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Physical Therapist Business Owner Case Study: Failure to have appropriate staff supervision and oversight policies and procedures

Medical Malpractice Case Study with Risk Management Strategies
Presented by HPSO and CNA

Medical malpractice claims may be asserted against any healthcare provider, including physical therapists and physical therapy business owners. This case study involves allegations of medical malpractice against the physical therapist individually as a treating provider and as the business owner who operates an outpatient physical therapy clinic.


The patient was a 35-year-old female who suffered an injury to her right patellar tendon during a snow skiing accident while on vacation. Immediately following the accident, the patient was taken to the emergency department (ED) and diagnosed with a partially torn iliotibial (IT) band and patellar tendon of her right leg, sprained left thigh muscle, and right distal bicep. The patient was informed that the IT band would require immediate surgical repair, but instead of undergoing the repair at that hospital, she elected to have the procedure performed closer to home. 

A few days following the accident, the patient underwent an abnormally complex IT band and patellar tendon reconstruction. After the procedure, the surgeon documented that the patient’s tendon was “significantly shredded.” While the surgeon informed the patient that he believed the procedure to be a success, he cautioned that her injury was more severe than he had anticipated. 

The patient began physical therapy with the insured physical therapist (PT) at his practice on post-operative (post-op) day 33.  She also began receiving myofascial release massages with a dually licensed massage therapist/physical therapy assistant (PTA) who was employed by the PT’s practice, starting on post-op day 60. The PT was aware that the patient was receiving massages. However, he assumed the massages were gentle and tension relieving, and that the massage therapist/PTA abstained from any techniques that involved the right knee. However, the PT never confirmed the treatment that was being performed.  

The patient’s strength slowly improved, and she progressed well during the first 13 sessions with the PT.  However, she was unable to achieve a greater than 70 degrees flexion of her right knee. Despite the increase in strength, she complained of excruciating pain in her right knee at each physical therapy and massage visit. 

At the beginning of the fourteenth session, the PT had the patient sit on the treatment table allowing the right leg to dangle off the side of the table. The PT pressed on the patient’s shin to help stretch the tendon beyond the 70-degree mark, but less than 80 degrees. While administering this treatment, the PT felt a “pop” and believed it was the “breaking of scar tissue”. After feeling the pop, the PT then observed bleeding from the post-operative site and an open wound. 

The patient was immediately taken to the emergency department where she was diagnosed with a re-torn patellar tendon. A second surgery was performed, during which it was discovered that there was not a viable tendon to use for the repair. Due to a “tremendous amount of scar tissue” and the fact that the tendon was non-viable, a cadaver tendon was inserted. Post-operatively, the patient endured numerous knee manipulations under anesthesia due to the inability to tolerate them in the physical therapy office setting.

The patient continued to have a Grade 3 patellar chrondomalacia with 3 mm shortening of her right leg as compared to her left leg. Due to this variation in her leg, the patient developed a right-sided herniated extruded disc at L5- S1; herniation at L4-5 with nerve impingement and also degenerative disc disease. 

The patient was a former college basketball athlete, and, after college, she participated in bodybuilding competitions. The patient was always very active, but currently can walk only short distances due to her ongoing nerve impingement and inability to fully extend her right knee. She continues to receive steroid injections for radiating back pain and sees a psychologist for increased depression and anxiety related to her inability to participate in physical activities with her family and friends. 

Upon investigation, the PT learned that during the patient’s last two massage sessions, the massage therapist/PTA had performed a technique intended to help the breakdown of the scar tissue and improve fascial restrictions in the patient’s right knee. The technique involved deep myofascial massages in hopes of improving her range of motion, eliminate her pain and restore normal function to her right knee. The PT was unaware that the massage therapist/PTA was performing the technique during the massages, acknowledging that this procedure should have been cleared by the referring orthopedic surgeon due to the complexity of the patient’s injury.

The patient (plaintiff) filed a lawsuit against the PT individually as the treating provider. The plaintiff asserted the following allegations against the PT as the treating provider:
  • The PT deviated from medically accepted standard of care during therapy, causing the re-tear of the patellar tendon;
  • The PT deviated from the standard of care by pursuing an overly aggressive course of treatment, given the nature of plaintiff’s initial patellar tendon repair;
  • The PT failed to assess the plaintiff’s level of tightness and mobility of the right knee before stretching; and
  • The PT failed to properly respond to the plaintiff’s complaints of pain.

