet. If it has not, the patient should pay the deductible at the time your services are rendered. Submit patients’ bills to the insurance carrier, showing the amount paid so the payments can be put toward the deductible. Once the deductible is paid, bills should be directed to the insurance company. Also fi nd out when the policy is due for renewal, as the deductible will need to be paid again.

Most health care plans require a “co-pay,” a portion of the health care visit due the day service is provided. Co-pays must be collected from the patient on the day of service. Do not fail to collect the co-pay as some insurance providers consider it a breach of contract. Other plans require a co-insurance payment, rather than a co-pay. Co-insurance is a percentage of the service fee, rather than a set fee. It must be collected from the patient at the time of service.

Ask the insurance representative for verbal authorization to provide services to the patient. Request an authorization number for services, and verify the number of sessions authorized and dates for providing service. In most cases, you will have to authorize services at one point, then authorize payment once

the bills have been submitted. Verify the reauthorization date: If ongoing treatment is necessary, when should re-authorization occur so there is no gap in service?

Confi rm that bills should be submitted on an HCFA 1500 form. Most insurance companies prefer electronic billing, and will provide a link to their on-line form. Check whether copies of the patient’s fi le should be sent with the bills. If so, what specifi cally should be copied. It is useful to ask the estimated turnaround times for payment and any special requirements of the insurance company.

Send a confi rmation letter reviewing authorization of services. Include a copy of the insurance verifi cation form. If a claim is completely and accurately fi led out, verbal authorization is suffi cient for reimbursement. However, the confi rmation letter ensures that the insurance company has the authorization on fi le. Note the date the letter was sent on the verifi cation form before sending a copy. Repeat all verifi cation info when you require reauthorization for further services or treatment.

On the insurance verifi cation form, date and initial each piece of information as you fi ll it out (it may take more than one day). In cases of personal injury, contact the attorney if one has been retained. If the patient has not retained an attorney, ask for a copy of the car insurance policy and contact the insurance claims adjustor to verify patient information.

Document any information about health care liens and attorney liens. If PIP, MedPay, or secondary coverage does not exist or is exhausted, you can fi le liens on the patient and attorney according to the laws of your state. Health care liens may need to be renewed before the expiration date, so note the date fi led and dates renewed in your notes. (Typically, one should note the date the guarantee was requested from the attorney, and the date returned and fi led. Note expiration dates wherever applicable. If the secondary coverage is the patient’s health insurance, fi ll out the benefi t authorization section as well as secondary coverage section.

If a motor vehicle accident occurred while the patient was on the job, fi ll out employer information. Otherwise, employment and benefi t information does not apply to personal injury cases.

For PIP or MedPay coverage, note the total amount of the benefi t and the dates it is available and the amount currently available. You may need to speak with the patient, the insurance carrier and /or the attorney to fully investigate the exact amount of benefi ts available. In many cases, you will need the patient to ask the insurance carrier representative directly, as he or she is not authorized to divulge this information to you.

Verifi cation of Insurance Coverage/Benefi t Authorization form(Complete one form for each incident)

Section I: (Confi rm as much of Section I as you can using form A or speaking to the patient directly, before speaking to the insurance company representative)

Date:_________________________________ Time of call:___________________________

Insurance company name:_________________________________________ Phone number:_________________________

Adjustor/claim rep name:__________________________________________________________________________________________

Patient’s name and Social Security number:Name: _______________________________________________________________________ SS number:________________________

Insured’s name and Social Security number:

Name:_______________________________________________________________________ SS number:________________________

Page 26 INFORMED

If Workers’ Compensation, employer name and phone number:

Name:_______________________________________________ Phone___________________________________

Date of injury/illness:_______________________ Case or Group number:_____________________

Claim number:____________________________ Insurance identifi cation number: _________________________________

Section II [Refer to the patient information form (health history), or ask the insurance representative, patient, and/or attorney’s offi ce to fi ll out this section.]

Patient employment:Employer:_____________________________________________ Phone/Fax:_______________________________

Contact name:__________________________________________ Title:____________________________________

Currently employed? Yes No Effective date of benefi ts:________________ Expiration date of benefi ts:_________________

Verifi cation date:__________________________________ Time:_______________________________

Primary health care provider:Name: _______________________________________________ Title:____________________________________

Phone/Fax: ______________________________________________

Attending provider for this injury/illness? Yes No Referring provider for massage/manual therapy? Yes No

Prescription received? Yes No If yes, Date:_________________

Tx duration/frequency:___________________________________ Diagnosis [ICD-10 Code(s)]:______________________________

1st renewal date:_____________ Number of Tx:____________________ Tx duration/frequency:_________________________

2nd renewal date:_____________ Number of TX:____________________ Tx duration/frequency:_________________________

3rd renewal date:_____________ Number of TX:___________________ Tx duration/frequency:_________________________

Attorney: Name of fi rm: _________________________________________ Phone: _____________________ Fax: _____________________

Name of attorney:_________________________________________________________

Other contact (i.e., secretary or paralegal) Name and title:____________________________________________________________

Guarantee of payment fi led? Yes No If yes, date:_____________________________________________

Medical lien fi led? Yes No If yes, date:_____________________________________________

Medical lien renewed? Yes No If yes, date:_____________________________________________

Copy of patient fi le:1st date requested:_______________________ Date sent:______________________

2nd date requested:______________________ Date sent:______________________

3rd date requested:_______________________Date sent:______________________

Section III(You will fi ll out most of Section II and Summary by contacting each insurance company)

Insurance: Private health insuranceVerifi cation date: _______________________ Time:_________________________

Company name:__________________________________________________________________________________

Contact name:_________________________________________ Title:________________________________________________

Phone:________________________________ Fax:___________________________

Worker’s Compensation (L&I)Verifi cation date: _______________________ Time:_________________________

Company name:__________________________________________________________________________________

Contact name:_________________________________________ Title:________________________________________________

Phone:________________________________ Fax:___________________________

Current status of claim: Open; Date: __________________ Closed; Date: _______________

Date(s) reopened, if any:___________________________________________________________

INFORMED Page 27

Personal Injury InsurancePrimary insurer:____________________________________________________________________________________________

Adjustor:______________________________________________

Billing address:____________________________________________________________________________________________

Phone:___________________________ Fax: __________________________________

Verifi cation date:________________________ Time:______________________________

Policy coverage dates: _____________________________ PIP amount on policy: $_____________ PIP still available $____________

MedPay coverage dates: _______________________ MedPay amount on policy: $___________ MedPay still available $____________

Secondary insurer:_________________________________________________________________________________________

Billing address:_________________________________________________________________________________________________

Adjustor:______________________________________________

Phone:___________________________ Fax: __________________________________

Verifi cation date:________________________ Time:______________________________

Policy coverage dates: _____________________________ PIP amount on policy: $_____________ PIP still available $____________

MedPay coverage dates: _______________________ MedPay amount on policy: $___________ MedPay still available $___________

Third-party insurer:__________________________________________________________________________________________

Billing Address:________________________________________________________________________________________________

Adjustor:______________________________________________

Phone:___________________________ Fax: __________________________________

Verifi cation date:________________________ Time:______________________________

Policy coverage dates:_____________________ Liability policy amount:$_____________ Amount available: $____________

Uninsured/underinsured motorist (UIM): $__________________ Policy amount: $_______________ UIM available: $____________

1. Is manual therapy a benefi t covered by the patient’s policy? Yes No

2. Is the patient eligible for the manual therapy benefi t? Yes No [Will need diagnosis and ICD-10 codes]

3. Am I eligible to provide the manual therapy services? Yes No [Provide professional license/certifi cation information] ● If an answer above is “no,” bill the patient for manual therapy services ● If the answer to all three questions is “yes,” continue verifi cation questions below

4. Which manual therapy services are authorized? Service 1:______________________________ CPT Code:_____________________

Any restrictions/limitations (i.e., max units and reimbursement rate allowed?________________________________________________

Service 2:_____________________________ CPT Code:________________________________

Any restrictions/limitations (i.e., max units and reimbursement rate allowed)?_______________________________________________

Service 3:_____________________________ CPT Code:________________________________

Any restrictions/limitations (i.e., max units and reimbursement rate allowed)?_______________________________________________

Service 4:_____________________________ CPT Code:________________________________

Any restrictions/limitations (i.e., max units and reimbursement rate allowed)?_______________________________________________(Add lines as necessary)

5. Requires a deductible? Yes No Amount: $____________ Deductible paid? Yes No Amount: $______________

What date will the next deductible be due?_________________

6. Requires a co-payment? Yes No Amount: $_____________

7. Does co-insurance apply? Yes No Amount:$______________

8. Limit on the number of sessions allowed per policy year? Yes No Total per year per incident;___ Number currently available:___

9. Limit on total dollar amount spent on services per policy year? Yes No Total $ amount: $_________________

Total currently available: $__________________

10. Authorized treatment dates:_______________ to ____________

11. Authorized number of sessions: _______________

12. Billing requirements:

Page 28 INFORMED

a. Preferred billing method: HCFA 1500 Other:____________

b. Bill must be sent with: Proof of license/certifi cation Prescription SOAP Progress Report Other (1) Other (2)

c. Anticipated turnaround time for reimbursement ?

13. Are you able to authorize payment? Yes Authorization number: ___________________________________

Name:________________________________________________ Title:____________________________ Date:_______________

No Please connect me with someone able to authorize payment

Name:________________________________________________ Title:____________________________ Date:_______________

14. Re-authorization

Name:______________________ Title:______________________

Phone:______________________ Fax:_______________________

Re-verifi cation date:_______________ Time:__________________

Authorized treatment dates:_______________ to _______________ Authorized number of sessions:______________________________

Is payment authorized? Yes Authorization number: ________ No Deductible Paid? Yes No Amount: $______________

Total number of sessions [______] and total amount spent [$_______ ]as of current date.

*A copy of this form with confi rmation letter was sent to the insurance representative on this date:

The HCFA-1500 claim formThe following section reviews the HCFA-1500 billing form. For a free on-line copy of the electronic form, go to: http://www.dol.gov/esa/regs/compliance/owcp/OWCP-1500.pdfThis form was created by the Health Care Finance Administration (HCFA), which has become the form for insurance reimbursement and receipt for patients. Do not attempt to use your own billing forms; they will not be processed. Each question on the form is explained below.

The form can be fi lled out online and fi led electronically to expedite processing. Some insurance companies even require this. However, because you will usually be submitting the HCFA 1500 with other forms and information that cannot be electronically fi led, electronic billing is not usually an option. Some useful notes for submitting this form are:

● Use the following font: “Courier New” size 10 type. ● Use forms with preprinted barcodes at the top. ● Use one claim form for each appointment. ● Use a separate claim form to bill an evaluation (do not

combine with other services). ● Confi rm you are using the most current CPT codes (especially

since HIPAA has meant the loss of grace periods for recently changed or discontinued codes.

One expert considers it easier to bill once you have registered a trade name with your state, which will be listed as a “dba” (doing business as), along with your name and qualifi cations.5

Instruc ons for comple ng the form: Item 1. For personal injury or Workers’ Compensation cases, check “Other” and write the claim number in 1a. For group health insurance, check the group health plan box and write the patient’s social security number or the insurance ID number in space 1a.

Item 1a. Enter the insured’s (the policyholder’s) insurance ID number. For health insurance, this used to be the Social Security number, but due to HIPAA, may be another identifi cation number; for Workers Compensation, put the case number; for MVA, use the claim number.

Item 2. Enter the patient’s last name, fi rst name, middle initial. If the patient is also the insured, record “same” as the insured’s name in item 4. If the insured is someone other than the patient, fi ll in the insured’s name address and phone number.

Item 3. Enter the patient’s date of birth (MM/DD/YY) and check appropriate box for patient’s sex.

Item 4. If the patient is also the insured, write “same” as the insured’s name. This is the policy owner, which in Workers Comp cases would be the employer.

Item 5. Enter the patient’s address (street address, city, state, ZIP code; telephone number is optional).

Item 6. Write the patient’s relationship to the insured. (“Other” is typically reserved for the employer in a Worker Comp case.)

Item 7. The insured’s address; if the patient is the policy holder, write “same.” It could be the employer of the patient, the individual with primary insurance covering the accident, or someone else.

Item 8. Write patient marital and employment status.

Item 9. Write any second-party coverage that will contribute money to the claim. It should be the policyholder’s information. In some cases the secondary insurance will cover a deductible or co-payment amount as well as pay additional medical costs after the primary insurance coverage is paid out. It could be the patient’s car or health insurance.

Item 10. Write what the patient’s condition is caused by.

Item 11. The insured’s policy number (could also be the group plan number, claim number or Social Security number). It is usually the number that specifi es the insured’s type of insurance plan.

Item 11a. Insured’s (policyholder’s ) date of birth and sex.

Item 11b. Write the employer’s name or school name if the institution is providing the insurance plan. Leave blank for personal injury cases unless the injury occurred at work.

Item 11c. The insurance plan name or the program name.

Item 11d. If there is another health benefi t plan, check yes and complete section nine.

INFORMED Page 29

Page 30 INFORMED

Item 12. The signature of the patient or authorized representative is required to authorize release of the medical information necessary to process the claim, and requests payment. However, if the individual has signed a release as part of the billing information form, you can note, “signature on fi le,” instead of having the patient sign every claim form. The date noted with the signature should be the date the patient signed that form.

Item 13. This signature authorizes the insurance company to pay the health care provider directly. If a signature is on fi le, note “signature on fi le,” and the date it was signed.

Item 14. The date of accident, illness or injury.

Item 15. Leave blank.

Item 16. Leave blank.

Item 17. Leave blank.

Item 17a. Write the ID number of the referring physician. Do not leave blank!

Item 18. Leave blank.

Item 19. Leave blank.

Item 20. Leave blank.

Item 21. Enter the diagnosis(es) of the condition(s) being treated using current ICD codes. This must be what was diagnosed by the doctor on the prescription or referral. Each diagnosis must be within your scope of practice. Enter codes in priority order (primary, secondary condition). Coding structure must follow the International Classifi cation of Disease, 9th Edition, Clinical Modifi cation or the latest revision published. A brief narrative may also be entered but not substituted for the ICD code. It is best to limit this section (each form) to no more than four diagnosis codes.

Item 22. Leave blank.

Item 23. Leave blank or use the referral number from the health care organization

Item 24. Column A: enter month, day and year (MM/DD/YY) for the date of service. Write the same date in both the “from” and “to” sections.

Column B: enter the correct “place of service” (POS) code (see below). The insurance company may require a specifi c place of service code, so ask this question of each insurance company. Note that 11 or OF means your offi ce and 12 or HM refers to the patient’s home.

Place of Service (POS) Codes for Item 24B3 School 4 Homeless shelter 5 Indian health service free-standing facility 6 Indian health service provider-based facility7 Tribal 638 free-standing facility 8 Tribal 638 provider-based facility 11 Offi ce 12 Patient home 15 Mobile unit 20 Urgent care 21 Inpatient hospital 22 Outpatient hospital23 Emergency room – hospital 24 Ambulatory surgical center 25 Birthing center

26 Military treatment facility 31 Skilled nursing facility 32 Nursing facility 33 Custodial care facility34 Hospice41 Ambulance – land42 Ambulance – air or water50 Federally qualifi ed health center51 Inpatient psychiatric facility52 Psychiatric facility partial hospitalization53 Community mental health center (CMHC)54 Intermediate care facility/mentally retarded55 Residential substance abuse treatment facility56 Psychiatric residential treatment center60 Mass immunization center61 Comprehensive inpatient rehabilitation facility62 Comprehensive outpatient rehabilitation facility65 End stage renal disease treatment facility71 State or local public health clinic72 Rural health clinic81 Independent laboratory99 Other place of service

These letter codes are also used:AC: ambulatory surgical centerER: Emergency roomHM: Patient’s homeHS: HospiceIH: Inpatient hospitalNH: Nursing homeOH: Outpatient hospitalOF: Practitioner’s offi ce

Column C: The type of service: Ask the insurance company what code to use. It may be a 9 for ancillary services or a capital “AE” for physical medicine (which should be written in capital letters, without quotation marks. Check with your insurance carrier to confi rm this code; they may prefer a different listing).

Column D: Enter the proper fi ve-digit CPT (current edition) code and modifi er(s), that most appropriately describes the physical medicine modalities you provide, for example 97010. It must be what the prescription calls for and be within your scope of practice. Use no more than 4 codes per date of service. Companies will only pay for approved codes. This section may also refer to the HCPCS, or the OWCP generic procedure code.

Column E: Enter the diagnostic reference number (1, 2, 3 or 4 in Item 21) to relate the date of service and the procedure(s) performed to the appropriate ICD code, or enter the appropriate ICD code. Box 21 will have up to four diagnosis codes with corresponding CPT procedures in box 24d. Here, you will need to reference which diagnoses were treated with which CPT procedures. For example, if you used traction to treat diagnosis No. 1, put 97140 next to 1. Fill in the number(s) for only those conditions you were able to address in the session or appointment.

Column F: Enter the total charge(s) for each listed service(s). Do not write in the value of each individual unit of service; instead add all units together and write total.

Column G: Enter the number of services/units provided for period listed in Column A. Experience suggests that it is best to break down services/units into single units; meaning No. 24 G should always be fi lled with “1.”

INFORMED Page 31

Column H: Leave blank.

Column I: Leave blank.

Column J: Leave blank.

Column K: Leave blank.

Item 25: Enter the federal Identifi cation number (tax I.D), or, if you don’t have one, your Social Security number, and check the appropriate box.

Item 26: The provider may enter a patient account number that will appear on the remittance voucher. This is the number that you assign them in your offi ce. It is not necessary but serves as a good reference.

Item 27: Check “yes” to have them send the check directly to you.

Item 28: Enter the total charge for the listed services in Column F. (Only include the total charges on this specifi c claim form; do not combine totals from multiple claim forms).

Item 29: If any payment by the patient has been made, enter that amount here. Otherwise, leave blank.

Item 30: Enter the balance now due. Should be the same as item 28.

Item 31: Sign and date the form. Signature stamp or “signature on fi le” is acceptable.

Item 32: Enter complete name of hospital, facility or physician’s offi ce where services were rendered, if not home or offi ce.

Item 33: Enter (1) the name and address to which payment is to be made, and (2) your credential (typically your LMT), and (3) your phone number. Put your license number after “PIN No.” if you are an individual provider, or after “GRP No.” if you are a group provider.

FAILURE TO ENTER THIS NUMBER WILL DELAY PAYMENT OR CAUSE A REJECTION OF THE BILL FOR INCOMPLETE/INACCURATE INFORMATION.

Submi ng claims and a achmentsEach HCFA-1500 form you send will need to be accompanied by progress notes and a prescription, referral or medical necessity form. All accompanying forms are referred to as “attachments.” They should be mailed with the claim form. Rules change all the time, so confi rm everything with a knowledgeable contact person at each insurance company with whom you work.

A massage therapist must have one of the following to begin treatment:

● A prescription (including the plan of treatment, diagnosis or diagnoses, and the number of treatments that should be provided).

● A written referral. ● A statement of medical necessity signed by the doctor.

Insurers will pay only four therapeutic procedure units for one day of service (if at least two body areas are diagnosed for treatment) to all providers involved. Than means, if another health care provider bills four units on one service date, you will be unable to bill any units for that same date of service. Further, a health care provider may not provide the same physical medicine procedures as another provider on the same date of service (concurrent care). The best way to avoid potential double-billing or billing over the maximum number of treatments allowed is to provide your services on a day no other services are provided.

On each date of service, only bill a maximum of 2 units of therapeutic procedures per body area, and a maximum total of only four units for one date. In billing the maximum of four, you would be treating more than one diagnosed body area. [In the world of insurance reimbursement, the body has three main areas: the upper extremities; the torso (which includes the head and neck), and the lower extremities.] Even if diagnoses for all three body areas exist, you are limited to two units of therapeutic procedures per body area (meaning no more than four per date of service). Additionally, even when there are a number of diagnoses for one body area, a total of only two therapeutic procedure units per one date of service can be used (not two per each diagnosis).

Each therapeutic procedure unit is a 15-minute segment. Because you are limited to either 2 therapeutic procedures (for one diagnosed body area) or 4 therapeutic procedures (for two diagnosed body areas, the maximum treatment time on any one date of service is limited from 30 minutes to one hour.

Never list more than one unit per line item in area No. 24 G (days or units) on the HCFA form. If you use a combination of therapeutic procedures, break them down into 1-unit increments to fi ll out the form. It is acceptable to charge for more than one therapeutic procedure on one day of service. Treatments end when maximum medical improvement is reached. You will not be paid for services or treatments that exceed that date of service (DOS), even if you have not reached the maximum allowable treatments for that day.

Here is a list of helpful hints for submitting the bill (HCFA-1500) and attachments:6

● Submit HCFA forms in large envelopes so the forms inside will not need to be folded. Automatic reading and processing by machines is made more diffi cult by folded or creased forms.

● Submit the original HCFA-1500 form, not a photocopy. ● Do not staple anything to the HCFA-1500 form. Simply fold

attachments in with the bill. ● Bill only one date of service on each claim form. Sending

bills in regularly and frequently (rather than billing multiple dates of service for the same patient at one time) will facilitate faster payment.

● Use appropriate codes. See the following sections on CPT and ICD codes. Avoid using more than two CPT codes and two ICD codes on each HCFA-1500 form.

● Keep bills under a few hundred dollars, if possible. Smaller amounts tend to be paid automatically, while large or less frequent billing tends to undergo greater scrutiny or require review.

● On each date of service, only bill a maximum of 2 units of therapeutic procedures per body area, and a maximum total of only four units for one date. (See concurrent care info.)

● Send claims and all other insurance-related forms by certifi ed mail with return receipt requested. You can send a number of claims in one envelope, but it is best to avoid sending more than one claim for each patient. It is well worth the extra postage.

