So you want to be a Medical Director?

“Where do I sign?” That may be the question sliding off your tongue after being offered a medical director role with an outside healthcare organization. You listened as their team (operations, business development, maybe a senior leader or two) outlined the opportunity, and it seems like you’d be crazy not to sign up immediately.

The best course of action: take a breath, thank everyone for their time, and call your healthcare attorney.

A medical director agreement offers professional development and economic incentive. It also comes with significant responsibilities, restrictions and growth considerations. Likely missing from the presentation were details on what happens when things go wrong, what risks you face, and why the role might not fit with your background and other responsibilities.

First, the medical director role exposes a physician to additional risk, both as a medical professional and from regulatory compliance. A medical director is ultimately responsible for the care delivered in a clinic he or she oversees and can be sued as part of the care team for a given patient. A medical director is also responsible for compliance with various healthcare regulations. Two examples are the CMS Conditions for Coverage that an entity likely will need to follow, and privacy regulations like HIPAA. In addition, medical directors face exposure to complaints to state licensure boards, even if a complaining patient was treated only by other physicians.

Second, a medical director agreement will come with restrictions on other roles the medical director can serve, and where they can serve in those roles. Understanding these restrictions and how they may impact a physician’s practice and ability to grow is key, and a potential medical director should understand the legal and business implications to their practice and development. As healthcare organizations continue to consolidate, affiliate and coordinate their activities, additional restrictions may arise for their partners and service providers. Medical directors need to understand how a potential partner’s affiliations, whether current or prospective, could impact his or her ability to choose another partner or affiliate with a different entity. The increasingly complex healthcare environment requires a careful evaluation, and non-compete language within any agreement must be fully examined to preserve a provider’s ability to grow.

Farr & Farr leverages years of healthcare business and corporate development experience to help clients understand the legal and business implications of any action. Contact Dave Farr to discuss your goals and how best to reach them.