The plaintiff also contended that the PT, as the business owner and employer of the massage therapist/PTA, was vicariously liable for the actions or omissions of the massage therapist/PTA. The plaintiff asserted the following allegations against the massage therapist/PTA and the PT as the business owner of the physical therapy practice and employer of the massage therapist/PTA:
  • The massage therapist/PTA failed to assess the plaintiff before providing massage treatment and stretching; 
  • The massage therapist/PTA failed to properly respond to plaintiff’s complaints of pain;
  • The massage therapist/PTA failed to confirm with the treating PT that the type of massage the patient was receiving was appropriate given the nature of plaintiff’s initial patellar tendon repair;   
  • The massage therapist/PTA deviated from the standard of care by pursuing an overly aggressive massage, given the nature of plaintiff’s initial patellar tendon repair;
  • The PT, as business owner, failed to have appropriate policies and procedures for supervision and oversight of patients receiving physical therapy and massages concurrently; and 
  • The PT’s omission of such supervision and oversight policies and procedures was the direct cause of the plaintiff’s re-injury and ongoing pain and suffering.

Risk Management Comments

The insured PT’s defense team believed that the liability claim against the PT was questionable. The physical therapy expert witness opined that the PT complied with the standard of care and that the therapy provided was appropriate and properly documented. However, the expert further reported that the employed massage therapists/PTA’s technique was probably aggressive, and that performing it eight weeks after surgery was too soon.

In addition to the defense PT expert, an orthopedic surgeon defense expert opined that the technique the massage therapist/PTA performed probably weakened the surgical area, causing the complete rupture. The orthopedic surgeon agreed with the physical therapy expert that the PT operated within the medically accepted standard of care. Although there was no dispute that the injury occurred during physical therapy, the defense team argued that the plaintiff was uniquely susceptible to tendon injuries, as evidenced by a later spontaneous rupture of her left bicep during an upper body work out. The defense retained an orthopedic surgery expert who would testify that the plaintiff’s history of steroid use during her bodybuilding competitions made her susceptible to the tendon injuries and that her patellar tendon was “critically damaged” prior to the initial repair.

Defense counsel estimated a 60 percent chance of a defense verdict for the insured PT. However, the likelihood of a defense verdict for the PT as the business owner was estimated to be much lower due to the actions of his employed massage therapist/PTA.



The PT business owner requested that the claim be resolved prior to a jury trial, if possible, due to the recent termination of the employed massage therapist/PTA. The PT business owner had discovered a second incident in which the massage therapist/PTA performed an aggressive massage on a three-weeks post-operative rotator cuff repair patient, causing a re-injury to the shoulder. The second incident occurred a few weeks after the employed massage therapist/PTA’s deposition in the plaintiff’s case, and discovery of the details of the termination created the potential to increase exposure for the PT business owner.

Defense counsel assessed the potential exposure/claim value of the case as being between $500,000 and $1 million. The case ultimately settled with a total incurred of more than $950,000.

(Monetary amounts represent the total payments, including indemnity and expenses, made on behalf of the PT individually and as the business owner.)

Risk Management Recommendations - Physical Therapists

  • Be vigilant about protecting patients from the most common types of injuries, such as re-injuries, fractures and burns.
    • Adhere to organizational treatment protocols, when available. If protocols are not available, refer to the applicable state practice act and professional organization guidelines.
    • Review published evidence-based best practices.
    • Determine the level of patient compliance with any prescribed exercises.
    • Establish realistic expectations regarding the likelihood of experiencing pain during therapy, probable outcomes and duration of treatment.
    • Document all discussions with the patient in the patient healthcare information record.
  • Before establishing a treatment plan, be aware of the patient’s pre- and post-surgical diagnoses, including the extent of the injury (e.g., grade and percentage of tear in a shoulder) as this can significantly affect the likelihood of  re-injury.
  • Document objective facts related to patient care and refrain from using subjective opinions or conclusions.
  • Respond immediately to any signs or symptoms of a possible patient injury by determining the need for additional medical evaluation.
  • Contact the referring practitioner for any consistent patient complaints, such as pain or swelling.