● Most states require submission of claims within 30 days of the appointment. Refer to the insurance commissioner’s offi ce in your state’s capital to fi nd out how long you have to submit bills to insurance companies and how long insurance companies have to pay after receipt of a claim. Stay within these time frames and call the insurance company to check status soon after fi ling. In Florida, health care providers are allowed to extend the period of time to greater than 30 days if

Page 32 INFORMED

they provide a notice of initiation of treatment to the insurance company within 20 days after the fi rst treatment.

● Keep a copy of all the materials sent to the insurance company, especially the HCFA-1500.

HIPAA ended a grace period for the use of outdated codes. Verify codes before you send in the claim. The referring or prescribing doctor typically has a person dedicated to billing or a paralegal in the offi ce who can answer most questions. Verify the prescribed treatment plan and insurance coverage with this individual. Verify the time allowed for treatment and number of treatments allowed in total. Verify everything.

ICD and CPT codesCPT stands for current procedural techniques. These and ICD codes (international classifi cation of disease) are developed by the American Medical Association and updated about once every 10 years. They are used in physician’s prescriptions and medical necessity forms, the documents you will use to guide your treatment plan. Most of the codes used by massage therapists are physical therapy codes, as massage therapists do not yet have their own category of codes. You must be properly trained and licensed for whatever services you offer (see scope of practice, below).

The following codes are commonly used by massage therapists, but you should realize that there is some controversy regarding many codes. Insurance companies may provide codes that you can not legally bill, and every agency or institution may have its own ideas about which codes are appropriate. For example, some companies consider 97214 “relaxation massage” and will not accept it as a treatment code; others have no problem with it. Some companies will not allow billing for both 97214 and 97140 in the same session.

97122: Therapeutic procedure, one or more regions, 15-minute segment each [may include neuromuscular re-education, balance kinesthetic sense, posture, coordination, proprioceptive neuromuscular facilitation (PNF), etc..]

97124: Therapeutic procedure, one or more regions, 15-minute segment each (may include effl eurage, petrissage and/or tapotement). There is some controversy over this code.

97140: Manual therapy techniques, one or more regions, 15-minute segment each (may include manipulation, manual lymphatic drainage, mobilization or manual traction, etc.)

Another common treatment code used by massage therapists is 97010 (hot/cold packs).

ICD codes are diagnostic codes that must be furnished by a physician. As massage therapists are not able or allowed to diagnose conditions, it is critically important to have a referral/prescription or letter of medical necessity from the primary care physician. While some insurance companies may say this is unnecessary, this process protects you in situations where the case goes to court, arbitration or mediation.

Insurance is legally liable for payment of massage treatments if a doctor has determined that massage therapy is medically necessary. The doctor must include a treatment plan and signed statement that the medical treatment is medically necessary. The treatment plan comes directly from the prescription, using the specifi c modalities instructed by the doctor. You provide the therapy in your role as an ancillary provider, fulfi lling the treatment prescription according to the doctor’s instructions.

Before you begin any treatment plan, you must have the precise code for the specifi c condition or disease.

Scope of prac ceScope of practice refers to your area of competence, usually obtained through formal study, training and/or professional experience, and one for which you’ve received certifi cation or other proof of qualifi cation. Unlike other standardized training programs or fi elds of study, schools of professional massage therapy and state requirements vary signifi cantly in number of necessary hours of study and curriculum. Some schools provide substantial training in specialized procedures, such as lymphatic-drainage techniques or hydrotherapy, while others may only touch upon these subjects, if they are discussed at all.

Your scope of practice is defi ned, in part, by local licensing restrictions, which are sometimes very general. Within this legal parameter, massage therapists have some latitude in determining what modalities will constitute their practice. Misrepresenting your educational achievements, credentials or abilities is a serious breach of responsibility that endangers client safety and refl ects poorly on the profession as a whole. If a subject is outside your area of expertise, don’t hesitate to say so and direct the client to appropriate informational resources or professional services.

Choosing to provide services for which you are not appropriately trained or competent is a dangerous personal decision that undermines the profession and may carry weighty legal implications. Your personal level of discretion and ethical standards will largely determine the manner in which you advertise your services, describe your education and professional experience and list credentials. You will have to decide for yourself if you can rightfully claim substantive experience in a discipline for which you’ve attended a three-hour workshop or watched a series of instructional videos, or when you can properly call yourself an expert in one modality or another.

In insurance reimbursement, your scope of practice is circumscribed by three points: your qualifi cations, the doctor’s diagnosis and the doctor-prescribed treatments you carry out. Massage therapists are only able to legally provide certain services or treatments, regardless of a doctor’s diagnosis or treatment plan. Scope of practice has been a volatile issue in the fi elds of massage therapy and medical massage therapy for a number of reasons. In non-licensing states, competency and scope of practice is defi ned solely by the practicing individual’s claims.

In states that license massage, a governmental regulatory board establishes scope of practice for each state. Many of these rules are subject to interpretation. The ambiguity of these laws encourages professions to self-govern to a large extent. However, in massage therapy, this has worked to undermine the fi eld’s professional status. While the body of regulation for massage is largely undeveloped, massage therapists are required to correctly navigate these laws and protocols.

For example, most licensing states allow the use of cold or hot packs, but do not allow any mechanical devices beyond this modality. In Florida, a massage therapist can also use electrical stimulation and ultrasound, but only if the therapist is competent in these areas. Insurance companies, in guarding themselves from fraudulent claims submitted by unqualifi ed individuals, will examine your billings with a fi ne-tooth comb and are ever-vigilant in spotting problems like concurrent care billing, errors in coding,

INFORMED Page 33

diagnosis and work beyond the massage therapist’s scope of practice.

As a massage therapist, you are required to treat only and exactly what has been diagnosed by the doctor. In some cases, you may come across a diagnosis that does not specify the treatment of soft or superfi cial tissue. While many codes may be appropriate and safe diagnostic conditions, the insurance company must interpret your work based on what is written in the documents you submit. You may manipulate soft tissue only for the purpose of affecting the soft tissue around and encapsulated by the joint. Any time you submit diagnosis or a treatment plan dealing with a bone or joint, you are practicing outside your scope of practice, and you will not be paid.

Making suggestions or recommendations regarding basic stretching or exercise, for example, is not permitted. Doing so is prescribing treatment. While there are many different activities and exercises that complement massage therapy, they should not be a part of any treatment prescribed and paid for by insurance. As an ancillary provider, you have no latitude in suggesting treatments for the doctor’s patient.

Prescriptions must be followed exactly. This means the exact type of treatment and number of sessions specifi ed by the doctor. You will only be paid for what the doctor has prescribed. Again, there is no latitude for determining your own treatment approach. Needless to say, this is the easiest way to anger and alienate the medical community. Always discuss any suggestions with the doctor before mentioning them to the injured individual. There may be good reasons they have not been recommended by the doctor in the fi rst place.

Doctors may not hesitate to complain to the board of massage in your state if they feel you are practicing medicine without a license, which can result in disciplinary action or revocation of your license. For example, most massage therapists recommend drinking extra water, especially after certain types of massage. However, if the injured individual is taking a diuretic, it may be contraindicated. Similarly, recommending gentle stretches to someone recently injured in an auto accident is a dangerous mistake.

Documenta on Computer-based documentation is becoming increasingly common. Many health care facilities use templates and fi ll-in forms, both paper and computer-based, to save time in documenting initial evaluations, progress notes, reevaluations, discharge summaries, and physician progress updates. Examples of a daily health report form, and SOAP notes form have been included, but you will want to develop your own documentation forms appropriate to your work and scope of practice.

While fi ll-in forms and templates can facilitate treatment and improve consistency, it is important that practitioners not let the form “dictate” the session. Because forms can promote incomplete documentation, health care providers must be sure that forms contain all necessary information and have areas where you are able to add narrative comments, allowing you to describe aspects of the patient’s care that are not part of the standard forms. The instructions below should give you a general idea of what information to include inn your documentation and where.

Short history of medical documenta on7

Documentation in health care practices takes a variety of formats depending on the type of patients being treated, practice setting,

state laws and practice acts, and reimbursement requirements. Different documentation formats include narrative reports, problem-oriented medical records (POMR), SOAP, and functional outcomes reporting. A brief discussion of each of these formats follows.

Narrative documentation describes the practitioner’s encounter with the patient in a paragraph format. There may or may not be headings identifying important information. Narrative notes are useful when you just need to describe the details of a situation in the most straightforward form. Narrative documentation, however, lacks structure, which can mean important details may be left out. Additionally, there is no standardized format for narrative; each practitioner has a different style, which makes interpretation diffi cult.

For these reasons, more structured documentation formats were developed. Problem-oriented medical records (POMR) were introduced by Lawrence Weed for use by medical students documenting patients’ problems. The POMR system is centered around the identifi cation and resolution of the patient’s problems. Although the problem-based approach is also intended to lead to a diagnosis, the problem based approach prevents the clinician from “jumping to a diagnosis” with tunnel vision and potentially overlooking important aspects of the patient’s disease(s).

To make the presentation better organized and easier to follow, the fi rst page of the POMR is a list of the patient’s problems, which serves as a “table of contents” for the rest of the medical record. All the entries that follow, called progress notes, are organized according to the list in the table of contents. In each entry, the physician discusses the following dimensions of each one of the problems:

● Subjective data: Symptomatic data from the patient. ● Objective data: Test results and quantifi able assessments. ● Impression (Imp.): The practitioner’s impression of the

patient’s particular condition or problem. ● Treatment and therapy (Rx): That particular session’s

treatment or therapy for that specifi c problem. ● Immediate plans (Plan): Treatment plan related to that

problem.

The POMR is both comprehensive and problem-specifi c, and it is organized in such a way as to allow a physician to go directly to a specifi c problem without paging through lengthy narrative. This brevity typically results in improved communication among care providers. The POMR also provides a chronological sequence of interventions for each particular problem.

The POMR, has been criticized however, for separating or fragmenting patients into their component problems, which may encourage the practitioner to lose the “big picture” of the whole patient. There may be cases in which one health care provider or practitioner working with one area of the body might not be aware of a problem in another area if he or she has not read every separate chart entry. POMR charting for patients with more numerous conditions or complaints can become exceedingly complicated. An individual managing multiple problems would be responsible for multiple chart entries each visit, which could become very time-consuming.

SOAP is an acronym for “subjective, objective, assessment, and plan.” SOAP evolved from the POMR documentation format developed by Weed. As with the POMR, “S,” or subjective, should include anything the patient tells you pertaining to his

Page 34 INFORMED

or her injuries or problems. Subjective information can also be any information provided by the patient’s family or caregivers. The “O,” or objective, section should include relevant tests and measurements performed, the patient’s functional status, and physical therapy interventions performed for that day of service. Unlike the POMR, in the SOAP format, the physical therapy interventions are written in the objective portion of the note. The interpretation, or impression, has been designated “A,” for assessment. In SOAP format, the “P” stands for plan.

The purpose of a SOAP chart is to document the patient’s current condition, the therapist’s fi ndings and treatments, changes resulting from the treatment, guidelines for future treatments, and the patient’s homework. SOAP charting is a popular format for documenting treatment sessions in the health care fi eld, and is widely accepted by a variety of medical and rehabilitation professionals.

No longer associated with the POMR, SOAP charting has become a stand-alone format for documentation, and may or may not be preceded by a problem (“Pr”) section. When it does, the “Pr” section contains information pertaining to the medical diagnosis and/or referral information

In recent years, there has been increasing focus on functional outcomes reporting (FOR), in which soap notes demonstrate the effect of impairments on functional limitations. According to “Documentation Basics: A Guide for the Physical Therapist Assistant,” by Mia Erickson EdD, MS, PT, ATC; Becky McKnight MS, PT:

“Even though SOAP notes provide a consistent and concise format for documenting the patient’s subjective remarks, objective exam fi ndings, the provider’s overall impression, and the plan of care, the documentation procedure has been scrutinized recently. Several reasons for this scrutiny exist. First, objective fi ndings are often written in terms of impairments, such as range of motion, strength, balance, etc. Furthermore, links between improvements in the patient’s impairments and improved functional capabilities are usually implied, rather than described in detail. This often results in documentation centered around the patient’s complaints and impairments, rather than documentation that focuses on progress and improving function. In addition, SOAP notes usually don’t show how the interventions are contributing to functional improvements.”8

Functional outcomes reporting (FOR) is described as a type of documentation that focuses on the ability to perform meaningful functional activities, as opposed to focusing on isolated musculoskeletal, neuromuscular, cardiopulmonary, or integumentary dysfunction or impairment. FOR is considered advantageous for establishing a link between the patient’s impairments and his or her ability to perform functional tasks. To accommodate the movement toward FOR charting, some practitioners suggest combining FOR with the SOAP format, making the following additions to SOAP notes:

In the objective (O) Section, the practitioner should clearly describe the patient’s functional status, including functional activities that are required by that patient.

In the assessment (A) Section, list only those impairments or conditions being addressed with treatment or therapy. Describe how improvement in impairments will lead to improvement in functional limitations. Provide any complicating factors, and write patient objectives using functional terminology.

This section will review using SOAP as the basic structure for your notes, with an emphasis on FOR: that is, documenting the patient’s functional status; specifi cally linking impairments, functional limitations and interventions; and tying interventions with improvement.

SOAP notesMedical documentation of patient complaint(s) and treatment must be consistent, concise and comprehensive. Many medical offi ces use the SOAP note format to standardize medical evaluation entries made in clinical records. The acronym SOAP stands for SUBJECTIVE, OBJECTIVE, ASSESSMENT, and PLAN. The four parts of a SOAP note are outlined below.

The SOAP note is a brief report in the patient’s chart, completed the day of the appointment when the patient is seen. It is different from a comprehensive progress note which may accompany a diagnosis. The SOAP note should briefl y express the following:

● Date and purpose of the visit. ● The patient’s symptoms and complaints. ● The current physical exam. ● New lab data and results of studies, reports, assessments. ● The current formulation and plan for the patient.

Charting is a critical way for all health care workers to coordinate their care; to speak in the same clinical language, organize and record information, and chart progress together. SOAP notes also act as legal documents for potential use in litigation of personal injury cases, proof of improvement or restoration to pre-injury status and completion of functional outcomes.

As we have noted, there are many different “styles” in which medical records are written. A goal of any practice should be to have a uniform record keeping system that is consistently used by all members of the practice. A medical record should “speak for itself.” One should be able to read a well-written medical record and without ever having seen the patient be able to gain a comprehensive understanding of the patient’s medical care.

General principles of SOAP char ngWhen you are taking notes related to SOAP charting, write only pertinent, verifi able details and avoid ambiguous or extraneous information. Record information that addresses a concern or facilitates its solution. Brevity is important but do not leave out important details. Ask questions to confi rm or rule out specifi c conditions or injuries. Be factual and concise. Write with objectivity; avoid opinion or speculation. It is often useful to quote a patient directly, noting his/her words with the use of quotation marks.

It is also important to become well acquainted with common abbreviations. Many useful learning materials provide standard abbreviations used in most health care facilities. You will likely develop your own descriptions and abbreviations to suit your specifi c needs. Too much shorthand can be detrimental however, because others must be able to interpret everything you have written on the chart. Insurance company personnel will be depending on your notes.

If you include abbreviations that are unusual, add a key with a list of words you have abbreviated and what they stand for.

It is critical that you quantify, or measure, detailed information about the patient over a period of time, to document his or her injury/illness and rehabilitation. Insurance companies will be determining need for continued care from your descriptions.

INFORMED Page 35

Handwriting is important, and payment can be denied based on illegibility of notes. Sign or initial, and date, every chart entry. It is best not to use nicknames as these notes are legal documents. Your credentials as a health care provider are also a necessary part of the notes. Individuals in training, students or apprentices must also have a supervising practitioner sign chart notes.

Soap char ng with func onal outcomesAccording to Diana L. Thompson, who has written an authoritative account of SOAP note requirements for the purposes of massage therapy insurance reimbursement:

“The current trend in medical documentation is functional outcomes reporting: setting goals and designing treatments to improve function. This style of documentation addresses the patient’s ability to participate in everyday activities. Functional outcomes reporting fi ts into the SOAP format and shifts the focus of documentation to the patient’s quality of life. The practitioner records the patient’s functional limitations and works with the patient to develop goals for returning to personally meaningful activities, and together the practitioner and patient implement solutions to reach those goals.”9

No matter what kind of SOAP charting you do, you must address functional outcomes; that means your notes must describe your patient’s ability to function in daily activities, both work and non-work. Your notes will have to meet requirements set by insurance companies, your immediate company or employer, and other health care professionals caring for the patient. Together you will establish objectives that enhance function, returning the patient’s body to pre-incident status.

Functional outcomes should be written in terms of desired objectives that are established by the patient with help from the health care professionals. Patients and health care providers establish “goals,” the activities the patient is trying to accomplish, with some diffi culty. Each goal may be defi ned as one or more functional outcomes.

Discuss the patient’s needs, and determine, with him or her, some primary requirements. Keep these rules of thumb in mind: The information you write should be “SMART”:

S-pecifi c to a particular action.M-easurable: can be broken into subunits to show changes and improvements.A-ttainable or A-chievable: can be realistically accomplished by patient.R-elevant: necessary to the patient’s daily functioning.T-imely: A time-related activity.

Functional outcomes can involve work or leisure activities, but they should be bounded, with a specifi c function; in general, the more specifi c the better. Does standing to complete a certain activity wear the patient down? Is pushing a vacuum cleaner or a lawn mower impossible, putting on socks and shoes diffi cult? Sitting in one position at a desk, typing, painful? Break down the activity into basic movements and determine what specifi c parts of these actions cause pain. Activities intrinsic to childcare, like lifting an infant; self-care, putting on one’s shoes, reaching, sitting – all are necessary activities in caring for oneself and others. In cases of on-the-job injury, your primary objective is work-related activities that can be described in terms of functional outcomes.

Once the specifi c relevant activity is chosen, it must be defi ned in measurable terms – consider how progress toward the goal will be

quantifi ed. This can be done in a number of ways. For example, the activity can be performed for a certain duration-length of time, or number of repetitions, which can be increased over time. Record the patient’s desired status at the end or outcome of the activity: pain free, no fatigue with unlimited motion, etc.

Provide a time frame for completing the activity with the desired outcome status: First, establish long-term goals, if they are appropriate; those which may not be reached for a period of months. Then develop a number of moderately timed goals, attainable in a period of one to two months. Short-term goals may simply be the long-term objectives cut up into measurable or manageable increments.

Goals should never seem or be overwhelming; they must be attainable and realistic, and suffi ciently within reach to avoid needlessly frustrating the patient. Carefully evaluate the degree or severity of injury, and the patient’s general health status, to determine whether the goal is attainable in the allotted time-frame. It may be necessary over the course of treatment to readjust the time frame to approximate a specifi c patient’s healing abilities and speed.

Be realistic about your patient’s capabilities and understand the extent of injury fully; also be attuned to your patient’s degree of discomfort or pain during the activity. While pain reduction is important, it is not a functional outcome. If reducing or being free of pain is a part of the objective, discuss activities that are not pain free and break the activity into smaller more manageable, less painful movements.

Begin with a description of the injury status.

Ask the patient:What is a necessary (work-related) activity in which you are currently limited?

Then: ● Specify the active details of that activity. ● Break it down into useful units according to time. ● Prioritize functional activities in order of importance. ● Describe measurable results; standing for how long a period,

lifting a specifi c amount of weight, with a specifi c outcome status – being able to do complete the activity without pain medication or exhausting oneself, for example

Subjec veThe initial portion of the SOAP note format consists of subjective observations. These are symptoms given verbally to medical personnel by the patient or by a signifi cant other individual, such as a family member or friend. These subjective observations include the patient’s descriptions of pain or discomfort, the presence of nausea or dizziness, and any other descriptions of dysfunction, discomfort or illness or weakness.

In documenting the symptoms, conditions, or concerns of the patient, consider this guiding question: Why is the patient seeking treatment? Is it for an injury or condition, troubling symptoms, health maintenance issues, etc? While most of this information comes from the patient, other documentation, such as the prescription, may also provide test results or the diagnosis.

As discussed earlier, SOAP charts commonly include a “P” section (PSOAP), in which P stands for “Problems” (like in POMR) that may be contributed by individuals other than the patient. Note all health concerns, specifi cally those essential to daily function, then

Page 36 INFORMED

describe any actions that exacerbate or aggravate the symptoms, as well as those actions that relieve or reduce the symptoms.

To assist you in getting a full list of symptoms from the patient, you may want to review intake forms for pertinent background information: Record facts about the patient’s general condition and normal function, as well as any fatigue, pain or stress they are experiencing. The progress report form included in this chapter helps collect this information. You may want to specifi cally asking about the following conditions:

● Pain/discomfort. ● Stiffness. ● Numbness/tingling. ● Swelling. ● Weakness. ● Paralysis.

Have patients mark the diagram in the appropriate area to show the location of each symptom. The area of pain typically diminishes in size as it heals, so is a useful way to show rehabilitative progress. Once the size and affected area of symptoms are identifi ed, have the patient describe the degree and duration of pain using a scale similar to the one provided as an example on the progress report. At minimum, you should record the period of time the pain lasts, its frequency, and when or in what situations it occurs or recurs.

Assessing painTake a careful pain history as part of a pain assessment. Include the following:

● What makes the pain better? What do you do to get relief? What helps you?

● What makes the pain worse? What brings it on? What aggravates it?

● Quality of pain: What does the pain feel like? What words would you use to describe it?

● Radiation: Where is the pain? Does the pain go anywhere else? Does it spread? Can you put one fi nger in the center of the pain?

● Severity: How bad is the pain? At its worst? At its best? ● Temporal course: When did the pain start? How often does it

hurt? Has it gotten better? Worse? Is it worse at certain times of the day?

● Treatment: What have you tried to relieve the pain? How effective was it? Why did you stop it?

In the description of pain, use of a rating scale can be very helpful. There are many different rating schemes. Many use a scale of 0 to 5 or 0 to 10. Pain-free is rated at 0, with each higher number associated with a specifi c amount of pain. Other rating scales use words, like “light,” “moderate” or severe.

The following method is probably the most familiar, “On a scale of zero to 10, where zero means no pain and 10 equals the worst possible pain, what is your current pain level?”

Numerical scales:

Common mistakes include the interviewer saying or writing, “On a scale from ONE to 10” or “and 10 equals the worst pain THAT YOU EVER HAD.” In the fi rst example, the error is stating that one is the low end of the scale. As the second example shows, it is important not to put the highest end of the scale in terms of past experience.

The numeric rating scale may be categorized into no pain (0), mild pain (1-3), moderate pain (4-6), and severe pain, (7-10).

The purpose of the scale is twofold: (1) to understand the patient’s perspective, and (2) even more important, to reassess the effects of treatment. By using the same rating system over time, you will be able to chart the effectiveness of treatment.

Remember to take a careful history that includes prior and present medications and note the onset of peak analgesic effects, duration of action, level of pain relief (0 to 10 scale) and side effects. It is VERY important to include the amounts and time-frame of any medications to get a full picture of the patient’s progress. In describing the duration and frequency of pain, record the period of time the symptom lasts, using seconds, minutes, hours, etc; and how often the symptom occur. Terms like “rarely” or “occasionally,” are much less useful than specifi c descriptions such as “every hour,” or “four times a day.”

It is also important to describe the onset of pain, which may include the setting of the injury and contributing factors. Because a clear description of the biological basis or mechanisms of injury and compensating symptoms are important to justifying or substantiating specifi c treatment options, you will want to include this information on SOAP charts. In the case of an accident, the date and cause of injury should be included. In many cases, this date is used to identify the claim.

Intake forms should have detailed information regarding the mechanics of injury and onset of symptoms. In the case of an automobile accident, for example, the physical biomechanics and all conditions of the accident should be documented. In case of an accident, the discussion of the injury should include body positions, any twisting of the body, any weight involved and levels (moved 50-pound box to shelf fi ve feet off the ground). In cases of falls, note the body part or parts that hit a surface or surfaces, and describe the type of surface and progression of impact(s), which will be useful to develop a treatment plan.

If symptoms of a condition or illness predating the accident were aggravated by an accident, the description should include this information and an explanation that the symptoms concerned are the most recent onset or fl are-up. Chart the onset of all symptoms, both those that relate to the accident and those that were pre-existing but may have been exacerbated by the injury. While it is diffi cult to determine an exact date of onset for repetitive motion injuries, try to pin it down to a particular year or season (Winter ’98) if not the month (November ’98) that it began to hurt. Repetitive motion injuries should also relate daily activities that aggravate the injury.

Describe activities that are limited, explaining how, where and when function is limited or pain is better. Note how the patient functions in daily activities, and if these activities are associated with specifi c symptoms. Describe the pre-incident level of function and the current level, including the symptoms associated with doing the action. If it is a limitation, describe how the debility affects normal functions at home and work. Explain how each of these functions are linked with the specifi c activities the patient must do daily: sitting, standing, lifting, sleeping, etc… Discuss its relevance in the patient’s life.

Consider the activities the patient is no longer able to do. Describe the activity and note the amount of time or duration of a specifi c activity accomplished before you see signs of fatigue,

INFORMED Page 37

stress or pain. For workers’ compensation benefi ts, it is especially important to include work-related activities. In all cases, however, use actions that act as representative samples of leisure as well as work activities, but also include a balanced representation of the patient’s usual activities.

Document exactly how long the patient can endure the activity before symptoms become pronounced; you will be able to compare previous sessions to this session to assess improvement in the patient’s functioning and ability to get things done, related to both work and leisure activities. As a patient’s activity level improves without painful symptoms, some patients may be tempted to do more than they should. Caution patients not to set themselves back by taking on too much as they are still healing.

Note actions that ameliorate or facilitate relief, such as sitting or standing with a different posture, changing positions frequently, stretches, manual therapies and hydrotherapy – anything that may relieve symptoms. Help patients learn how to ease their own symptoms. Remind them to take breaks, as needed. Reviewing and confi rming what aggravates or relieves the injury allows the patient to facilitate his/her healing and control pain, to some extent, or at least avoid exacerbating the injury or symptoms. Note the patient’s progress as he/she achieves a fuller range of motion, reduced pain, etc.

In short, the subjective section includes: ● Patient’s complaints. ● Date of onset of symptoms. ● Cause of symptoms. ● Duration of symptoms. ● What aggravates symptoms. ● What relieves symptoms. ● Patient’s consideration of treatment.

Objec veThe next part of the format is the objective observation. These objective observations include symptoms that health care providers can actually see, hear, touch, feel or smell. Included in objective observations are measurements such as temperature, pulse, respiration, skin color, swelling and the results of tests. In short, objective fi ndings include data from:

● Visual examination (patient’s functional status, i.e., gait, transfers, bed mobility, stairs, etc.).

● Interventions (including communication, discussion or coordination of care with other individuals involved with the patient).

● Procedural interventions (including physical agents, modality, therapeutic exercise or activity, equipment used, repetitions, duration, frequency, target tissues/area, position, dosage and/or time).

● Patient-related instruction (training or education provided to the patient and or family).

● Measurable data from relevant tests and measures, e.g. range of movement (ROM) strength, balance, sensation, etc.

Work within your scope of practice. Do not run diagnostic tests if you do not have a diagnostic license. Assessment testing varies enormously among different branches of manual therapy. Most manual therapists use a visual exam, while others include motion testing and palpatory fi ndings in their work. The testing process should be consistent, measured both before and after treatment and listing all fi ndings. Do not use diagnostic terminology unless the referring health care provider indicated a diagnosis.

Perform assessments consistently across sessions so you are comparing exactly the same thing each visit. Make sure the patient is in the same exact position; sitting, for example, each time, as you check range of motion. Take measurements carefully, and use the appropriate terminology. Note a variety of fi ndings, including any infl ammation, spasms, trigger points or joint dysfunction. For all information, compare bilaterally, (initially, with a vision test), and address the patient’s deviation from normal function or use. Ask the patient to compare him/herself to the period before incident or injury.

In a visual examination, for example, note the patients’ ease of motion, posture, appearance, any signs of trauma, swelling, cuts and scrapes, or any other visual data. Document the position of the patient during the assessment (seated, standing, etc.); the angle of observation, the action or activity, and any radiating or referred pain that results. Note restricted or abnormal movement or gait, diffi culty breathing or shortness of breath in any situation. Measure deviation from normal posture, any irregularities in the spine or rotations. Describe the quality of movement, the ease or diffi culty, the duration of the movement, at what point the patient feels fatigue, symptoms or sensations associated with the movement, and degree of expression.

In a palpatory examination, note any abnormalities in muscle tone, pain, scar tissue or infl ammation. Examine the patient for adhesions, hypertonicity, muscle spasms and trigger points. Rate the intensity of the fi nding and emphasize the size and shape of the area affected as closely as possible. Many practitioners use human fi gure drawings, marking or drawing in areas of concern. First mark the diagrams to indicate symptoms or conditions, describe them briefl y on the picture, then write in more detail in the narrative entry under “O” for Objective. Identify the location, the type of trigger and referred or radiating pain, if any.

In range of motion (ROM) testing, you also may be marking a diagram of a human body, showing greater range of movement and decreased pain as the individual improves. ROM is used to assess infl ammation and degree of severity in joint trauma, strains and sprains. ROM test results are used to describe a particular level of dysfunction and assess progress as well as identify a specifi c condition or weakness. In conducting ROM testing, identify the position of the patient (standing, seated, prone, etc.); the type of test (active, active-assisted, passive, etc.); the joint involved; and the action (fl exion, extension, etc.). Identify and quantify any deviation from normal (using the appropriate term) and the cause of the limitation; and identify and characterize the quality of movement (smooth, segmented, spastic) and accompanying amount of pain or discomfort.

It is common in physical therapy to assess patient improvement based on increases in range of joint motion and muscle strength. Limitations of joint motion must be noted so that the patient or examiner does not try to move the joint past the limitation. Both motions are compared to the accepted ROM for that joint, and any limitation in range is noted.

Other types of tes ngMany useful pain and disability questionnaires provide highly accurate and detailed charting of pain. The following table includes some of the most common pain and disability questionnaires currently in use:

Page 38 INFORMED

Types of Pain and Disability QuestionnairesTable adapted from http://www.clincalinfometrics.nothwester.edu/archive/Tab percent208 percent20Pain percent20Measures.pdf

Measurement Type of pain Scale # of items Administered by Time

Visual Analogue Pain Rating Scale (Various authors, 1974) General pain Ratio 1 Self 30 sec

McGill Pain Questionnarie Melzack, 1975) General pain Ordinal,

interval 20 Self 15-20 min

Medical Outcomes Study Pain Measures (Sherbourne, 1992) General pain Ordinal 12 Self Varies

Oswestry Low Back Pain Disability (Fairbank, 1980) Back pain Ordinal 60 Self 5 min

Back Pain Classifi cation Scale (Leavitt, 1978) Back pain Interval 13 Self 5-10 min

Pain and Distress Scale (Zung, 1983) Mood/behavior changes due to pain Ordinal 20 Self Varies

Pain Perception Profi le (Tursky, 1976) General pain Ratio 37 Practitioner VariesWest Haven-YaleMulti-dimensional Pain Inventory (Kerns et. al 1985)

Chronic pain Ordinal 52 Self 5 min

Pain Disability Index (Tait et. al 1986) Chronic pain/disability Ordinal 7 Self Varies

Dartmouth Pain Questionnaire (Corson & Schneider, 1984) General pain Ordinal,

interval 5 Self 5-20 min

One of the most common tools in the fi eld of massage therapy is the revised Vernon-Mior questionnaire, which can be viewed in full at: http://www.chiro.org/LINKS/outcome.shtml#NDI. Also called the Neck Disability Index (NDI), this questionnaire was developed in 1989 by Howard Vernon. The Index was developed as a modifi cation of the Oswestry Low Back Pain Disability Index with the permission of the original author (J. Fairbank, 1980). Since 1991, a number of studies have confi rmed a high level of reliability and validity to the test, with the NDI becoming a standard instrument for measuring self-rated disability due to neck pain that is used by clinicians and researchers alike.

In this assessment, which is scored in the same manner as many other disability rating scales, each of the 10 items is scored from 0 – 5. The maximum score is 50, and the obtained score can be multiplied by 2 to produce a percentage score. Occasionally, a respondent will not complete one question or another. The average of all other items is then added to the completed items.

The original report provided scoring intervals for interpretation, as follows:

0 – 4 = no disability.5 – 14 = mild.15 – 24 = moderate.25 – 34 = severe.Above 34 = complete.

This means 15-24 out of 50 (the RAW SCORE) is equated with moderate disability.

According to the authors, “the NDI [can] be used at baseline and for every 2 weeks thereafter within the treatment program to measure progress. As noted above, at least a 5-point change is required to be clinically meaningful. Patients often do not score the items as zero, once they are in treatment. In other words, it is

common to fi nd that patients will continue to score between 5-15 despite having made excellent recovery (i.e., they may be back to work). The practitioner should avoid the trap of ‘treating till zero,’ as this is not supportable based on current evidence.”

The objective section also documents the length of session, duration of each modality used, and where and how on the body treatments were applied. In most cases, you will use CPT codes for the modalities and list the length of the session using units. Be certain that before you use any CPT codes on your SOAP charts, you know, specifi cally, which CPT codes (1) fall within your scope of practice, and (2) are reimbursable though the specifi c insurance plan.

Finally, the “O”( objective) section also documents the patient’s response to specifi c treatment. Remember to include both positive and negative responses to treatments, note any changes in pre- to post-treatment fi ndings, and also note what did not change. Note specifi c techniques and fi ndings and write the most signifi cant points. You will establish priorities for the next session or sessions based on these fi ndings.

Both subjective and objective fi ndings on the SOAP chart should be newly assessed each session.

AssessmentAssessment follows the objective observations, and is usually the diagnosis of the patient’s condition. In some cases the diagnosis may be clear; in other cases, assessment may be ambiguous and include several diagnosis possibilities. Assessment may also include:

● Overall response to treatment. ● Changes in the patient’s status. ● Progress toward goals. ● Justifi cation of need for skilled services. ● Explanation of how the treatment is medically necessary.

INFORMED Page 39

● Summary of impairments, in terms of functional limitations and disabilities.

● Effect of intervention on impairments, functional limitations and disabilities.

Note the symptoms that the doctor wants addressed through treatment and the functional outcome desired. Practitioners should assess functional ability and limitations in this section, comparing and contrasting previous and current ability, and progress toward accomplishing functional goals. In doing so:

● Prioritize fi ndings from most to least signifi cant. ● Describe current functional limitations. ● Describe patient’s previous ability to perform actions. ● Explain the part these actions play in the patient’s life, work,

and leisure. ● Establish and demonstrate long- and short-term goals.

PlanThe last part of the SOAP note is the plan. The plan may include laboratory and/or radiological tests ordered for the patient, medications ordered, treatments performed (e.g., minor surgery procedure), patient referrals (sending patient to a specialist), patient disposition (e.g., home care, bed rest, short-term or long-term disability, days excused from work, admission to hospital), patient directions and follow-up directions for the patient.

The plan should establish the timeline, frequency, duration, and at what points the patient should be re-evaluated. It should document referral and recommendation for needed testing or services. It should also include self-care exercises or activities that relieve pain, for example, the use of ice packs or hydrotherapy – and “homework” to strengthen the patient on his/her own.

Describe the homework assignment in such a way that the patient will understand or remember how to do the activity when he/she is at home; it can be anything that will increase the patient’s ability to perform an activity, decrease symptoms and help attain functional goals. Avoid any activities that cause pain or symptoms to recur, and note activities that make it worse. The patient should note what exercises or activities were successfully or unsuccessfully performed at home, and if they brought relief or no relief. In this way, you can continue the productive homework and discontinue any unhelpful activities.

In summary, the plan should: ● Plan for the next treatment session. ● Plan for patient/family education or training. ● Discuss new therapies or exercises. ● Discuss frequency of treatment. ● Plan for consultation with another discipline. ● Plan for reevaluation or discharge. ● Plan regarding exercise progression or changes in the plan of

care.

Pulling it all togetherHere is an example of a SOAP note with a medical diagnosis in the “Pr” section:

Date: 3/3/04 Pr: 27 y.o. s/p (L) wrist and ankle fx; Begin gentle wrist and ankle AROM & PROMS: Pt. RTC reporting no adverse effects from tx last visit or from HEP. He stated that his wrist & ankle are moving a little better and the edema in the hand has improved. He reports

that he is able to shower (I) using a plastic chair in the tub and feels like he has improved his ability to dress himself. O: AROM (L) wrist: fl exion 30°, extension 30°, UD 15°, RD 20°, supination 45°, pronation 60°; (L) knee: 0-135°; (L) ankle DF-PF 5-45°. Girth: (L) wrist fi gure 8: 35.5 cm and (L) ankle fi gure 8: 43 cm. Tx: gentle AROM and PROM for 30’ to the (L) wrist & forearm for fl exion, extension, supination, & pronation. Pt. also performed hand AROM. A: The pt. has made improvements in AROM and has edema. Improvements have allowed pt. to improve ability to ambulate (I) and perform self-care.P: Will continue to have the pt. perform his HEP and RTC on 3/5/04.

Here is an example of the same SOAP note with functional outcomes reporting (SOAP and FOR combined). Remember that functional outcomes reporting is patient defi ned; that is, the functional outcome is related to the patient’s daily activities and limitations. Additions are presented in italics:

Date: 3/3/04S: Pt. RTC reporting no adverse effects from tx last visit or from HEP. He stated that his wrist & ankle are moving a little better and the edema in the hand has improved. He reports that he is able to shower (I) using a plastic chair in the tub and feels like he has improved his ability to dress himself. O: AROM (L) wrist: fl exion 30°, extension 30°, UD 15°, RD 20°, supination 45°, pronation 60°; (L) knee: 0-135°; (L) ankle DF-PF 5-45°. Girth: (L) wrist fi gure 8: 35.5 cm and (L) ankle fi gure 8: 43 cm. Functional Status: Gait: Ambulates household distances with (B) axillary cx c (L) UE platform, PWB 50 percent (L), (I). Transfers: (I) all transfers self-care: (I) showering and dressing. IADLs: Unable to work; Unable to assist wife with child care duties. Tx: gentle AROM and PROM for 30’ to the (L) wrist & forearm for fl exion, extension, supination, & pronation. Pt. also performed hand AROM.

A: The pt. has made improvements in AROM and has edema, although both remain to be impairments. Decreased edema and exercise have improved AROM allowing improved use of wrist & hand during self-care and use of ankle for normal gait pattern. Continues to require use of cx 2° to PWB status – this is limiting his ability to ambulate.P: Will continue to have the pt. perform his HEP and RTC on 3/5/04.

Another suggestion for improving the SOAP format, in worker’s compensation and personal injury cases, where there is a special need for work status information, is to add “ER” to the “SOAP” format. “E” is associated with “employment issues:” Include a record of the patient’s physical and medical ability to work, and information regarding any rehabilitation that the worker may need to undergo. “R” is associated with “restrictions to recovery;” any temporary or permanent physical limitations, and any unrelated condition(s) that may impede recovery.

SOAP notesYou will usually be responsible for one of four types of soap notes:

● Initial evaluation and report. ● Progress report. ● Interim report. ● Discharge report.

Page 40 INFORMED

Remember that a fi nished report is not just SOAP notes. It must be written up formally, with a key for any symbols used that are not commonly understood.

Ini al evalua on and reportThis is the fi rst report of the patient on their fi rst visit. It includes what you have learned from the referring health care provider and the patient regarding the injury and its symptoms. It is the base against which you will note progress. The initial evaluation and report includes a description of the fi rst treatment and your fi ndings. Initial notes should evaluate the whole body, addressing its status in full, including compensational posture and the impact of the injury on quality of life.

The initial evaluation and report establishes a plan for the fi rst series of treatments. List modalities that will be used and their general application, including location and duration. Note frequency of future sessions and the date the patient should be re-evaluated. The period noted should be long enough to carry out long-term treatment goals. Update this plan as needed if it becomes inappropriate or is no longer useful. Make any modifi cations with consideration of the patient’s response to the treatment plan.

Example: Ini al evalua on and reportSThe patient complains of [condition] with [frequency, degree and duration of discomfort or pain] in [body location] with referred or radiating pain to the [body location]. Symptoms are related to a [motor vehicle accident, on-the-job injury, etc.] that occurred on [month day and year]. The patient has had these symptoms for a period of [days, months, years, etc.] Symptoms are aggravated by [describe activity, posture, etc.]. Patient’s symptoms are relieved by [activity, posture, therapy, etc.].

OVisual observation showed [describe abnormal gate or dysfunction, restricted movement, swelling, etc. of the (body location)].

Testing:ROM: Limited/restricted [rotation, hyperextension, etc] of the [body region or joint]

Palpatory testing showed [hypertonicity/adhesions/trigger points/spasms] in these muscles: [List].

APhysician diagnosis is carpal tunnel syndrome 354.0.

Functional outcome:After the last treatment, improvement was noted/not noted.

Patient’s level of pain increased/decreased/was unchanged in the [time period]: patient shows increased ease in breathing and reduced infl ammation since last treatment session.

The patient is showing more freedom of movement; patient’s condition is exacerbated by [List].

PTreatment plan for the patient, as directed by the primary health care provider/referring physician is [massage therapy, myofascial release, hot or cold packs, infrared heat, etc.]. The health care goal is to [reduce infl ammation and muscle spasms] which should [reduce discomfort and pain] in the affected areas. The patient

will be seen for [number of treatments] and be re-evaluated in [number of weeks/months].

Progress reportA progress note sums up the progress that has been made in the patient’s care since the last note. It may also be referred to as continuing care. This is the style of report that is used most often, as it is required for each treatment after the initial report (which is completed once) and the interim report (which may happen rarely, if at all). This SOAP note and its report should focus on the immediate treatment session, and daily goals that are specifi c to that time period.

Example: Progress reportSThe patient’s condition is [……. ] as previously reported. In addition, the patient complains of [symptoms, duration and degree of pain or discomfort] in the [location] with referred pain or radiating pain to the [location].

Patient felt [improvement/no improvement/worse] after the last treatment, which lasted a period of [x minutes, hours, days, etc.].

OAt this visit, the patient’s condition is [the same, improved, worse]. There was [no improvement/ improvement] in [ …….].

Visual observation showed [ ---------].

ROM showed [improvement, no improvement] in [condition] of the [location].

Palpatory test showed [condition] in the [location]; [condition] was improved in the [location] and [condition ] was not improved in [location].

AReferring hcp/physician diagnosis of the condition of the patient is [wrist sprain/strain 842.0].

Functional outcome:After the last treatment [improvement/no improvement] was apparent in the [-----------].

The patient’s level of pain has [increased/decreased, no change].

Opinion:

PToday, treatment was [treatment plan].

*Note: in cases, where this session is the last unit and the patient will return to the physician, write: “The patient has been referred back to his/her physician.”

Interim and discharge reportsInterim reports are rare, as they are required for the fi rst treatment under a renewed prescription. The interim report is really the same content as the initial report, except that functional outcome listed under “assessment” should be comprehensive, covering the cumulative effects of all treatments under the previous prescription. The interim report includes a re-evaluation that is as thorough as an initial visit. The patient and practitioner assess progress and develop a new treatment plan, documenting the patient’s status accordingly.