Risk Management Recommendations - Physical Therapy Business Owners

  • Know the current scope of practice parameters for a physical therapist, a physical therapist assistant, physical therapy aides, physical therapy students and any other clinical provider working at your place of business.
  • Ensure that appropriate job descriptions, policies, procedures, training and education are in place when the practice employs staff working in dually licensed/certified roles (e.g., PTA working as a massage therapist, PT working as a personal trainer). For example, when a licensed PT is working as a fitness trainer, the PT must be careful to distinguish between fitness advice and physical therapy advice in all communications with the fitness participants. Similarly, if a PTA is providing massage therapy services, the distinction between massage therapy and other services should be clarified. The delineation of roles must be established in job descriptions, policies, procedures, patient/participant consents, liability waivers and disclaimers. 
  • Provide staff members with ongoing training in effective communication strategies and monitor patient-staff interactions. 
  • Be knowledgeable about the levels of supervisory responsibility of a PT and know when it is acceptable for a PT to have general, direct or direct personal supervision of physical therapist assistants, physical therapy aides, physical therapy students and any other clinical provider working at your place of business.
  • When an incident occurs, instruct staff to complete an incident report. Use the report as a quality improvement tool.
  • Perform, at a minimum, annual performance reviews for each employee, including a review of errors, “near misses”, documentation requirements compliance, existing skills and directly observed competencies. Provide physical therapy staff with coaching, mentoring, and clinical and system education as needed to ensure that patient safety requirements are satisfied.
  • Ensure that clinical practices comply with standards endorsed by physical therapy professional associations, state practice acts and facility protocols.
  • Provide appropriate clinical support for employed licensed staff, in compliance with supervisory or employment agreements. Encourage compliance with relevant legal, ethical and professional standards for clinical practice.
  • Ensure that the physical therapy practice has appropriate patient/client/participant consents, liability waivers and disclaimers in place, including when offering nontraditional therapy or services not covered by third party payors (i.e., fitness, wellness and prevention, massage, acupuncture). The regulations/rules and risks of providing non-traditional therapy and/or non-covered services are not the same as traditional physical therapy services. Prior to offering these services, a comprehensive analysis should be conducted to determine risks associated with Medicare, Medicaid, and third-party payor compliance, as well as state-specific physical therapy licensure rules and regulations. A review of the professional liability risks of the practice also should be conducted to ensure that the practice has adequate liability insurance to cover all services that are being performed. Physical therapy business owners should not overlook the importance of obtaining legal advice specific to their circumstances and services.


  1. May, J. M., Richardi, T. M., & Barth, K. S. (2016). Dialectical behavior therapy as treatment for borderline personality disorder. Mental Health Clinician6(2), 62-67.
  2. HPSO & CNA. (2019). Counselor Spotlight: Boundaries.

These are illustrations of actual claims that were managed by the CNA insurance companies.  However, every claim arises out of its own unique set of facts which must be considered within the context of applicable state and federal laws and regulations, as well as the specific terms, conditions and exclusions of each insurance policy, their forms, and optional coverages. The information contained herein is not intended to establish any standard of care, serve as professional advice or address the circumstances of any specific entity. These statements do not constitute a risk management directive from CNA. No organization or individual should act upon this information without appropriate professional advice, including advice of legal counsel, given after a thorough examination of the individual situation, encompassing a review of relevant facts, laws and regulations. CNA assumes no responsibility for the consequences of the use or nonuse of this information.
This publication is intended to inform Affinity Insurance Services, Inc., customers of potential liability in their practice. This information is provided for general informational purposes only and is not intended to provide individualized guidance. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy. Any references to non-Aon, AIS, NSO, HPSO websites are provided solely for convenience, and Aon, AIS, NSO and HPSO disclaims any responsibility with respect to such websites. This information is not intended to offer legal advice or to establish appropriate or acceptable standards of professional conduct. Readers should consult with a lawyer if they have specific concerns. Neither Affinity Insurance Services, Inc., HPSO, nor CNA assumes any liability for how this information is applied in practice or for the accuracy of this information.

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