INFORMED Page 41

Discharge notes, which are required by some institutions, are a fi nal summary of the patient’s health and recuperation, including subsequent recommendations or referrals related to a treatment plan. Discharge notes include a summary of treatment with accompanying dates, the patient’s current status and reasons for stopping treatment or care. Write the reasons for discharge in the “plan” section. Also document further steps that should be taken by the patient, ongoing care that is recommended or required, self-care steps, and any referrals.

Progress reportPatient Name:__________________________

Date of Injury: _________________________

Insurance ID No.:_______________________

Use the fi gures to show the location of today’s symptoms. Circle the appropriate area and label with one of the following letters, using the key below:

P = painS = stiffnessN = numbness/tinglingW = weaknessSW = Swelling

Pain scale:

Mark the following scale to show the amount of pain you are feeling today:No pain ______________________________

Unbearable pain________________________

Ac vity scale:Mark the following scale to show the degree to which you are limited in your daily activities:Able to do everything ___________________

Unable to do anything____________________

Detailed notes:_________________________________________

_____________________________________________________

_____________________________________________________

SOAP chartPatient Name:_________________________________________

Date of Injury: ________________________________________

Insurance ID#:________________________________________

S (Subjective) O (Objective)A (Assessment) P (Plan)

ENDNOTES1. For further pros and cons regarding insurance reimbursement, see www.amtamassage.

org/journal/pros1.html and www. amtamassage.or/journal/cons.html, also read about Julia Onofrio’s personal experiences at www.thebodyworker.com.

2. Defi nition from AMMA at http://okcmassage.biz/3. Adapted from http://www.rand.org/pubs/monograph_reports/MR 1384/MR1384.ch2.pdf4. Diana L. Thompson, Hands Heal, Communication, Documentation, and Insurance Billing

for Manual Therapists, Lippincott, Williams & Wilkins, Second Edition, 2002.5. David Luther and Margie Callahan, Insurance Billing Manual, 4th edition6. For more tips, see www.sohnen-moe.com/insurance.php7. Documentation Basics: A Guide for the Physical Therapist Assistant; Mia Erickson

EdD, MS, PT, ATC; Becky McKnight MS, PT; http://www.slackbooks.com/excerpts/46739/46739.asp

8. http://www.slackbooks.com/excerpts/46739/46739.asp9. Thompson, Diana L., “Hands Heal; Communication, Documentation and Insurance

Billing for Manual Therapists, Second Edition, 2001.10. Documentation Basics: A Guide for the Physical Therapist Assistant Mia Erickson

EdD, MS, PT, ATC; Becky McKnight MS, PT http://www.slackbooks.com/excerpts/46739/46739.asp *http://www.clinicalinfometrics.northwestern.edu/archive/Tab percent208 percent20Pain percent20Measures.pdf

Page 42 INFORMED

MASSAGE THERAPY ISSUES IN INSURANCE REIMBURSEMENT

Self-assessmentSelect the best answer for each question and record your answers

on the Self-Assessment Answer Sheet located on page 69 or complete your test online at www.momt.cme.edu.

1. According to the chapter, all the following statements about medical massage are true, except:a. It is a system of manually applied techniques designed

to reduce pain, establish normal tissue tension, create a positive tissue environment and to normalize the movement of the musculoskeletal system.

b. It is a scientifi cally based method of manual therapy that seeks a clear understanding of the scientifi c principles of physiology that affect connective and soft tissue healing and treatment.

c. It distinguishes between therapeutic massage as a preventive therapy and medical massage, a treatment specifi cally directed to resolve conditions diagnosed by a physician.

d. It does not utilize physical therapy codes.

2. Which of the following is not true about major medical and indemnity insurance policies?a. They are the more traditional health care policies that

existed before managed-care options were available.b. They typically refer to a health insurance plan with a high

maximum benefi t and with comprehensive rather than scheduled benefi ts.

c. They do not allow the insured individual to use any provider he/she chooses, with specifi c restrictions regarding physicians and hospitals.

d. In most states, they have pre-established limits for medical services to specifi c providers.

3. Which of the following is not true about managed care organizations?a. They are also called “fee-for-service.”b. They come in a variety of types, including HMO, PPO,

EPO and POS, among others.c. They typically require a referring HCP (health care

provider) to administer and coordinate care with other health care providers.

d. The majority of people belong to them.

4. Which of the following statements about HMOs is not true?a. They are health delivery systems that offer comprehensive

health coverage for hospital and physician services for a prepaid, fi xed fee.

b. They may contract with or directly employ participating health care providers, including hospitals, physicians and other health professionals.

c. This plan typically requires that the insured select a primary care physician (PCP) from within the provider network.

d. They usually have very high deductibles.

5. Which of the following statements about PPO’s is not true?a. They are also known as “open-ended HMOs.”b. They are a group of providers who have joined together,

negotiating their rates for treatment with various health plans.c. They are similar to the traditional fee-for-service

programs, except that they primarily contract with independent providers.

d. This plan encourages the insured to choose doctors, hospitals and other providers that participate in the plan by increasing the portion of the bill they pay if the insured stays “in network.”

6. Under this plan, some of a doctor’s income may depend on the plan’s success or effi ciency, and participating doctors often share in any losses the plan sustains or in any profi ts the plan makes.a. EPO.b. POS.c. FMC.d. IPA.

7. Which of the following is a physician organization established by county or state medical societies?a. EPO.b. POS.c. FMC. d. IPA.

8. Federal health insurance resources include this organization, which is part of the U.S. Department of Health and Human Services.a. HCFA.b. MedPay.c. PIP.d. Medicare.

9. Which of the following is not a type of auto insurance coverage?a. MVA.b. MedPay.c. BI.d. UM/UIM.

10. Which of the following is not true about motor vehicle accidents?a. Millions of people are injured by them each year.b. Most are decided according to the law of negligence.c. If it occurred while the injured was working, his/her on-

the-job injury insurance may be liable for paying medical expenses.

d. There are three main categories of insurance: fi rst party, second party, and third-party coverage.

INFORMED Page 43

11. Which of the following statements is not true about no-fault insurance?a. It requires medical health care benefi ts be included in auto

insurance policies to cover medical expenses incurred both by individuals driving, riding as passengers, in the policy-holder’s car, regardless of fault.

b. When you have an accident, your auto insurance provider automatically pays for your damages, regardless of fault, up to a specifi c limit.

c. It is a civil wrong that is not a crime.d. In its strict form, it applies only to states where insurance

companies pay “fi rst party” benefi ts and where there are restrictions on the right to sue.

12. The medical benefi ts portion of the auto insurance plan in no-fault states is known as which of the following?a. PIP or MedPay. b. Torte liability threshold.c. MMI.d. BI.

13. Which of the following statements is not true about PIP?a. In some states, like Washington and Florida, it is required.b. Only one level of PIP coverage is available for purchase.c. In some recent cases, some insurance companies have

redefi ned it as limited to the policyholder’s family only.d. They usually have a time limit for which services can be

billed that varies in each state.

14. All states have had some form of workers’ compensation in effect since _______________. a. 1929.b. 1948.c. 1972.d. 1986.

15. Which of the following are the two states that widely accept massage therapists as contracted providers in the health care system?a. California and Washington.b. Washington and Florida.c. Florida and Ohio.d. Ohio and California.

16. Which of the following is not reviewed in the preferred provider assessment or credentialing process?a. A passport.b. A completed application.c. Proof of licensure.d. Inspection of work site.

17. Which of the following defi ne a “reasonable” fee?a. The fee that an individual provider most frequently

charges for a specifi c procedure.b. The fee level determined by the administrator of a benefi t

plan from actual fees submitted for a specifi c procedure. c. The fee charged by a provider for specifi c services or

treatment that has been modifi ed by complications or unusual circumstances.

d. The fee that was charged in the previous year for the service.

18. The concept of using “usual, customary, and reasonable fees,” (UCR) to determine how much to reimburse patients covered by insurance for specifi c treatment was introduced by the insurance industry in the early ______________________.a. 1930s.b. 1960s.c. 1980s.d. 1990s.

19. Which of the following statements about UCR fees or rates is not true?a. UCR fees are applied consistently throughout the

insurance system.b. UCR rates may be outdated and may not cover all costs.c. UCR fees are infl uenced by the fees providers charge in

various geographic areas and by the population size.d. UCR fees widely vary among carriers, and no two carriers

use the same UCR defi nition.

20. The process of preverifi cation includes fi nding out all the following, except:a. What services or treatments are covered by the individual’s

policy.b. The actual dollar amount of available benefi ts.c. Whether you, as a massage therapist, qualify for payment.d. Fee levels set by the Health Insurance Association of

American (HIAA).

Page 44 INFORMED

Chapter 2

Medical Errors(2 CE Hours)

PART 1: WHAT EXACTLY IS PATIENT SAFETY?Linda Emanuel, MD, PhD; Don Berwick, MD, MPP; James Conway, MS; John Combes, MD; Martin Hatlie, JD; Lucian Leape, MD; James Reason, PhD; Paul

Schyve, MD; Charles Vincent, MPhil, PhD; Merrilyn Walton, PhD

AbstractWe articulate an intellectual history and a defi nition, description, and model of patient safety. We defi ne patient safety as a discipline in the health care professions that applies safety science methods toward the goal of achieving a trustworthy system of health care delivery. We also defi ne patient safety as an attribute of health care systems that minimizes the incidence and impact of adverse events and maximizes recovery from such events. Our description includes: why the fi eld of patient safety exists (the high prevalence of avoidable adverse events); its nature; its essential focus of action (the microsystem); how patient safety works (e.g., high-reliability design, use of safety sciences, methods for causing change, including cultural change); and who its practitioners are (i.e., all health care workers, patients, and advocates). Our simple and overarching model identifi es four domains of patient safety (recipients of care, providers, therapeutics, and methods) and the elements that fall within the domains. Eleven of these elements are described in this paper.

Introduc onA defi ning realization of the 1990s was that, despite all the known power of modern medicine to cure and ameliorate illness, hospitals were not safe places for healing. Instead, they were places fraught with risk of patient harm. One important response to this realization has been the growth of interest in patient safety. It is increasingly clear that patient safety has become a discipline, complete with an integrated body of knowledge and expertise, and that it has the potential to revolutionize health care, perhaps as radically as molecular biology once dramatically increased the therapeutic power in medicine.

Patient safety is now recognized in many countries, with global awareness fostered by the World Health Organization’s World Alliance for Patient Safety. And yet there continue to be signifi cant challenges to implementing patient safety policies and practices. One fundamental requirement for adopting any new approach is a clear articulation of its premises and manifestations. Components of patient safety have been expressed by thought leaders, and models have been presented. However, a single rendition that can help a thorough adoption of patient safety throughout health care has not been available. This paper aims to offer that. After introducing salient points in the intellectual history of patient safety, we offer a defi nition, a description, and fi nally, a model of patient safety. We call on organizations to adopt a defi nition and model for patient safety.

Intellectual History of Pa ent SafetyCritical assumptions in health care were rewritten by patient safety thinking. How to understand why people make errors that lead to adverse events shifted from a single cause, legalistic framework to a systems engineering design framework, and in so doing, it changed forever the way people think about health care delivery.

Limi ng BlameThe fi rst quantum leap defi ned patient safety’s entry into health care thought. The realization that adverse events often occur because of system breakdowns, not simply because of individual ineptitude prompted the change. The traditional approach assumed that well-trained, conscientious practitioners do not make errors. Traditional thinking equated error with incompetence and regarded punishment as both appropriate and effective in motivating individuals to be more careful.

The use of this kind of blame had a toxic effect. Practitioners rarely revealed mistakes, and patients and supervisors were frequently kept in the dark. Low reporting made learning from errors nearly impossible, and legal counsel often supported and encouraged this approach in order to minimize the risk of malpractice litigation.1 This mind-set lent a wary, antagonistic backdrop to the therapeutic interaction.2 It also created a locked-in paralysis for all concerned when failure did occur.

Thinking began to change in the 1990s in response to several kinds of new information. First, medical injury was acknowledged as occurring far more often than heretofore realized, with most of these injuries deemed preventable. Second was the idea that “active” errors at the “sharp end” —where practitioners interact with patients or equipment—result from “latent” errors, as demonstrated by James Reason.3 Latent errors are upstream defects in the design of systems, organizations, management, training, and equipment (“blunt end”) that lead individuals at the sharp end to make mistakes. To punish individuals for such mistakes seemed to make little sense, since errors are bound to continue until underlying causes are remedied.

Systems ThinkingThought leaders in health care offered persuasive arguments that errors could be reduced by redesigning systems and processes using human factors principles. These could reduce mistakes through design features, including standardization, simplifi cation, and the use of constraints. One such constraint is a “forcing function,” which is a design characteristic that makes error impossible (e.g., incompatible connectors that prevent connecting an anesthetic gas to the oxygen port of an anesthesia machine).

Another corollary quantum leap to view health care as a system took place as people applied engineering design concepts to health care. Some of these systems changes were related to tools and technology, such as using better intravenous pumps or computerizing physician medication prescribing. Others were related to organizations and people, such as training doctors and nurses to work better in teams or including a pharmacist in the team during rounds. Some were more successful than others, but the important change was that people were thinking of health care delivery in terms of systems.

Interestingly, in earlier phases of medical history, different forms of systems thinking were dominant. However, these forms focused on the biologic systems within the individual patient, rather than on care and interactions between individuals in the environment of care. The notion of humors and the understanding of the circulatory system are two examples from the period prior

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to the modern scientifi c era. As the scientifi c era dawned and the fi eld of medicine began applying the scientifi c method with success, systems thinking within physiology continued. Perhaps this was helpful, as clinicians took on a systems understanding of the delivery of health care as well.

Initially, perhaps, blunt-end factors were typically thought of as organizational policies and processes that shaped the behavior of individuals at the sharp end-point of service. However, an awareness also emerged of extra-organizational blunt-end factors, including regulators, payers, insurance administrators, economic policymakers, and technology suppliers. These parties often infl uence and shape incentives and demands within the health care organization. Thus, health care had to be seen as an open, not closed, system, and policy too began to be thought of as a feature of the system.

Transparency and LearningThe idea that adverse events could yield information was not new, but as it was newly applied in health care, it acquired a new potency. The notion that sharing information about medical errors was essential for effective patient safety outcomes became urgent. Commentators asserted that the more error-related information was shared, the better lessons could be implemented industry-wide.4 The possibility that knowledge of systems might require an understanding of how things go wrong was demanding attention.

Culture and ProfessionalismClinicians, governing boards, executive leaders, and middle managers of health care delivery organizations were being increasingly encouraged to think in terms of building high-reliability organizations. This required a culture change to one that refrained from assigning “sharp-end” blame for mistakes; that incentivized learning by fully disclosing information about mistakes, failure, and near misses; that trained and provided support to clinicians involved in inherently risky work; and that disclosed all relevant facts to injured parties.5, 6

These transformations in thinking resulted in approaches that were remarkably well-rooted in the essential ethical underpinnings of the profession. The call for safety went directly to the central medical professional imperative to “above all, do no harm.” The value at issue was nonmalfeasance. As a matter of justice, human rights, or the fi duciary obligations intrinsic to the unequal power structure of the provider/patient relationship, the call for system-wide transparency coexisted with fundamental professional standards requiring honesty and disclosure of material facts to the patient.7, 8, 9

Accountability for Delivering Eff ec ve, Safe CareEarly Western medical traditions were organized through guilds that kept the special knowledge and skills involved in medical practices a secret.10 At a time when many medical methods were of dubious foundation, rarely benefi cial, and frequently harmful, the challenge of securing the trust of society was signifi cant.11 The primary method was to root out the charlatans. As modern concepts of negligence developed, emphasizing litigation to deter substandard behavior and individual accountability for procedures and actions causally linked to adverse outcomes became embedded in both medicine and law.

In an important parallel development, as treatments became increasingly effective, the medical fi eld began to establish methods for accountability, and the profession’s credibility in society rose. The scientifi c method was essential in that development, and with

good reason, medicine has adhered to it. The three-phase approach to establishing the effi cacy and safety of new medical therapies—Phase 1, clinical trials to assess safety; Phase 2, clinical trials to ascertain effi cacy; and Phase 3, trials to compare it with another standard intervention—was essential, too. The dependence on the randomized clinical trial as the touchstone of the scientifi c method was critical to that process. The goal was to be sure that medicine was, and was seen as, a clinical research-driven, reliable practice. The effort was successful; society recognized that medicine merited its standing as a profession with specialized expertise to use powerful methods applied appropriately. Consequently, these scientifi c and clinical research methods and their associated ways of thinking became well entrenched.

The growth of medical sciences also changed standards in medical education, licensure, and peer review. The early apprenticeship model was supplemented by requirements for a phase in which didactically acquired knowledge was transmitted prior to the apprenticeship. As specialties developed, these sought to codify and legitimize their expertise through testing and certifi cation. With the development of safer and more effective surgery, medical care delivery systems began focusing on hospitals; standards for these delivery systems were understood to be necessary. Certifi cation of hospitals and other health care delivery systems followed, often with professional groups, such as the Accreditation Council for Graduate Medical Education (ACGME) and the Joint Commission, serving quasi-government oversight and public protection roles.

The nascent realization that health care, including the clinician and other components, also needed to be accountable for learning from error was harder to grapple with. Faltering moves were made toward tort reform and institutional accountability for safety practices. A model for accountability of clinicians that included accountability for continuous learning set the stage for, but stopped short of, a full rendition of what accountability for understanding and optimally designing safe health care systems required.

Health Care as an IndustryBeginning in the fi rst half of the 20th century, the industrial era phased into the service industry era. Systems thinking was an established part of industrial engineering and applied in production lines and service industries. Yet medicine maintained a separation from these changes. This may have been possible mainly due to medicine’s standing as a revered profession with a privileged relationship to society, but in part, it also may have occurred because both providers and patients protected the one-to-one model of the doctor-patient relationship. Thus, the health care paradigm remained focused on the patient-physician relationship and on a therapy’s point of application, rather than on the systems of application. The practitioner was trained and certifi ed to apply therapy at the point of the illness-causing disorder. Even in the more expansive bio-psychosocial model, safety-oriented systems thinking was missing, even though the roles of the patient’s immediate relationship circle and of the community and society were acknowledged.

Rising and apparently uncontrollable health care costs, coupled with increasing evidence of poor quality, ushered in the managed care era, along with demands from the public for accountability. Additionally, increased media exposure of preventable medical errors raised troubling questions that propelled a search for new solutions. Leape’s earlier publication of the theoretical possibility of applying industrial human-factors engineering concepts to health care,12 and the subsequent demonstration with Bates and

Page 46 INFORMED

colleagues6 of the utility of systems analysis in understanding medication error later that year, provided that new type of thinking. The fi rst conference on patient safety and systems error at the Annenberg Center for Health Sciences in 1996 was a natural next step toward a new type of thinking.

Rethinking RiskThought leaders from medicine and policymakers began to carve a new way of understanding risk, new ways to reaffi rm relationships with patients, and a new way of addressing the shocking realities that epidemiologic studies, such as Leape’s 1994 landmark study, Error in Medicine, had presented.12 A decade earlier, anesthesiology had made substantial improvements by applying systems thinking translated from methods used in aviation and mechanical engineering, but the rest of medicine had failed to generalize it. Quality improvement and risk management had both developed as disciplines within health care, with an emphasis on health services delivery research and measurement. These and other developments produced a readiness for looking at what might be learned and adapted from other high-risk industries and complex organizations.

Emphasizing Teamwork as Well as Dyadic Rela onshipsEarly attempts at systems change revealed one Achilles heel of implementation: dysfunctional relationships between clinicians and other workers. Mirroring some of the developments in aviation—in which a focus on teamwork complemented attention to refi nement of mechanical systems—health care began to recognize the importance of team functioning, particularly for communicating across authority gradients. Training in teamwork became a foundational building block for the new fi eld of patient safety.

The discipline of patient safety rejected the concept of health care delivery as an exclusive dominion of the medical profession over the patient-physician relationship. The vision was more inclusive and demanding. It included patient-centered care and the biomedical model, and it focused on interdisciplinary teams and families. It also included the technical and administrative aspects of health care delivery in a complex system.

Defi ning Pa ent SafetyAs the intellectual history of patient safety developed, it became increasingly important to defi ne patient safety. Thought leaders began to examine their different assumptions. Is patient safety a way of doing things—i.e., a philosophy (with its own explanatory framework, ethical principles, and methods) and a discipline (with a body of expertise)? Or is it an attribute—i.e., a goal and a condition (being safe), a property that emerges from the system? Existing defi nitions seemed to vary on the question.

Although the Institute of Medicine (IOM) defi ned safety as “freedom from accidental injury,” patient safety as a discipline or fi eld of inquiry and action has not been fully defi ned to date in the major consensus statements of the organizations that have propelled its existence. Part of the challenge lies in distinguishing safety from quality, a line that remains important to some, while being dismissed by others as an exercise in semantics. In 1998, the IOM convened the National Roundtable on Health Care Quality, which adopted the following defi nition of quality that was widely accepted: “Quality of care is the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.”13

Health care quality problems were classifi ed into three categories: underuse, overuse, and misuse, all of which the evidence shows are common. Misuse was further defi ned as the preventable complications of treatment. Although the IOM Roundtable was careful to distinguish misuse from error (the latter may or may not cause complications), the misuse category became a common reference point for conceptualizing patient safety as a component of quality.

In 2006, Leape and Berwick observed that, as attention to patient safety has deepened, the lines between the overuse, underuse, and misuse categories have blurred. “It seems logical,” they wrote, “that patients who fail to receive needed treatments, or who are subjected to the risks of unneeded care, are also placed at risk for injury every bit as objectionable as direct harm from a surgical mishap.”14

The National Patient Safety Foundation identifi ed the key property of safety as emerging from the proper interaction of components of the health care system, thereby leading the way to a defi ned focus for patient safety, namely systems.15 Its goal has been defi ned as: “[t]he avoidance, prevention, and amelioration of adverse outcomes or injuries stemming from the process of care.”16

Our Defi ni on of Pa ent SafetyWe use the following defi nition of patient safety:

Patient safety is a discipline in the health care sector that applies safety science methods toward the goal of achieving a trustworthy system of health care delivery. Patient safety is also an attribute of health care systems; it minimizes the incidence and impact of, and maximizes recovery from, adverse events.

This defi nition acknowledges that patient safety is both a way of doing things and an emergent discipline. It seeks to identify essential features of patient safety.

THE WHY, WHAT, WHERE, HOW, AND WHO OF PATIENT SAFETY

Going farther with the defi nition, each of its components is expanded here to offer a deeper description of patient safety:

Why does the fi eld of pa ent safety exist?

Patient safety as a discipline began in response to evidence that adverse medical events are widespread and preventable, and as noted above, that there is “too much harm.” The goal of the fi eld of patient safety is to minimize adverse events and eliminate preventable harm in health care. Depending on one’s use of the term “harm,” it is possible to aspire to eliminate all harm in health care.

What is the nature of pa ent safety?

Patient safety is a relatively new discipline within the health care professions. Graduate degree programs are currently being introduced in recognition of patient safety as a discipline. It is a subject within heath care quality. However, its methods come largely

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from disciplines outside medicine, particularly from cognitive psychology, human factors engineering, and organizational management science. That, however, is also true of the biomedical sciences that propelled medicine forward to its current extraordinary capacity to cure illnesses. Their methods came from biology, chemistry, physics, and mathematics, among others. Applying safety sciences to health care requires inclusion of experts with new source disciplines, such as engineering, but without any divergence from the goals or inherent nature of the medical profession.

Pa ent safety is a property that emerges from systems design.Patient safety must be an attribute of the health care system. Patient safety seeks high reliability under conditions of risk. Illness presents the fi rst condition of risk in health care. Patient safety applies to the second condition: the therapeutic intervention. Sometimes the therapeutic risk is audacious, such as when a patient’s heart is lifted, chilled, cut, and sewn during cardiac transplantation surgery. Risk and safety are fl ip sides of the therapeutic coin.

Patient safety demands design of systems to make risky interventions reliable. Two tenets of complexity theory apply: First, the greater the complexity of the system, the greater is the propensity for chaos. Second, in open, interacting systems, unpredictable events will happen. The better the therapeutic design, the more resilient it is in the face of both predictable and unpredictable possible or impending failures, so they can be prevented or rescue can be achieved.17 Safety systems include design of materials, procedures, environment, training, and the nature of the culture among people operating in the system.

Berwick and others have collaborated with Amalberti to apply Shewhart’s notion of statistical quality or error levels to health care.18 Systems are categorized by their level of adverse events. Barriers to progression from one level to another are identifi ed. Interestingly, leaders of high-reliability organizations in other industries view the level of adverse events in medicine as so high that many of them would consider the health industry as existing in a state of chaos. The patient safety discipline seeks systems that can move health care to higher and higher levels of safe care.

Pa ent safety is a property that is designed for the nature of illness.High-reliability design is a concept that was not originally developed for health care. However, health care has some essential features in common with how high-reliability design has evolved. While often complex and unpredictable, it can have the ultimate high-stakes outcome: preservation of life.

A unique feature of patient care is its highly personal nature. Provision of care almost always requires health care workers to cross signifi cant personal boundaries, both psychological and physical. To protect patient integrity, the health professions have developed codes of professional ethics that guide how best to provide health care without doing dishonor to the ill person. Patient safety designs must allow for these important restrictions, which include confi dentiality, physical privacy, and others. At times, these needs confl ict directly with the transparency and vigilance needed for optimal patient care, including safety.

Another unique feature is the natural progression of illness. By defi nition, when illness care begins, something has already gone wrong. Thus, in many medical situations, failure to provide the

correct intervention causes harm to the patient. A missed diagnosis of meningococcal meningitis, for example, usually results in patient death. The patient safety discipline acknowledges the need to include harm due to omission of action, as well as the obvious harm due to actions taken.

The vast diversity of possible etiologies and manifestations of illness makes systems design in health care a unique challenge. Nonetheless, the reality is that most conditions are common and of common etiology, which allows for optimal design, if not infallible outcomes. If most patients with a condition such as breast cancer are best treated according to protocol but some require off-protocol, tailored treatment, systems can be designed to meet that need for the majority of protocols with tailoring options.

Pa ent safety is a property dependent on open learning.Patient safety has another inherent feature that derives directly from its dependence on errors and adverse events as a main source of understanding. It depends on a culture of openness to all relevant perspectives in which those involved in adverse events are treated as partners in learning. In this sense, patient safety espouses continuous cycles of learning, reporting of adverse events or near misses, dissemination of lessons learned, and the establishment of cultures that are trusted to not cast unfair blame. The patient safety fi eld marries principles of adult education and effective behavioral learning with the traditional approaches of the medical profession. Known from its early days as the fi eld that seeks to move “beyond blame” to a culture trusted by all to be just patient safety, patient safety pioneers have pushed for a much deeper understanding of the mechanisms of errors that often lie beyond the actions or control of the individual.

Patient safety advocates turn away from the traditions of the guild in which social standing and privileged knowledge shielded practitioners from accountability. They also reject the defensive posture of old risk management approaches in which physicians and leaders of health care organizations were advised to admit no responsibility and to defend all malpractice claims, whether or not they were justifi ed. Patient safety embraces organizational and personal accountability, but it also recognizes the importance of moving beyond blame in both its organizational and its personal dimensions, while maintaining accountability and integrity in interactions with patients and families who have suffered avoidable adverse events.

Trustworthiness is essen al to the concept of pa ent safety.The health care system designed for patient safety is trustworthy. This is not because errors will not be made and adverse events will never happen, but because the health care system holds itself accountable to applying safety sciences optimally. Patient safety (as an attribute) prevents avoidable adverse events by paying attention (as a discipline) to systems and interactions, including human interactions, and allowing learning by all parties from near misses and actual adverse events. Through a concerted, conscientious effort, all those involved act to minimize the extent and impact of unavoidable adverse events by creating well-designed systems and well-motivated, informed, conscientious, and vigilant personnel, and by seeking to repair damage honestly and respectfully when it occurs.

Page 48 INFORMED

Where does pa ent safety happen?

The ultimate locus of patient safety is the microsystem. That is, the immediate environment in which care occurs—the operating room, the emergency department, and so on. It is in the microsystem where the “sharp end” resides, where patient-caregiver interactions occur, where failures of safety emerge, and where patients are harmed. Breaches in safety may have occurred in many blunt-end components, and as described above, events constitute properties of interacting components of the overall system. Therefore, patient safety is irreducibly a matter of systems. Nonetheless, as the setting where the patient receives health care, the microsystem is the locus where the successes or failures of all systems to ensure safety converge.

At the same time, patient safety must be concerned with the entire system. Importantly, patient safety recognizes that the microsystem is inherently unpredictable. Although it takes a mechanistic view of causation, patient safety acknowledges that each microsystem is open in that it can be infl uenced by another microsystem. This may result in something unpredictable. Thus, for instance, the microsystem of concern in surgical safety might be the operating suite, but if a local emergency demands that two members of the surgical team leave the operating room, the microsystem has been unpredictably affected.

How is pa ent safety achieved?

A number of mechanisms are involved in achieving patient safety, including:High-reliability design.The fundamental mechanism by which patient safety can be achieved is high-reliability design, which includes many components. Thus, the irreducible unit of patient safety delivery is multifaceted; all components of health care delivery must be integrated into a system that is as reliable as possible under complex conditions.

A unique feature of high-reliability design comes from complexity theory, which notes that open, interacting systems will produce some level of chaos or inherently unpredictable events. High-reliability designs are resilient even when unpredictable events occur.

Additional design features that guide health systems engineers include “lean process” and a notion of breaking through reliability boundaries in leaps from one safety level to another. These levels of reliability are often known as sigma levels—through the use of simplifi ed and better processes.

The concept of a multilayered system, in which the failures within each of the layers must be aligned for an error to occur, is known as the “Swiss cheese” model of accident causation.19 The components that make up the system include the institution and its organization, the professional team and the individuals it includes, and the technology in use.

Error traps (i.e., unpredictable situations in which error is highly likely) are another vivid concept on which safety sciences focus. The notion is that health care delivery is not only complex; it is also an open interacting system, in which illness is also a given, so the opportunities for making errors are many and endemic. Health care workers and health systems designers must therefore take this into account.

Safety systems design in health care is early in its development. Practical approaches to design for safety have been pioneered by the Institute for Healthcare Improvement (IHI), the Agency for Healthcare Research and Quality (AHRQ), and the World Health Organization’s (WHO) World Alliance for Patient Safety (see also “Applying the Patient Safety Model,” below), among others. For instance, patient safety designs can be thought of as falling into two types: those that are for types of routine care that vary little and can best be managed with protocols allowing for little deviation, and those that are for unique situations where on-the-spot innovation and signifi cant deviation from protocol are required.

Safety sciences.The term “safety science” refers to the methods by which knowledge of safety is acquired and applied to create high-reliability designs. The objective is to design systems that approach “fail-safe” conditions—i.e., those that ensure proper execution. The ideal design is one in which the operator cannot perform the function improperly. Short of that ideal, much of the effort in the past has been directed toward developing defenses, which are barriers that prevent an unsafe act from resulting in harm. Over the years, health care has developed many of these barriers, and usually several must be breached for patient harm to occur.

Acquisition of objective knowledge is a matter of science. Patient safety uses methods that are appropriate to the purpose, and these can be drawn from a range of disciplines. Some, such as understanding human error, come from human physiology and psychology. Some, such as systems analysis and quality improvement, come from engineering and management. Others, such as organizational behavior, come from the social sciences. Still other methods come from health services research. The disciplines that contribute to safety use the methods that are appropriate to each fi eld. These include controlled experiments, repeat tests, and other traditional scientifi c methods. Human factors engineering is built on, as appropriate, randomized controlled trials of human performance, anthropometry, anatomy, physiology, physics, and mathematics.

A strong claim can be made that although safety sciences are scientifi cally grounded, the fundamental drive toward and the cutting edge of inquiry in patient safety uses the narrative; i.e., the stories of adverse events yield insights and drive adjustments. Stories provide pattern recognition for patient safety practitioners. Stories of patient safety, like other stories, are specifi c and yet have insights that can be applied to other settings. This feature is well suited to the need for dealing with events that might be either familiar or entirely unpredictable.20

Importantly, however, one of the founding contributors to the safety sciences had a critical reason and unique standing to claim the term “science” for the safety sciences. Philosopher Karl Popper—famous for his work in defi ning the scientifi c method—working with MacIntyre, identifi ed error (and by extension, one can include systems failures more generally) as analogous to data that refute a hypothesis in the scientifi c method.21 Sciences, such as chemistry or biology, use as their core method a cycle that comprises observation, hypothesis generation, testing, and hypothesis verifi cation or alteration, depending on the results of testing. Deviation from this method causes the knowledge to be unreliable and the deviant methods to be discarded as unsound.

The patient safety discipline uses an analogous cycle—observation, design, testing, then use—as its method, and system adjustment is based on analyzing how adverse events came about. This, in turn, is

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based on Deming’s assertion that making a change is a key source of knowledge for systems.22 The rather close analogue of method warrants the use of the term “science” in the safety sciences.

To understand how human performance slips up, psychology, physiology, or social science must be used. To understand how a machine fails, engineering methods must be used. Each method must be used with its full insistence on rigor so that the new knowledge is as reliable and objective as possible. However, in contrast to the application of the scientifi c method in the physical sciences, for ethical and practical reasons, in patient care there rarely can be a control or a repeat of the same event to check for reproducibility, except in a simulated environment. Nonetheless, when the analytic method has yielded to the best of its capacity a new insight, then this—like the new data in the process of science—generates a new cycle of adjusted design, testing, and use. In short, the analytic method must be unique to the adverse event, but then the safety sciences use the insight generated to create a new cycle of improved understanding and system design.

In short, patient safety applies many methods and techniques. However, two analytic methods have become widely associated with the fi eld. One is retrospective. The analysis of what went wrong when an adverse event has occurred is known as “root cause analysis” (RCA). Perhaps the close identifi cation (probably excessively so) of patient safety with RCA is a result of heightened attention that occurs after a bad event. RCA is an approach to fi nding out what underlying features of a situation contributed to an adverse event. Adopting the idea that the immediate cause of an event is almost always the end result of multiple systems failures, RCA seeks, by review of data and interviews, to identify and understand all contributing causes in order to redesign the systems to make them safer in the future.

The other characteristic method of patient safety is prospective. Attempting to anticipate and prevent adverse events through safety design is known as “failure modes and effects analysis” (FMEA). FMEA is an engineering approach, usually taken early in the development of a product, that seeks to imaginatively identify potential failures and their effects. Knowledge from past failures might contribute to a designer’s ability to foresee potential failures in their design.

Designs are then adjusted to make failure less likely. FMEA is used in analyzing every aspect of a system’s design, including the system’s global functioning, its components and their interactions, the functioning of equipment, the programming of equipment, and the procedures for activities.

Nevertheless, no one method is enough to produce the range of knowledge and types of understanding required for patient safety. In contrast to the clinical sciences in which the randomized controlled trial is the research method of choice, patient safety eschews the notion that the fi eld can have confi dence in a single “gold standard.” In patient safety, contributions are sought from engineering, social sciences, psychology, psychometrics, health services research, epidemiology, statistics, philosophy (theories of justice, accountability), ethics, education, computer sciences, and more. Each discipline uses its own particular methods; patient safety takes each on its own merits and selects the method most suited to the topic or question at hand.

Measurement remains an important area for development in patient safety. Many needed measures have not yet been developed. The IHI talks of three types of measurement: process, outcome,

and balance.23 Process measures may need to be developed and validated for a complete bundle of carefully selected procedures for a given clinical setting. Outcome measures might need to be developed for the particular outcome in question, but they might also need to be used in a fashion that has been developed to allow for balance—i.e., to look at the impact of intervention in one place in the system on other places in the system.

Methods for causing change.With its emphasis on making changes in health care workers’ actions, patient safety seeks to engage methods to bring about improvements that go beyond transmission of knowledge and acquisition of skills to the effective implementation of appropriate skills. In this regard, patient safety builds on the insights and techniques of quality improvement. By its nature, separation between acquisition of new knowledge and service delivery is minimal.

Rapid cycles of feedback and response methods for institutional improvement were pioneered in health care by Berwick and others.24 These processes are derived from continuous quality improvement methods originally designed by Deming22 and others. The methods focus on the systems of health care delivery more than on the medical issues and the knowledge that the rapid cycles produced are of the specifi c local system. The methods are designed to improve services in areas where a gap between acknowledged standards and actual practices exists. Usually, a guideline or protocol that has already been endorsed by an expert medical body or bundle of established practices is to be applied. The rapid cycles tend to keep the guideline or protocol or bundle the same, altering its application only to optimize its full use in the local system. Once the implementation is done, quality indicators are monitored to maintain the new standards.

Patient and family voice is important throughout. Adverse events are subjected to analysis, which feeds into redesign or adjusted design of the systems of care. More traditional health services research and other methods of acquiring understanding are also fed into the recomposition of the systems.

Dissemination of change is not a characteristic of the approach that uses rapid cycles or of quality improvement more generally. This is in great part because the methods are designed to be tailored to the local system; therefore, they do not readily generalize, and measures of success might vary for the same reason. However, approaches that standardize measures and quality improvement methods are being used, which will allow for better dissemination.25 Alternatively, more traditional campaigns to get individual health care sites to each do their own improvement work can be used, as has been done by the IHI.

Who is a pa ent safety prac oner?

Most health-related disciplines are characterized by specialists who devote themselves to the full-time practice of the discipline. Similarly, patient safety is emerging as a specialty in which education at the masters’ level is offered and to which patient safety offi ces and patient safety offi cers devote their full-time effort.

However, patient safety requires that all members of the health care service delivery team be “patient-safety minded.” It also depends on both hands-on patient safety practices and leadership within every discipline in health care. As a quintessentially collaborative activity, patient safety needs leaders in each area of

Page 50 INFORMED

clinical administration and in each clinical discipline—including doctors, nurses, pharmacists, and others—in addition to information management, equipment and plant management, and other areas. Patient safety practitioners truly include everyone in health care.

For those who have an advanced degree in patient safety or a role determined by patient safety, it could be a primary professional identity. For most, it will be a personal and professional commitment—a part of their identity, but not their primary identity, which will remain cardiology or plant management, etc. Nonetheless, since all in health care should acquire the characteristics needed for practicing safety, it is important to know what characteristics a patient safety practitioner (whether by primary or secondary identity) should have.

What skills or unique characteristics should a patient safety practitioner possess? A professional who provides direct care needs to have a kind of wariness or patient safety vigilance. This quality is most often informed by a rich knowledge about adverse events and how to help avert them or minimize their damage. This kind of practical wisdom or “safety savvy” grows continuously from experience and an ability to recognize when something is not right. Often an adverse event that is about to unfold can be averted or its impact minimized if it is caught in action.

Patient safety practitioners are well storied. The role of narrative in patient safety has been emphasized, both as a vehicle for acquiring safety-relevant knowledge and as a vehicle for becoming, what Weick has called, mindful or safety wary.26 They understand that health care systems are full of “error traps,” and they are vigilant in foreseeing and preempting, mitigating, and rescuing patients from them. Reason envisions a future for patient safety in which its practitioners share many true stories of adverse events in their training and educational venues.20 He sees this as the normative method for making members of the health care community “safety wise.” For example, studies of pediatric cardiac surgeons found that those surgeons—who were inclined to detect their errors and fi x them, even at the price of having a longer and less elegant operation—had the best outcomes and reputations.

Patient safety practitioners must also become excellent team members, whether they are natural leaders or better in other roles. They must be able to substitute for one another and appreciate the other’s perspective. Importantly, since vigilance is essential for patient safety and is also tiring, working in teams during shift work is essential.27

A PATIENT SAFETY MODEL OF HEALTH CAREWith the above aspects of patient safety lined up, it is possible to see a simple model of patient safety. While good models of patient safety have been constructed, we seek an overarching model that is simple, fully authentic to the subject matter, and compatible with the good existing models. At the same time, it should be simple enough that it can be seen in a readily sketched diagram and stated in a simple, short sentence that can be easily recalled. Only such a simple model can ubiquitously permeate the interstices of daily thought among all the necessary people throughout health care.

We offer the following simple model with which to view patient safety. It divides health care systems into four main domains:

● Those who work in health care. ● Those who receive health care or have a stake in its availability. ● The infrastructure of systems for therapeutic interventions

(health care delivery processes). ● The methods for feedback and continuous improvement.

These four domains are represented graphically in Figure 1. Each domain interacts with the other domains and with the environment, as depicted by the semipermeable divisions (dotted lines) between them and at their outer edges. The result is a core, overarching model for patient safety.

Figure 1. A patient safety model of health care.

The model is consistent with the descriptors of patient safety stated above: What…? and Where…? correspond to the third domain, i.e., “Systems for therapeutic action.” How…? corresponds to the fourth, “the Methods”; Who…? corresponds to the fi rst and second, i.e., “people who work in health care” and “people who receive it or have a stake in its availability.”

The model is also consistent with existing frameworks of thinking that underpin patient safety. Each framework defi nes categories or elements that fall coherently within one or more of the four domains, as displayed in Table 1.

Deming’s22 notion of “deep knowledge” of quality design required an understanding of (1) the system; (2) variation in its performance; (3) how to use change as a source of knowledge; and (4) the psychology of people in the organization. All of these elements drive quality improvement, and they belong within the domain of “methods.”

Donabedian divided health care into structure, process, and outcomes for the purpose of measurement.28 It is also a helpful way of categorizing the health system for the purposes of understanding how elements of the system interact. For this reason, the categories can be thought of as cutting across all four domains in the patient safety model.

Vincent16 identifi ed seven elements that infl uence safety:1. Organization and management factors.2. Work environment factors.3. Team factors.4. Task factors.5. Individual factors.6. Patient characteristics.7. External environment factors.

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These factors distribute among the three domains: systems for therapeutic action, the people who work in health care, and the people who receive it or have a stake in its availability.

Carayon and colleagues proposed a Systems Engineering Initiative for Patient Safety (SEIPS) model for design in health care.29 In the SEIPS model, elements are helpfully depicted with intersecting arrows that illustrate how the elements can interact with one another, so indicating the notion of emergent properties.

The above 11 elements do not represent an exhaustive list. In addition, elements can be subdivided into their content areas, which is not attempted here. For instance, external environment has been divided into physical, social, and biologic areas.30 The elements can also be categorized in different ways. For example, team factors could be included within work environment. The purpose of this simple, broad model of domains is to capture the largest category of essential components in patient safety and their interaction with one another.

The fashion in which this or any patient safety model applies must vary by setting as dramatically as the settings vary. The nature of the illnesses and social setting, the nature of the therapies, the nature of the human resources, and the nature of the physical infrastructure all will contribute to defi ning the very different systems. These systems must be analyzed and options identifi ed for improvement. However, the fundamental concepts in any good patient safety model are applicable to most settings.

What is the utility of this model and of the other models with which ours is built to be compatible? Our model and other models provide a way of seeing the component elements involved in patient safety and how they interact. So, when designing a system, improving a system, analyzing an adverse event, researching an issue, or measuring a new intervention, such models provide a ready map of matters that should be considered. Given the human tendency to limit the scope of focus, models provide a countervailing stimulus to include the whole universe of domains and their elements that could be involved in the patient safety issue at hand.

ConclusionThe fi eld of patient safety has emerged in response to a high prevalence of avoidable adverse events. However, many do not use a clear defi nition or have a clear model of understanding of the fi eld. We call on organizations to adopt a defi nition and model for patient safety. To assist the process, we provide a defi nition and describe the nature of the fi eld by going through each component in the defi nition. We identify its primary focus of action as the microsystem and its essential mechanisms as high-reliability design and the use of safety sciences and other methods for causing improvement, including cultural change. We describe key attributes of those who practice safety, and we identify its practitioners as all involved in health care. To provide an easy-to-recall, overarching model of patient safety, we offer one that identifi es four main domains of patient safety (1) people who receive health care, (2) people who provide it, (3) systems of therapeutic action, and (4) methods and elements within each domain. We hope that this description, defi nition, and model will assist the integration of patient safety practices throughout health care.

AcknowledgmentsWe appreciate the helpful comments of Ben-Tzion Karsh and the invaluable assistance of Maia Feigon, Andrew Harris, and Jonathan Masia-Peters.

Author Affi liationsInstitute for Healthcare Improvement, Cambridge, MA (Dr. Berwick, Mr. Conway); Center for Healthcare Governance, Chicago, IL (Dr. Combes); Buehler Center on Aging, Health & Society, Northwestern University, Feinberg School of Medicine, Chicago, IL (Dr. Emanuel); Partnership for Patient Safety, Chicago, IL (Mr. Hatlie); Harvard School of Public Health, Boston, MA (Dr. Leape); University of Manchester, Manchester, UK (Dr. Reason); Joint Commission on Accreditation of Healthcare Organizations, Oakbrook Terrace, IL (Dr. Schyve); Imperial College London, London, UK (Dr. Vincent); Faculty of Medicine, University of Sydney, Sydney, AU (Dr. Walton).

Address correspondence to: Linda L. Emanuel, MD, PhD, 750 N. Lake Shore Drive, Suite 601, Chicago, Il 60611; e-mail: l-emanuel@northwestern.edu.

Table 1. How domains and elements relate in the patient safety model

Domain Systems for therapeu c ac on

People who work in the health care system

People who receive health care or have a stake in its

availabilityMethods

Content areas

● Structure ● Process ● Outcome

● Organiza on & management

● Work environment ● Task factors ● External environment

● Team factors ● Individual factors ● Pa ent characteris cs

● System knowledge ● Understanding of

varia on ● Understanding of

how change yields knowledge

● Psychology

Page 52 INFORMED

PART 2: ROOT CAUSE ANALYSISBackground Root cause analysis (RCA) is a structured method used to analyze serious adverse events. Initially developed to analyze industrial accidents, RCA is now widely deployed as an error analysis tool in health care. A central tenet of RCA is to identify underlying problems that increase the likelihood of errors while avoiding the trap of focusing on mistakes by individuals. The goal of RCA is thus to identify both active errors (errors occurring at the point of interface between humans and a complex system) and latent errors (the hidden problems within health care systems that contribute to adverse events).

RCAs should generally follow a prespecifi ed protocol that begins with data collection and reconstruction of the event in question through record review and participant interviews. A multidisciplinary team should then analyze the sequence of events leading to the error, with the goals of identifying how the event occurred (through identifi cation of active errors) and why the event occurred (through systematic identifi cation and analysis of latent errors) (Table 1 below). The ultimate goal of RCA, of course, is to prevent future harm by eliminating the latent errors that so often underlie adverse events.

As an example, a classic paper (The wrong patient. Chassin MR, Becher EC. Ann Intern Med. 2002;136:826-833.) described a patient who underwent a cardiac procedure intended for another, similarly named patient. A traditional analysis might have focused on assigning individual blame, perhaps to the nurse who sent the patient for the procedure despite the lack of a consent form. However, the subsequent RCA revealed 17 distinct errors ranging from organizational factors (the cardiology department used a homegrown, error-prone scheduling system that identifi ed patients by name rather than by medical record number) to work environment factors (a neurosurgery resident who suspected the mistake did not challenge the cardiologists because the procedure was at a technically delicate juncture). This led the hospital to implement a series of systematic changes to reduce the likelihood of a similar error in the future.

RCA is a widely used term, but many fi nd it misleading. As illustrated by the Swiss cheese model (see below) multiple errors and system fl aws often must intersect for a critical incident to reach the patient. Labeling one or even several of these factors as “causes” may place undue emphasis on specifi c “holes in the cheese” and obscure the overall relationships between different layers and other aspects of system design. Accordingly, some have suggested replacing the term “root cause analysis” with “systems analysis.”

The Swiss Cheese ModelReason developed the “Swiss cheese model” to illustrate how analyses of major accidents and catastrophic systems failures tend to reveal multiple, smaller failures leading up to the actual hazard.

In the model, each slice of cheese represents a safety barrier or precaution relevant to a particular hazard. For example, if the hazard were wrong-site surgery, slices of the cheese might include conventions for identifying sidedness on radiology tests, a protocol for signing the correct site when the surgeon and patient fi rst meet, and a second protocol for reviewing the medical record and checking the previously marked site in the operating room. Many more layers exist. The point is that no single barrier is foolproof. They each have “holes”; hence, the Swiss cheese. For some serious events (e.g., operating on the wrong site or wrong person), even though the holes will align infrequently, even rare cases of harm (errors making it “through the cheese”) will be unacceptable.

While the model may convey the impression that the slices of cheese and the location of their respective holes are independent,

Table 1. Factors That May Lead to Latent Errors

Type of Factor ExampleInstitutional/regulatory A patient on anticoagulants received an intramuscular pneumococcal vaccination, resulting in a

hematoma and prolonged hospitalization. The hospital was under regulatory pressure to improve its pneumococcal vaccination rates.

Organizational/management A nurse detected a medication error, but the physician discouraged her from reporting it.Work environment Lacking the appropriate equipment to perform hysteroscopy, operating room staff improvised using

equipment from other sets. During the procedure, the patient suffered an air embolism.Team environment A surgeon completed an operation despite being informed by a nurse and the anesthesiologist that

the suction catheter tip was missing. The tip was subsequently found inside the patient, requiring reoperation.

Staffi ng An overworked nurse mistakenly administered insulin instead of an antinausea medication, resulting in hypoglycemic coma.

Task-related An intern incorrectly calculated the equivalent dose of long-acting MS Contin for a patient who had been receiving Vicodin. The patient experienced an opiate overdose and aspiration pneumonia, resulting in a prolonged ICU course.

Patient characteristics The parents of a young boy misread the instructions on a bottle of acetaminophen, causing their child to experience liver damage.

INFORMED Page 53

this may not be the case. For instance, in an emergency situation, all three of the surgical identifi cation safety checks mentioned above may fail or be bypassed. The surgeon may meet the

patient for the fi rst time in the operating room. A hurried x-ray technologist might mislabel a fi lm (or simply hang it backwards and a hurried surgeon not notice), “signing the site” may not take place at all (e.g., if the patient is unconscious) or, if it takes place, be rushed and offer no real protection. In the technical parlance of accident analysis, the different barriers may have a common failure mode, in which several protections are lost at once (i.e., several layers of the cheese line up).

In health care, such failure modes, in which slices of the cheese line up more often than one would expect if the location of their holes were independent of each other (and certainly more often than wings fl y off airplanes) occur distressingly commonly. In fact, many of the systems problems discussed by Reason and others—poorly designed work schedules, lack of teamwork, variations in the design of important equipment between and even within institutions—are suffi ciently common that many of the slices of cheese already have their holes aligned. In such cases, one slice of cheese may be all that is left between the patient and signifi cant hazard.

Eff ec veness of Root Cause Analysis RCA is one of the most widely used approaches to improving patient safety, but perhaps surprisingly, few data exist to support its effectiveness. As noted in a recent commentary (Effectiveness and effi ciency of root cause analysis in medicine. Wu AW, Lipshutz AKM, Pronovost PJ. JAMA. 2008;299:685-687.), much of the problem lies in how RCAs are interpreted rather than in how they are performed, since there is no consensus on how hospitals should follow up or analyze RCA data. This limits the utility of RCA as a quality improvement tool. Another issue is that few formal mechanisms exist for analysis of multiple RCAs across institutions. As an individual RCA is essentially a case study of a specifi c error, analysis of multiple RCAs performed at different institutions may help identify patterns of error and point the way toward solutions. Some states mandate performance of an RCA for certain types of errors (including never events) and report the fi ndings of these RCAs in aggregate.

NEVER EVENTSBackground The term “Never Event” was fi rst introduced in 2001 by Ken Kizer, MD, former CEO of the National Quality Forum (NQF), in reference to particularly shocking medical errors (such as wrong-site surgery) that should never occur. Over time, the list has been expanded to signify adverse events that are unambiguous (clearly identifi able and measurable), serious (resulting in death or signifi cant disability), and usually preventable. The NQF initially defi ned 27 such events in 2002 and revised and expanded the list in 2006. The list is grouped into six categorical events: surgical, product or device, patient protection, care management, environmental, and criminal.

Surgical events include: ● Surgery performed on the wrong body part, surgery performed

on the wrong patient. ● Wrong surgical procedure on a patient. ● Unintended retention of a foreign object in a patient after

surgery or other procedure.

● Intraoperative or immediately postoperative death in an American Society of Anesthesiologists Class I patient.

● Artifi cial insemination with the wrong sperm or donor egg.

Product or device events include: ● Patient death or serious disability associated with the use of

contaminated drugs, devices, or biologics provided by the health care facility.

● Patient death or serious disability associated with the use or function of a device in patient care, in which the device is used for functions other than as intended.

● Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a health care facility.

Patient protection events include: ● Infant discharged to the wrong person. ● Patient death or serious disability associated with patient

elopement (disappearance). ● Patient suicide, or attempted suicide resulting in serious

disability, while being cared for in a health care facility.

Care management events include: ● Patient death or serious disability associated with a medication

error (e.g, errors involving the wrong drug, wrong dose, wrong patient, wrong time, wrong rate, wrong preparation, or wrong route of administration).

● Patient death or serious disability associated with a hemolytic reaction due to the administration of ABO/HLA-incompatible blood or blood products.

● Maternal death or serious disability associated with labor or delivery in a low-risk pregnancy while being cared for in a health care facility.

● Patient death or serious disability associated with hypoglycemia, the onset of which occurs while the patient is being cared for in a health care facility.

● Death or serious disability (kernicterus) associated with failure to identify and treat hyperbilirubinemia in neonates.

● Stage 3 or 4 pressure ulcers acquired after admission to a health care facility.

● Patient death or serious disability due to spinal manipulative therapy.

Environmental events include: ● Patient death or serious disability associated with an electric

shock or electrical cardioversion while being cared for in a health care facility.

● Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by toxic substances.

● Patient death or serious disability associated with a burn incurred from any source while being cared for in a health care facility.

● Patient death or serious disability associated with a fall while being cared for in a health care facility.

● Patient death or serious disability associated with the use of restraints or bedrails while being cared for in a health care facility.

Criminal events: ● Any instance of care ordered by or provided by someone

impersonating a physician, nurse, pharmacist, or other licensed health care provider.

● Abduction of a patient of any age.

Page 54 INFORMED

● Sexual assault on a patient within or on the grounds of the health care facility.

● Death or signifi cant injury of a patient or staff member resulting from a physical assault (ie, battery) that occurs within or on the grounds of the health care facility.

Most Never Events are very rare. For example, a 2006 study estimated that a typical hospital might experience a case of wrong-site surgery once every 5 to 10 years. However, when Never Events occur, they are devastating to patients - 71 percent of events reported to the Joint Commission over the past 12 years were fatal and may indicate a fundamental safety problem within an organization.

The Joint Commission has required that hospitals report “sentinel events” since 1995. Sentinel events are defi ned as “an unexpected occurrence involving death or serious physiological or psychological injury, or the risk thereof.” The Never Events are also considered sentinel events by the Joint Commission. The Joint Commission mandates performance of a root cause analysis after a sentinel event.

Current Context Because Never Events are devastating and preventable, health care organizations are under increasing pressure to eliminate them completely. The Centers for Medicare and Medicaid Services (CMS) announced in August 2007 that Medicare would no longer pay for additional costs associated with many preventable errors, including those considered Never Events. Since then, many states and private insurers have adopted similar policies. Since February 2009, CMS has not paid for any costs associated with wrong-site surgeries.

Never Events are also being publicly reported, with the goal of increasing accountability and improving the quality of care. Since the NQF disseminated its original Never Events list in 2002, several states have mandated reporting of these incidents whenever they occur, and other states mandate reporting of serious adverse events (including many of the NQF Never Events). Health care facilities are accountable for correcting systematic problems that contributed to the event, with some states mandating performance of a root cause analysis and reporting its results.

The National Quality Forum is currently revising the 2006 list of Never Events, with plans to publish an updated list in 2011.

References1. Ferlie EB, Shortell SM. Improving the quality of health care in the United

Kingdom and the United States: A framework for change. Milbank Q 2001; 79: 281-313.

2. Schoenbaum SC, Bovbjerg RR. Malpractice reform must include steps to prevent medical injury. Ann Intern Med 2004; 140: 51-53.

3. Reason J. Human error. Boston: Cambridge University Press; 1990. 4. Sexton JB, Thomas EJ, Helmreich RL. Error, stress, and teamwork in

medicine and aviation: Cross- sectional surveys. Br Med J 2000; 320: 754-759.

5. McElhinney J, Heffernan O. Using clinical risk management as a means of enhancing patient safety: The Irish experience. Int J Health Care Qual Assur Inc Leadersh Health Serv 2003; 16: 90-98.

6. Leape LL, Bates DW, Cullen DJ, et al. Systems analysis of adverse drug events. JAMA 1995; 274: 35-43.

7. Levinson W, Roter D, Mullooly JP, et al. Physician-patient communication: The relationship with malpractice claims among primary care physicians and surgeons. JAMA 1997; 277: 553-559.

8. Gallagher TH, Waterman AD, Ebers AG, et al. Patients’ and physicians’ attitudes regarding the disclosure of medical errors. JAMA 2003; 289: 1001-1007.

9. Beachamp T, Childress J. Principles of medical ethics. 4th ed. New York: Oxford University Press; 1994.

10. Starr P. The social transformation of American medicine. New York: Basic Books; 1982.

11. Baker RB, Caplan AL, Emanuel LL, eds. The American medical ethics revolution: How the AMA’s code of ethics has transformed physicians’ relationships to patients, professionals, and society. Baltimore: Johns Hopkins University Press; 1999.

12. Leape LL. Error in medicine. JAMA 1994; 272: 1851-1857 13. Chassin MR, Galvin RW. The urgent need to improve health care quality.

Institute of Medicine National Roundtable on Health Care Quality. JAMA 1998; 280: 1000-1005.

14. Leape LL, Berwick DM. Five years after “To Err Is Human.” What have we learned? JAMA 2005; 293: 2384-2390.

15. Cooper JB, Gaba DM, Liang B, et al. The National Patient Safety Foundation agenda for research and development in patient safety. Med Gen Med 2000; 2: E38.

16. Vincent C. Patient safety. London: Elsevier; 2006. 17. Hollnagel E, Woods D, Leveson N. Resilience engineering: Concepts and

precepts. Burlington, VT: Ashgate Publishing; 2006. 18. Amalberti R, Auroy Y, Berwick D, et al. Five system barriers to achieving

ultrasafe health care. Ann Intern Med 2005; 142: 756-764. 19. Reason J. Managing the risks of organizational accidents. Burlington, VT:

Ashgate Publishing Company; 2000. 20. Reason J. Foreword. In: Runciman B, Merry A, Walton M, eds. Safety and

ethics in healthcare: A guide to getting it right. Aldershot, UK: Ashgate; 2007: p. xi-xiii.

21. McIntyre N, Popper K. The critical attitude in medicine: The need for a new ethics. Br Med J 1983; 287: 1919-1923.

22. Deming WE. Out of the crisis. Cambridge, MA: MIT Center for Advanced Engineering Study; 1986.

23. Institute for Healthcare Improvement. Measures. Available at: http://www.ihi.org/IHI/Topics/Offi cePractices/ Access/Measures. Accessed July 2, 2008.

24. Millenson ML. Demanding medical excellence: Doctors and accountability in the information age. Chicago: Chicago University Press; 1997. p. 233-267.

25. Emanuel L. Crossing the classroom-clinical practice divide in palliative care by using quality improvement methods. Commentary. BMJ clinical evidence handbook. Spring 2008. Available at: http://clinicalevidence.bmj.com/ceweb/ about/onlineaccess_uhf.jsp. Subscription required. Accessed July 2, 2008.

26. Coutu DL. Sense and reliability: A conversation with celebrated psychologist Karl E. Weick. Harvard Bus Rev 2003;81: 84-90.

27. Samkoff JS, Jacques CH. A review of studies concerning effects of sleep deprivation and fatigue on residents’ performance. Acad Med 1991; 66: 687-693.

28. Donabedian A. The quality of care. How can it be assessed? JAMA 1988; 260: 1743-1748.

29. Carayon P, Hundt AS, Karsh B, et al. Work system design for patient safety: The SEIPS model. Qual Safe Health Care 2006; 15(Suppl I): i50-i58.

30. Brasel KJ, Layde PM, Hargarten S. Evaluation of error in medicine: Application of a public health model. Acad Emerg Med 2000; 7: 1298-1302.

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MEDICAL ERRORSSelf-Assessment

Select the best answer for each question and record your answers on the Self-Assessment Answer Sheet located on page 69 or

complete your test online at www.momt.cme.edu.

21. Extra-organizational blunt-end factors, who often infl uence and shape incentives and demands within the health care organization include:a. The patient.b. Therapists and physicians.c. The patient’s families.d. Economic policymakers.

22. Early attempts at systems change revealed one Achilles heel of implementation: dysfunctional relationships between.a. Clinicians and other workers.b. Patients and their families.c. Therapists and patients.d. Policymakers and patients.

23. It depends on a culture of ________ to all relevant perspectives in which those involved in adverse events are treated as partners in learning.a. Exactness.b. Openness.c. Accuracy.d. Risk-taking.

24. The irreducible unit of patient safety delivery is multifaceted; all components of health care delivery must be integrated into a system that is as reliable as possible under _______ conditions.a. Emergency.b. Internal.c. Complex.d. External.

25. In order to ensure proper execution, an ideal design is one in which the operator ______________:a. Gives a full report of the incident in detail.b. Reports the responsible party to law enforcement.c. Recognizes employees who do not make errors.d. Cannot perform the function improperly.

26. The model with which to view patient safety divides health care systems into ___________ main domains:a. Two.b. Four.c. Ten.d. Twelve.

27. Root cause analysis (RCA) is a structured method used to analyze serious:a. Pain levels.b. Adverse events.c. Patient behavior.d. Illegal activity.

28. A nurse detected a medication error, but the physician discouraged her from reporting it. The type of factor that may lead to this latent error is:a. Institutional/regulatory.b. Organizational/management.c. Work environment.d. Team environment.

29. Reason developed the “____________ model” to illustrate how analyses of major accidents and catastrophic systems failures tend to reveal multiple, smaller failures leading up to the actual hazard.a. Upside funnel.b. Pyramid.c. Swiss cheese.d. Care cycle.

30. Care management events include:a. Wrong surgical procedure on a patient.b. Infant discharged to the wrong person.c. Stage 3 or 4 pressure ulcers acquired after admission to a

health care facility.d. Any incident in which a line designated for oxygen or

other gas to be delivered to a patient contains the wrong gas.

Page 56 INFORMED

Chapter 3

Tax Responsibilities for the Massage Therapist(2 CE Hours)

ForewordAs a licensed massage therapist (MT), you are required to follow a number of laws, rules, and regulations designed to ensure the continued health, safety, and well-being of your clients. As a business professional you are also required to follow specifi c tax guidelines that affect your business arrangement and its profi tability.

This continuing education activity was developed by INFORMED through direct interaction and assistance from the Internal Revenue Service (IRS) Taxpayer Education Division to educate and inform all members of the massage therapy industry. This activity offers an overview of the basic tax issues that you need to be aware of as you go about your day-to-day business. It is not intended to be the only guide you should use as tax laws change over time. This activity is designed to offer a general overview of your federal tax obligations and the benefi ts of complying with federal tax laws.

For questions regarding federal tax matters, course participants are urged to seek the assistance of tax professionals or to contact the IRS directly. A listing of resources in these matters is given at the end of this section. All massage therapists completing this education are encouraged to review these publications available FREE from the IRS.

Learning objectivesUpon completion of this module, the learner will be able to:

Determine the taxability of income. Recognize the specifi c tax forms on which certain types of

income are to be reported. Discuss record keeping responsibilities of the massage

therapists, especially with regard to reporting tips to employers. Determine the similarities of and differences between “Employer,”

“Employee,” “Independent Contractor” and “Booth Renter.” Identify the tax responsibilities of each of these types of workers. Identify which business expenses are deductible and which are not. Identify the benefi ts of properly reporting income and the

disadvantages of not doing so. Discuss the different types of retirement plans and

opportunities available to massage professionals. Identify educational credits and benefi ts available to massage

professionals that wish to attend college or other post-secondary educational institutions.

Identify specifi c resources and publications made to the massage professional for further assistance in understanding tax responsibilities.

IntroductionWhether you are operating as a massage establishment owner, an employee, or booth renter (independent contractor), you need to be aware of federal income tax requirements regarding your income, especially with regard to tip income. This activity is designed to give you a basic working knowledge of income tax requirements that apply to your individual business arrangement. Believe it or not, you will have defi nite advantages by complying with IRS tax laws.

“All income you receive must be reported on your income tax return, including tips.”

In general, you need to know that all income you receive from your work, whether in the form of wages, commissions, tips, sales, or rent whether by cash, check, or charge, is taxable. You also need to know the requirements concerning reporting your income on your tax return and to your employer (if you are an employee).

If operating as a booth renter, all income received (including tips) must be reported on the appropriate income tax return such as Individual Income Tax Return Form 1040, Schedule C. Both income and employment taxes must be paid.

Whether you prepare your own tax return or pay a tax preparer, you need to know enough about the tax law so you can minimize potential problems that could be costly in terms of time and money.

1. TAX LAWS AND FORMSThere are three main sources of revenue or income in the massage industry: fees for services, sale of retail products and the rental of space. Your income may come from one or all of these sources. However, you must remember:

“All Income Is Taxable”Internal Revenue Code Section 61 provides that all income from whatever source is taxable, unless it is specifi cally excluded by statute. In the case of massage professionals, taxable income includes payments such as wages, commissions, client fees and tips.

Examples of taxable income: ● Wages – Wages consist of “per hour,” “per day,” or “per

week” monies paid by an employer to an employee. Example: A therapist is paid $500.00 per week regardless of the number of services completed or products sold.

● Commissions – Commissions consist of percentages paid by an employer to an employee based on the total amount paid by clients for services of retail products. Example: A massage therapist is paid 40 percent of the total fee paid by each client plus 20 percent of the total price paid by a client for all products sold.

● Tips – Tips consist of cash, goods, or services paid by a client directly to the massage therapist in addition to the price of the service. Note that tips do not necessarily apply only to cash and they also do not apply only to tips paid in cash. Goods and services as well as tips paid by credit card or check or tips left at the work station are considered as taxable income. Example: A therapist is given a concert ticket worth $20.00 as a tip for services performed. The value of the ticket is taxable, for income tax. If the therapist is an employee, the value of the ticket is not reported to the employer as a part of tips received, but it must be reported in her tax return.

Employees will generally report the types of income listed above on forms 1040EZ, 1040A, or 1040. NOTE: If the massage therapist is self-employed, they must use form 1040 to report these types of income.

● Client Fees – Client fees consist of the entire fee a client pays for services performed. The full fee is a gross receipt to the massage establishment if the worker is an employee. If the worker is a booth renter, the full fee is gross receipts

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to the worker. Example: A massage therapist is paid a fee of $75.00 for a hot stone therapy plus a $15.00 tip. If the massage therapist is a booth renter, the full $90.00 is gross receipts to the therapist and must be reported on Schedule C of Form 1040.

Other forms of taxable income (examples): ● A massage establishment owner/landlord that receives

$700.00 rent from a booth renter must report such income on Schedule E, Form 1040.

● A booth renter that shows net profi t after expenses of $7,000.00 must report such income on Schedule C, Form 1040.

Two terms that are used in the Internal Revenue Code are “income” and “wages.” Amounts that are included in “income” are subject to federal income tax, and a person computes what is owed for federal income tax on Form 1040. Amounts that are included in “wages” are subject to federal income tax as well, but are also subject to withholding taxes such as federal income tax withholding, Social Security Taxes, and Medicare Taxes.

More information regarding tipsAs mentioned before, all tips are income subject to federal income tax. Generally, Internal Revenue Code Section 3121(q) and 340(f) provides that all tips received by an employee are also wages for purposes of the applicable withholding taxes, provided the employee receives $20.00 or more in tips in a calendar month. An employee who receives tips of less than $20.00 in a calendar month does not have to report the tips to his or her employer; however, the tips must be reported as income on the employee’s income tax return.

Internal Revenue Code Section 6053(a) requires that an employee who receives tips of $20.00 or more in any one month must report all such tips on a written statement which must be given to the employer. This report must be done at least once per month and no later than on the 10th calendar day of the following month after the tips are received. The employer may ask that these tips be reported more often than once per month; daily, weekly or before each pay period, for example.

This reporting ensures accurate determination of withholding for income, Social Security, and Medicare taxes. As an employee, full disclosure of your tip income will maximize your Social Security benefi ts as well as provide you with a number of other, possibly unexpected, benefi ts that we will discuss later in this section.

Reporting your tips correctly is not diffi cult. You must do three things:1. Keep a daily record.2. Report tips to your employer.3. Include all tips as income on your tax return.

Keeping recordsEvery person liable for any tax is required to keep records, statements, receipts, and returns. Under Internal Revenue Code Section 6001, these documents must be made available to a representative of the Internal Revenue Service upon request, to determine whether or not a person is liable for tax. The Internal Revenue Code Section 7602 gives authority to the IRS examiners to request these records.

2. DEFINITIONS AND RESPONSIBILITIESBusiness owners in the massage therapy industry structure their businesses in various ways. Massage therapists will choose spas or establishments with the business arrangement that suits

them best. This section describes the most common business arrangements and the federal tax responsibilities for each.

Your federal income tax responsibilities are based upon your employment status. In the previous section, there was considerable discussion regarding the terms “employee” and “employer.” This section will further defi ne the differences between these terms and examine the two basic types of employment status; “employee” and “self-employed.”

EmployeeA person who works for another in exchange for compensation may be an employee. Many newly-licensed massage therapists go to work as employees of existing spas or establishments. The spa generally sets work hours, provides supplies, tracks appointments and collects all receipts. The employee is paid either a salary, a commission, or a combination of the two. Factors that may indicate you are an employee include:

● Required uniforms. ● Required hours. ● Worker does not handle own sales receipts. ● Worker does not make own appointments. ● Business owner provides training. ● Business owner provides linens, table, etc.

Employee tax responsibilitiesIf you are an employee of a spa, salon or other establishment you should receive a Form W-2, Wage and Tax Statement, from your employer at the end of each year. You must report your tips to your employer so that they may be included on your Form W-2. You must report your wages on Form 1040, 1040A or 1040EZ, U.S. Individual Tax Return. You must report all income received from all employers, whether the payment was made by check or cash and whether or not the income is included on Form W-2 or Form 1099. As mentioned in the previous section, taxable income includes:

● Wages. ● Tips. ● Payments for services. ● Commissions for product sales.

As an employee, you must keep a running daily log of all your tip income. You can use Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tip income. Publication 1244 includes Form 4070, Employee’s Report of Tips to Employer, and Form 4070A, Employee’s Daily Record of Tips (Figure 1). This publication is available by calling the IRS at 1-800-829-FORM (3676) or online at http://www.irs.gov/pub/irs-pdf/p1244.pdf and includes places for you to record:

● Your name, address and Social Security Number. ● Employer’s name and address. ● The name of the establishment in which you worked. ● Period during which the tips were received. ● The amount of tips received. ● The amount of tips paid out to other employees. ● Name of the employee to whom you paid tips.

If you fail to report all tips to your employer, you will include these unreported tips on Form 4137, Social Security and Medicare Tax on Unreported Tip Income, and report them on Form 1040, U.S. Individual Income Tax Return. You will pay your share of Social Security and Medicare Tax, and you may be subject to a penalty of 50 percent of the Social Security and Medicare Tax due for not reporting your tips to your employer.

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Independent contractorIf you work for yourself rather than for another, you are not an employee. You are considered self-employed, or an independent contractor, in business for yourself.

If you have an arrangement or contract with a business owner to provide certain services, you may be either an employee or an independent contractor. Whether you are an employee or an independent contractor depends on the facts and circumstances, including some of the factors listed in the “EMPLOYEE” section. A contract that states that you are an independent contractor does not automatically mean you are an independent contractor for tax purposes! If you are receiving payments from the business and you are an independent contractor (self-employed), you should receive a Form 1099-MISC showing payments to you by the business owner.

Factors that may indicate that you are an independent contractor and not an employee include:

● Having a key to the establishment. ● Setting your own schedule. ● Purchasing your own products. ● Having your own telephone number.

Independent contractor tax responsibilities ● You should receive Form 1099-MISC from the establishment

owner. ● You must report all of your income (including tips) on the

appropriate Income Tax form, such as Schedule C or Schedule C-EZ, Form 1040, U.S. Individual Income Tax Return.

● The income is subject to self-employment tax (Social Security and Medicare) and reported on Schedule SE.

● You will probably be required to pay estimated taxes on Form 1040-ES. Estimated tax payments are made quarterly.

You may deduct allowable expenses on your Schedule C or Schedule C-EZ on Form 1040, U.S. Individual Income Tax Return.

Booth renterIf you are an operator leasing space in someone else’s spa or establishment, you are a booth renter. Just because someone has a lease agreement to “lease” space in someone else’s spa does not mean he/she is an independent contractor. In one situation, a massage therapist agrees to “lease” a space in a spa for the purpose of operating individually and catering to his or her own clients. The massage therapist was paid a specifi ed percentage of all money taken in with the spa retaining the remaining percentage. Based on the facts, it was concluded that the massage therapist was an employee of the spa.

Figure 1: Forms 4070 and 4070A (Excerpted) Tip Reporting Forms. These forms have been recreated for use in this publication.

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In another situation booth renters were found not to be employees. Similarly a massage therapist who enters into a “lease agreement” for space in a spa could be an employee, or could be an independent contractor. The fact that someone is “leasing” space is not conclusive that the individual is an independent contractor or an employee. As with any situation, all the facts and circumstances relating to independence and control are relevant in determining employment status.

Tax responsibilities of a booth renter who is an

independent contractor ● You must report all income (including tips) on Schedule C

or Schedule C-EZ Form 1040, U.S. Individual Income Tax Return, if appropriate. Social Security and Medicare Taxes must be reported on Schedule SE (Form 1040).

● You must issue Form 1099-MISC for business rent paid of $600.00 or more to non-corporate landlords each year.

● You must issue a Form 1099-MISC or Form W-2, Wage and Tax Statement, to any workers you may have.

● Estimated taxes must be paid each quarter on Form 1040ES, Estimated Tax for Individuals.

● You may deduct allowable expenses including rent, supplies and utilities on the appropriate income tax return.

Example: Jane Smith is a licensed massage therapist who owns Jane’s Therapeutic Massage. Her friend, James Doe, recently received his massage therapy license. Jane has agreed to let James rent a workstation for a fi xed monthly fee. Jane will furnish air conditioning, lights, and water. James will order all of his other supplies and will set up his own appointments. James is just starting out and he hasn’t built up a steady clientele. His work hours will vary, but this won’t be a problem because he will have a key to the spa. Jane Smith is the spa owner and landlord. Jane receives no other payments from James other than a fi xed monthly fee. Subject to the fi xed monthly fee he pays Jane, James is entitled to keep all fees and tips that he earns from his clients and does not account to Jane for the fees that he receives. He determines his own work routine. James is a booth renter who is an independent contractor.

Generally, the common law rules apply in determining whether a worker is an employee for tax purposes. Under the common law rules, a worker is an employee if the person or company for whom the employee performs services can control what will be done and how it will be done. This is so even if the worker is given freedom of action. What matters is that the person or company for whom the services are performed has the right to control the details of how the services are performed.

In deciding whether a worker is an employee or an independent contractor under the common law, it is necessary to consider the facts and circumstances of the relationship of the worker and the business. All information that provides evidence of the degree of control and the degree of independence must be considered. Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, fi nancial control, and the type of relationship of the parties.

Behavioral controlThese factors show whether there is a right to direct or control how the worker does the work. The presence of these factors showing direction and control tends to indicate that the worker is an employee. The business does not have to actually direct or

control the way the work is done, as long as the employer has the right to direct and control the work.

If the worker receives instructions from the owner on how work is to be done, this suggests direction and control by the owner. Instructions can cover a wide range of topics, for example:

● What tools or equipment to use. ● How, when, or where to do the work. ● What assistants to hire to help with the work. ● Where to purchase supplies and services.

Additionally, if the worker receives training on required procedures and methods, this suggests the business owner wants the work done in a certain way, and the worker may be an employee.

Financial controlThese factors show whether there is a right to direct or control fi nancial aspects of the business. For example, if the worker has a signifi cant fi nancial investment in the facilities he or she uses in working, that is an indication that the worker is an independent contractor.

If the worker is not reimbursed for some or all of the operating expenses, then the worker may be an independent contractor, especially if the unreimbursed business expenses are high.

If the worker has the opportunity to realize a profi t or incur a loss, this also suggests the worker is an independent contractor.

Relationship of the partiesA written contract may show what both the business owner and the worker intend and indicate how the business owner and the worker perceive their relationship. Additionally, if the worker receives benefi ts, such as health insurance, the worker may be an employee.

Establishment owner/employerIf you own or operate a massage establishment and have workers who are not independent contractor or booth renters, you are the employer of those workers. As the employer, wages paid to your employees are generally subject to withholding. Tips your employees receive from customers are considered wages under the law.You must collect Social Security, Medicare (FICA) Withholding and Income Tax Withholding on employee wages and tips. Your employee must report his or her tips to you by the 10th of the month following the month that tips are received. The report should include tips that may have been added to a credit card ticket or check and paid to the employee (service provider), as well as tips the employee (service provider) received in cash directly from customers. Your employee may report the tips on Form 4070, Employee’s Report of Tips to Employer, or on a similar statement. The statement must be signed by the employee and must show the following:

● The employee’s name, address, and social security number. ● Your name and address. ● The month or period the report covers. ● The total tips.

Example: The massage therapists at Brenda’s Spa and Salon were given Publication 1244, Employee’s Daily Record of Tips and Report to Employer, when they were hired. Every Friday, Brenda requires the therapists to give her a completed and signed Form 4070, Employee’s Report of Tips to Employer.

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Establishment owner/employer tax responsibilitiesThe responsibilities of the employer include:

● Notifying employees of their responsibility to report their tips to you and establishing a tip reporting system.

● Including the total of tips reported to you in total wages when you complete Social Security and Medicare (FICA) Withholding and Income Tax Withholding for each employee.

● Paying the matching employer portion of Social Security and Medicare as well as Federal Unemployment Tax (FUTA) on the total wages.

● Issuing Form W-2, Wage and Tax Statement to each employee at the end of the year, refl ecting total wages.

Establishment owner/landlordIf you own or operate a spa or massage establishment, you may have other workers in your spa that pay you rent for space to operate their own business. These individuals are booth renters. The rent they pay to you, the landlord, is rental income. As an owner/landlord, this rental revenue (income) is taxable and reported on Schedule E of your Form 1040, U.S. Individual Income Tax Return, or the appropriate tax return.

You may have workers in your shop who are neither booth renters nor employees, but who perform services at your establishment and meet the standards of an independent contractor with respect to your establishment. You should review the factors regarding employer-employee relationships to assure proper tax treatment.

Example 1: Karen Jones is a massage therapist who works at Rising Moon Spa, owned and operated by Joe Smith. Karen and Joe have agreed that Karen will furnish massage therapy services to clients of the spa fi ve afternoons per week. Karen schedules all of her appointments, owns all of her massage equipment and buys her own supplies. Karen expects to make a profi t. Joe Smith is the shop owner and Karen is an independent contractor.

Example 2: Julie Brown owns Brown’s Massage. Besides Julie, the spa has four licensed massage therapists. Julie pays each massage therapist a percentage of the income he or she generates. All income from their services is paid to the spa. All appointments are made through one receptionist. The spa equipment and supplies are purchased by the business. The massage therapists are employees, and Julie Brown is their employer.

Example 3: Joanna Williams has been a booth renter at Therapeutic Bodyworks for a number of years. In 2007, Joanna’s net income, or profi t, was $32,500.00. Based on Joanna’s marital status and the standard deduction for 2007:

● Joanna’s total self-employment tax is $4,592.00. ● Joanna’s income tax is $2,827.00. ● Joanna’s Total Tax due is $7,419 ($4,592.00 plus $2,827.00).

Joanna should make estimated tax payments of $1,854.75 each quarter.

Additional references which are available free of charge by calling the IRS or by visiting their website at http://www.irs.gov are listed below.

References: ● Publication 334, Tax Guide for Small Business ● Publication 505, Tax Withholding and Estimated Tax ● Publication 1244 and 1244-PR, Employee’s Daily Record of

Tips and Report to Employer ● Publication 1779, Independent Contractor or Employee

● Publication 3207, Small Business Resource Guide (CD-ROM) ● Form 4070-a, Employee’s Daily Record of Tips ● Form 4070, Employee Report of Tips to Employer ● Form 4137, Social Security and Medicare Tax on Unreported

Tip Income

3. BUSINESS EXPENSESIn the fi rst two sections we discussed that income generated from services you provide to clients, income from the sale of products, and income from rent of space are business income. All are reportable and taxable.

If you are self-employed, your business income is reported on Schedule C or a Schedule C-EZ. This business income is referred to as Gross Receipts. If you are an employee, your wages, commissions, and tips are reported directly on your Form 1040, 1040A, or 1040EZ. Rents received from renting or leasing space to operators within your salon/shop are reported on Schedule E.

As a self-employed business operator, you may deduct expenses incurred as a cost of doing business that are ordinary and necessary. This section briefl y discusses the general type of expenses you may incur.

If you sell products to customers, your income is reduced by the amount paid for the products sold.

You can further reduce your income by the amount you pay for business expenses to earn that income. Common business expenses include supplies, rent paid, advertising, employee salaries, telephone services, and utilities that, again, are ordinary and necessary. A more extensive list of business expenses is identifi ed on Schedule C. Some general expense defi nitions follow.

● Supplies: Items purchased for use on your clients as part of providing a service. These may include linens, oils and lotions, etc. Supplies can also include equipment and tools such as hot rocks, steamers, smocks, etc... Supply purchases need to be kept separate from inventory as they are not sold to customers.

● Equipment: A portion of the cost of equipment, tools, and furniture purchases for your business may also be deducted as depreciation; special rules apply.

TO BE DEDUCTIBLE, A BUSINESS EXPENSE MUST BE:Ordinary – “ Common and Accepted in your trade or

business.” AndNecessary – “ Helpful and Appropriate for your trade or

business.”

Education & trainingOnce you have started working in your fi eld, any expense you incur to maintain or improve your skills on the job is a deductible business expense. Common examples include industry shows and workshops. However, the education and training you receive in order to enter the massage industry is not a deductible expense.

Uniforms and upkeepThe cost and upkeep of work clothes are deductible if the following two requirements are met: 1. The clothing must be worn as a condition of employment. 2. The item(s) of clothing are not suitable for everyday wear.

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An employee who personally incurs any business expenses that are required by his or her employer, but is not reimbursed, has employee business expenses. Employee business expenses are deductible for individuals only as itemized deductions on Schedule A, Form 1040. They are called miscellaneous itemized deductions and are subject to a limitation based on your adjusted gross income.

Note: The appendix identifi es publications and other resources that can assist you in meeting your tax obligations.

References: ● Publication 17, Your Federal Income Tax ● Publication 334, Tax Guide for Small Business ● Publication 463, Travel, Entertainment, Gift, and Care Expenses ● Publication 529, Miscellaneous Deductions ● Publication 946, How to Depreciate Property

4. WHAT’S IN IT FOR ME?Reporting all of your income and paying the appropriate amount of tax can be taxing on anyone. You may wonder whether it’s worth your time and effort to follow the guidelines set forth. This section helps to put into perspective the positive side of tax compliance in the “big scheme of things.”

Believe it or not, what may be initially saved in taxes by not reporting all taxable income will never outweigh the long-term benefi ts of honest and proper reporting.

Greater Social Security benefi ts The benefi ts you’ll receive from Social Security will be calculated on the earnings and other information recorded under your Social Security Number (SSN). If you work for someone else, your employer withholds Social Security and Medicare Tax from your paycheck, matches that amount, and sends those taxes to the Internal Revenue Service. If you are self-employed, you pay your own Social Security Taxes when you fi le your tax return. The Internal Revenue Service (IRS) reports your earnings (from your tax return) to the Social Security Administration.

According to the Social Security Administration, the amount of earnings reported directly correlates to the amount of Social Security benefi ts one might receive.

Based on the US Department of Labor Bureau of Labor Statistics’ “Occupational Employment and Wages,” the average income of a worker in the massage therapy industry was $19.39 per hour.1 Using the $19.39 per hour and working full time, and employee who began working at age 22 and had current earnings of $40,331.20 (based on 40 hours per week for 52 weeks), social security benefi ts at age 62 will be approximately $958.00 per month. If the employee did not report all income and only reported $32,500.00, the benefi ts would be reduced to $828.00 per month.

There are fi ve major categories of benefi ts paid through the social security taxes:

● Retirement. ● Disability. ● Family benefi ts. ● Survivors. ● Medicare.

For more information about these benefi ts you may contact the Social Security Administration at 1-800-772-1213.

Increased unemployment benefi tsUnemployment Insurance (UI) is an employer paid insurance program that helps workers who are unemployed through no fault of their own. It provides temporary fi nancial help to qualifi ed individuals based on their previous earnings while they are looking for work. Employer taxes and reimbursements support the unemployment trust fund. The laws governing unemployment benefi ts vary by state.

A key component of qualifying for unemployment benefi ts is past wages. If you fail to include all of your income, including tips, unemployment benefi ts are reduced.

Improved fi nancial profi le for loansWhen you apply for a loan to purchase a car, house, your own business, or anything else, the fi nancial institution reviews your current and prior year’s income. The amount of money you can borrow (in part) will be based on the earnings/income you have reported. Again, if you DO NOT report this income, it will not be considered in determining whether you qualify for a loan.

Example: Iris could not get a car loan based on the income reported on her tax return. She had not reported all tips to her employer. She asked for a revised W-2, but her employer could not provide her one, because the original W-2 was based on the amount of tips she previously reported. Iris amended her tax return and reported tips not reported to her employer on a Form 4137 (Social Security and Medicare Tax on Unreported Tip Income), paying the appropriate increase in taxes. Based on her amended returns, Iris received the car loan.

Increased pensions (Traditional IRA or Roth IRA)

or 401(k)Few benefi ts are as important to you as your pension plan. The average American will spend more than one-quarter of his or her life in retirement, a period when the income of many people will be greatly reduced. The key to creating and experiencing a satisfying retirement is planning fi nancially.

Today there is a wide variety of deferred income retirement plans available to you. 1. If your employer does not have a savings plan, you might

want to consider either a traditional IRA or ROTH IRA. You must have earned income, and your contributions are limited to $3,000 per year (in tax year 2002. Limit is $3,500 if you are over 50 years old).

2. An employer may offer a savings plan, such as a 401(k) RETIREMENT plan or SIMPLE plan. These plans are legal tax shelters available to many individuals who work for wages. The funds in the plan cannot be used to fi nance business operations. The contribution amounts are limited to 10 percent of income and can be based on either a specifi c dollar amount or a percentage of income. Contributions reduce taxable income reported on the Form W-2. The employer usually matches a percentage of the contributions. Self-employed individuals, as well as other employers, can set up a simplifi ed employee pension (SEP) plan.

Example: Danny, a 22 year old employee, contributed 10 percent of his $36,000.00 salary to a 401(k) plan. He contributed $300.00 per month. The $3,600.00 was contributed to a savings plan each year, which earned 10 percent. The employee will accumulate $1,913,034.00 in 40 years.2 If the employer also made contributions, the amount would be substantially greater.

Page 62 INFORMED

Peace of mindFinally, having a general idea of your Federal Tax responsibilities will lessen the amount of time and energy expended on complying with the law. No fi nancial value can be attached to the comfort of knowing what rules apply in your particular situation.

If you are unable to afford professional accounting assistance, a variety of free help is available to you through the Internal Revenue Service. You may download forms and publications from the IRS Web at http://www.irs.gov/formspubs/index.html or order through the IRS by dialing 1-800-829-3676.

● Publications. ● Free tax seminars and clinics. ● Free telephonic assistance. ● Volunteer income tax assistance (VITA). ● E-mail.

Disadvantages of not reporting incomeThe Internal Revenue Code provides for the assessment of a number of penalties in relation to federal income tax reporting and fi ling. Penalty amounts range from 0.5 percent to as much as 75 percent (depending upon the failure and intent), making noncompliance costly.

A few of the tax penalties are listed below:

Section Failure/Intent

6651 Failure to fi le tax return or pay tax.6652(b) Failure to report tips.6654 Failure by individual to pay estimated income tax.6655 Failure to make deposit of taxes.6662(c) Negligence.6662(d) Substantial understatement of income tax.6672 Failure to collect and pay over tax, or attempt to

evade or defeat.6674 Fraudulent statement or failure to furnish statement

to employee.6682 False information with respect to withholding.7203 Willful failure to fi le return, supply information, or

pay tax.7206 Fraud and false statements.

You can avoid these penalties by taking these simple steps: ● Keep accurate records. ● Report all income. ● File timely and accurate returns.

References: ● Publication 575, Pension and Annuity ● Publication 590, Individual Retirement Arrangements ● Publication 915, Social Security and Railroad Retirement

Benefi ts.

5. EDUCATION CREDITS AND BENEFITSTwo nonrefundable tax credits are available for persons who are paying higher education costs for themselves or members of their families. This section discusses the Hope credit and the Lifetime Learning credit. A tax credit reduces the amount of income tax you pay, unlike a deduction, which reduces the amount of income that is subject to tax.

Hope creditThe Hope credit is available for the fi rst two years of undergraduate education. You may be able to claim a Hope credit of up to $1,650.00 for the qualifi ed tuition and related expenses paid for each eligible student that is either yourself, your spouse or a dependent for whom you claim an exemption on your tax return.

The amount of the Hope credit is 100 percent of the fi rst $1,100.00 plus 50 percent of the next $1,100.00 you pay for each eligible student’s qualifi ed tuition and related expenses. The Hope credit is gradually phased out if your modifi ed adjusted gross income (MAGI) is between $47,000 and $57,000 ($94,000 and $114,000 if fi ling a joint return).

Rules that Apply ● The credit is based on qualifi ed tuition and related expenses paid. ● Qualifi ed tuition and related expenses are tuition and expenses

required for enrollment or attendance at an eligible educational institution such as course-related books, supplies and equipment, and student activity fees. Qualifi ed education expenses do not include insurance, medical expenses (including student health fees), room and board, transportation or similar personal, living or family expenses even if these payments must be paid as a condition of enrollment or attendance.

● An eligible educational institution is any accredited college, university, vocational school, or other accredited post-secondary educational institution eligible to participate in a student aid program administered by the Department of Education. (The educational institution should be able to tell you if it is an eligible educational institution.)

In addition, the eligible student must meet the following requirements:1. Did not have expenses that were used to fi gure a Hope Credit

in any 2 earlier tax years.2. Has not completed the fi rst two years of post-secondary

education.3. Is enrolled in a program that leads to a degree, certifi cate, or

other recognized educational credential.4. Is taking at least one-half of the normal full-time workload

for his or her course of study for at least one academic period beginning during the calendar year.

5. Has no felony conviction for possessing or distributing a controlled substance.

Lifetime Learning CreditA lifetime learning credit of up to $2,000.00 may be taken for the total qualifi ed tuition and related expenses paid during the tax year. The maximum amount of the credit is 20 percent of the fi rst $10,000.00 paid for qualifi ed tuition and related expenses for all students in the family.

Unlike the Hope Credit: ● The lifetime learning credit is not based on the student’s

workload. It is allowed for one or more courses. ● The lifetime learning credit is not limited to students in the fi rst two years of post-secondary education.

● Both degree and non-degree courses are eligible. Expenses for undergraduates, graduates, and students acquiring and/or improving their job skills are eligible.

● There is no limit on the number of years for which the credit can be claimed for each student.

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● The credit does not vary (increase based on the number of students in a family. The maximum credit was $2,000.00 per taxpayer for 2007).

● There is no requirement that a student’s record be free of any felony drug convictions.

Rules that apply ● The credit is based on qualifi ed tuition and related expenses

you pay for you, your spouse, or a dependent you claim on your tax return.

● Qualifi ed tuition and related expenses are tuition and expenses required for enrollment or attendance at an eligible educational institution, such as course related books, supplies and equipment, and student activity fees. Qualifi ed education expenses do not include insurance, medical expenses (including student health fees), room and board, transportation or similar personal, living or family expenses even if these payments must be paid as a condition of enrollment or attendance.

● An eligible educational institution is any accredited college, university, vocational school, or other accredited post-secondary educational institution eligible to participate in a student aid program administered by the Department of Education. (The educational institution should be able to tell you it is an eligible educational institution.)

You may not claim either of these educational credits if: ● Your MAGI is $57,000 or more ($114,000 if fi ling jointly). ● Your fi ling status is married, fi ling separately. ● You are listed as a dependent in the “Exemptions” section of

another person’s tax return. ● You or your spouse was a nonresidential alien for any part of

the tax year and the nonresidential alien did not elect to be treated as a resident alien for tax purposes.

● You claim the Lifetime Leaning Credit or a tuition and fees deduction for the same student in the same tax year.

As you can see, many of the rules surrounding these two types of education tax credits are identical. However, you can elect only one of the credits during any tax year. You may therefore wish to claim the Hope credit for the fi rst two years of post-secondary education (as it generally provides greater tax relief during this period), and claim the lifetime learning credit in later tax years.

The education credits for both programs are gradually reduced (phased out) if your modifi ed adjusted gross income (MAGI) is between $47,000 and $57,000 ($94,000 and $114,000 if fi ling a joint return). Neither the Hope Credit nor the Lifetime Learning Credit may be claimed by a single taxpayer with a MAGI of more than $57,000 or a married couple fi ling jointly with a MAGI of more than $114,000.

These credits reduce your tax, but they are not refundable. This means if the credits are more than your tax, the difference is not refunded to you. Form 8863 is used to claim the credits and is attached to your income tax return.

References: ● Publication 4, Student’s Guide for Federal Income Tax ● Publication 970, Tax Benefi ts for Higher Education

Appendix ● Publication 4: Student’s Guide for Federal Income Tax ● Publication 17: Your Federal Income Tax ● Publication 334: Tax Guide for Small Business

● Publication 463: Travel, Entertainment, Gift, and Car Expenses ● Publication 503: Child and Dependent Care Expenses ● Publication 505: Tax Withholding and Estimated Tax ● Publication 529: Miscellaneous Deductions ● Publication 531: Reporting Tip Income ● Publication 533: Self Employment Tax ● Publication 575: Pension and Annuity ● Publication 583: Starting A Business and Keeping Records ● Publication 587: Business Use of Your Home ● Publication 590: Individual Retirement Arrangements ● Publication 596: Earned Income Tax Credit ● Publication 915: Social Security and Railroad Retirement

Benefi ts ● Publication 970: Tax Benefi ts for Higher Education ● Publication 1244: Employee’s Daily Record of Tips ● Publication 1244-PR: Report to Employer ● Publication 1779: Independent Contractor or Employee ● Publication 1875: Employer/Tip Income Reporting ● Publication 3144: Tips on Tips/for Employees ● Publication 3148: Tips on Tips/for Employers ● Publication 3207: Small Business Guide (CD-ROM) ● Publication 3518: Beauty and Barber Industry Federal Guidelines

Tips on tips : A guide to tip income reporting for

employees who receive tip income(Reprinted from IRS Publication 3148)http://www.irs.gov/pub/irs-pdf/p3148.pdf

If you work at a hair salon, barber shop, casino, golf course, airport, hotel, or perform cleaning, food delivery, or taxi cab services, and receive tips, this guide is for you.

The tip income you receive as an employee from the services such as those listed above — whether cash or included in a charge — is taxable income. As taxable income, these tips are subject to federal income tax, social security and Medicare taxes, and may be subject to state income tax as well. The Internal Revenue Service (IRS) has prepared this guide to aid the employee who may need answers to tip income reporting questions.

WHAT TIPS DO I HAVE TO REPORT?

Do I have to report all my tips to my boss?If you received $20.00 Or more in tips in any one month, you should report all your tips to your employer so that federal income tax, social security and medicare taxes, and maybe state income tax can be withheld.

Do I have to report all my tips on my tax return?Yes. All tips are taxable income and should be reported on your tax return.

I was told that I had to report only a certain percentage of my total sales as tips. Is this true?No. You must report to your employer all (100 percent) tips you receive, except for the tips from any month that do not total at least $20.00.

Sometimes I don’t get tips directly from customers, but rather from another employee. Do I need to report those tips?Yes. Employees who receive tips from another employee are required to report “tip-outs.” Employees often disburse tips out of their earned tips to another employee (tip-outs). Remember, all tips are taxable income.

Page 64 INFORMED

Do I have to report tip-outs that I pay to other employees?No. You report to your employer only the amount of tips you retain. However, you must maintain records of tipouts with your other tip income (cash tips, charged tips, split tips, tip pool).

WHAT RECORDS DO I NEED TO KEEP?

What type of records do I have to keep?You must keep a running daily log of all your tip income. You can use Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tip income for one year. Publication 1244 includes Form 4070, Employee’s Report of Tips to Employer, and Form 4070A, Employee’s Daily Record of Tips. These forms have spacing for you to log your name, the employer’s name and address, date tips were received, date of entry, tips received, tips paid out, and name of employee paid. Your daily log would be your best proof should your income tax return be questioned. For a free copy of Publication 1244, call the IRS at 1-800-829-3676.

What can happen if I do not keep a record of my tips?If it is determined in an examination that you underreported your tip income, the IRS will assess the taxes you owe based on the best available records of your employer. Tip income adds up. Underreporting could result in you owing substantial taxes, penalties, and interest.

If I report all my tips to my employer, do I still have to keep records?Yes. You should keep a daily log of your tips so that in case of an examination, you can substantiate the actual amount of tips received. There are a number of reasons why you might need records:

● Your return could be randomly selected for a federal income tax examination.

○ For example: Your Form 1040, U.S. Individual Income Tax Return, establishes that you have your own home, two cars, and three exemptions, and your Form W-2 shows that you earned only $10,000 in income. In this scenario, an examination may occur if the examiner determines that income may have been underreported.

● A tip examiner could review your employer’s books and records. The examination could reveal unreported tip income that you may later need to verify.

● An Internal Revenue Service Center may run a match of your income information from your Form 1040, U.S. Individual Income Tax Return, with the income information from your Form W-2. If these fi gures do not match, you could receive a notice about the discrepancy and a possible examination of your tax return.

HOW DOES THIS AFFECT MY

INCOME TAX FILING?I forgot to report my tip income to my employer, but I remembered to record it on my federal income tax return. Will that present a problem?If you do not report your tip income to your employer, but you do record the tip income on your federal income tax return, you may owe a 50 percent social security and Medicare tax penalty and be subject to a negligence penalty and possibly an estimated tax penalty.

When you do not report your tips to your employer, it places your employer at risk of possible assessment of the employer’s share of social security and Medicare taxes.

If I report all my tips but my taxes on the tips are greater than my pay from my employer, how do I pay the remaining taxes?You can either pay the tax when you fi le your federal income tax return or you can reach into your tip money and give some to your employer to be applied to those under-withheld taxes. The employer will then record these taxes and you will get credit on your Form W-2. If you wait to pay when you fi le your tax return, you may be subject to an estimated tax penalty.

What can happen if I don’t report my tips to the IRS?If the IRS determines through an examination that you underreported your tips, you could be subject to additional federal income tax, social security and Medicare taxes, and maybe state income tax. Also, a penalty of 50 percent of the additional social security and Medicare taxes, and a negligence penalty of 20 percent of the additional income tax, plus interest, may apply.

What’s in it for me if I report all my tip income?There are many good reasons why you want to report all your tip income:

● Increased income may improve fi nancing approval when applying for larger loan amounts (mortgage, car, and other loans).

● Increased worker’s compensation benefi ts, should you get hurt on the job - Increased unemployment compensation benefi ts.

● Increased social security and Medicare benefi ts (the more you pay, the greater your benefi ts).

● Increased employee pension, annuity, or 401(k) participation. ● Check with your employer for other increased benefi ts (based

on pay) that your company may offer, such as life insurance, disability payments, and the right to purchase stock options.

● Compliance with the tax law.

IS TIP REPORTING UNIQUE TO A

SPECIFIC INDUSTRY?Does tip income reporting apply only to employees in a specifi c industry?No. Anyone who receives tip income is required by law to report it to his or her employer. The Tip Rate Determination/Education Program (TRD/EP) was fi rst promoted in the gaming industry (casino industry) in Las Vegas, Nevada, and subsequently to the food and beverage industry. Other individuals that receive tip income include airport skycaps, bartenders, hair stylists, bellhops, casino workers, delivery service people, golf caddies, hotel housekeepers, manicurists, masseuses, parking attendants, railroad redcaps, and taxi drivers.

Why should I report my tips to my employer?When you report your tip income to your employer, the employer is required to withhold federal income taxes, social security and Medicare taxes, and maybe state income tax. Tip reporting may increase your social security credits resulting in greater social security and Medicare benefi ts when you retire. Tip reporting may also increase other benefi ts to which you may become entitled, such as unemployment benefi ts, worker’s compensation, or retirement benefi ts. Additionally, a greater income may improve fi nancing approval for mortgage, car, and other loans.

Why has tip reporting become such an issue?To report all tip income has always been the law. The IRS has put greater emphasis on reporting tip income over the past few years because a signifi cant number of taxpayers are not reporting all their tip earnings as taxable income.

INFORMED Page 65

WHAT IS THIS COMPLIANCE PROGRAM

I’VE HEARD ABOUT?My employer has entered into a compliance agreement with the IRS concerning tips. What is this?The Tip Rate Determination/Education Program was developed in 1993 to help those employees receiving tip income and their employers understand the laws on reporting tip income. Under this program, and depending on your specifi c business, your employer may enter into one of two arrangements — the Tip Rate Determination Agreement (TRDA) or the Tip Reporting Alternative Commitment (TRAC) (created in June 1995). Ask your employer for more information about this program.

Currently, the TRDA is only available to the food and beverage industry and the gaming (casino) industry. At this time, TRAC is open to the food and beverage industry and the hair styling industry (This is included here for those who perform massage therapy services through a salon. –ed.). Ask your employer for more information about this arrangement as it may be extended to other industries where tipping is customary.

TRDA–What is my responsibility, as an employee, under the Tip Rate Determination Agreement?You are required to fi le your federal tax returns. You may be asked to sign a Tipped Employee Participation Agreement proclaiming that you are participating in the program. The employer, as a participant in the TRDA, has agreed with the IRS to a tip rate for the employer’s establishment. To stay a participating employee, you must report tips at or above the tip rate determined by the agreement. Furthermore, as part of the TRDA arrangement, the employer is required to report your name, social security number, the hours worked or sales made, your job classifi cation, and your reported tips to the IRS if you do not report tips at or above the determined tip rate.

TRAC–What is my responsibility, as an employee, under the Tip Reporting Alternative Commitment?

● Directly-tipped employee: ○ Your employer will furnish you with a written statement

(at least monthly) refl ecting your charged tips. ○ You are to verify or correct this statement. ○ You are to indicate the amount of cash tips received. ○ When reporting your cash tips, you should remember that

there is a correlation between charged tips and cash tips.(Your employer may be able to inform you of the establishment’s charged sales to cash sales ratio. For example, if the establishment is 50 percent charge and 50 percent cash, and you received and reported $100 in tips on charged receipts, it is reasonable to believe that you should be reporting close to $100 in cash tips.) ▪ You may be asked to provide the name and amount

of any tip-outs to indirectly-tipped employees. ● Indirectly-tipped employee:

You are required to report all your tips to your employer. If the establishment has the directly-tipped employee provide the name and amount of tips shared with you, the establishment could provide you with a statement of tips that you would need to verify or correct.

The IRS provides the following publications and forms relating to tip income reporting. These products can be downloaded from the IRS Web site at www.irs.ustreas.gov and ordered through the IRS

by dialing 1-800-829-3676. (TTY/TDD equipment access, dial 1-800-829-4059)

● Pub 505 - Tax Withholding and Estimated Tax ● Pub 531 - Reporting Tip Income ● Pub 1244 - Employee’s Daily Record of Tips and Report to

Employer. This publication includes Form 4070, Employee’s Report of Tips to Employer, and Form 4070A, Employee’s Daily Record of Tips.

● Form 1040ES - Estimated Tax for Individuals ● Form 4137 - Social Security and Medicare Tax on

Unreported Tip Income

Footnotes1. http://www.bls.gov/OES/current/oes319011.htm United States Department of Labor,

Bureau of Labor Statistics, Occupational Employment Statistics, “Occupational Employment and Wages, May 2007.” 31-9011 Massage Therapists.

2. www.FinAid.org

Page 66 INFORMED

TAX RESPONSIBILITIES FOR THE

MASSAGE THERAPIST

Self-assessmentSelect the best answer for each question and record your answers

on the Self-Assessment Answer Sheet located on page 69 or complete your test online at www.momt.cme.edu.

31. Which section of the Internal Revenue Code provides that all income from whatever source is taxable, unless it is specifi cally excluded by statute?a. 27.b. 61.c. 107.d. 259.32.

32. If a massage therapist is self-employed, which form must be used to report taxable income?a. 1040EZ.b. 1040A.c. 1040.d. 4070.

33. All of the following are true about tips EXCEPT:a. Tips of less than $20 in a calendar month do not need to

be reported on an employee’s income tax return.b. Tips are generally regarded as wages for purposes of

applicable withholding taxes.c. Tips of less than $20 in a calendar month do not need to

be reported to an employer.d. All tips are income subject to federal income tax.

34. All of the following are factors that may indicate that a worker is an employee of a massage establishment EXCEPT:a. Worker is required to wear a uniform.b. Worker is provided training by the business owner.c. Worker is required to work specifi c hours.d. Worker is required to make their own appointments.

35. Independent contractors will probably be required to pay estimated taxes. Which of the following is true regarding estimated taxes?a. They are paid on Schedule C-EZ, Form 1040.b. They are paid quarterly.c. They are paid monthly.d. They are paid in January of each year.

36. Which of the following statements is true regarding Booth Renters?a. Booth Renters may sometimes be considered employees

of the establishment from which they lease space.b. Booth Renters are always considered as independent

contractors for income tax purposes.c. A Booth Renter that enters into a lease agreement

for space in a spa is concluded to be an independent contractor by virtue of that agreement.

d. Booth Renters must issue Form 1099-MISC for business rent paid of $1,000 or more to corporate landlords each year.

37. Which of the following statements is true regarding deductible business expenses?a. Advertising expenses may not be deducted.b. Supply purchases must be recorded along with inventory

in order to be deducted.c. Education and training used to enter the massage

industry is not a deductible expense.d. The cost and upkeep of work clothes are not deductible if

the clothing must be worn as a condition of employment.

38. The Internal Revenue Code provides for the assessment of a number of penalties in relation to federal income tax and fi ling. Penalty amounts range from 0.5 percent to as much as ___________ depending upon the failure and intent.a. 25 percent.b. 50 percent.c. 75 percent.d. 100 percent.

39. Which of the following statements is true regarding the Hope credit for education?a. You may claim a Hope credit of up to $2,500.b. An eligible student must have completed the fi rst two

years of post-secondary education.c. Hope credit is not available to the family members of a

taxpayer.d. An eligible student must be enrolled in a program that

leads to a degree, certifi cation or other recognized educational credential.

40. If you do not report your tip income to your employer, but you do record the tip income on your federal income tax return, you may incur a social security and Medicare tax penalty that is as high as:a. 20 percent.b. 50 percent.c. 62.5 percent.d. 75 percent.

INFORMED Page 67

Notes

Page 68 INFORMED

Notes

INFORMED Page 69

Self-Assessment Answer Sheet 2014-2015 Missouri Massage Therapy Update

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MOMT1415

Page 70 INFORMED

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2014-2015 Missouri Massage Therapy Update

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