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Before You Sign—Minimizing Medical Director Liability Exposure

March 24, 2024

To minimize liability exposure, physicians who are offered a medical director position should consider the following:

Scope of Medical Director Services

The term “Medical Director” can include a significantly broad array of services, including both clinical (e.g., supervising staff) and administrative services (e.g., credentialing, operations, budget management, implementing policies and protocols, etc.). Some facilities are required by law to have a medical director, with the scope of their services determined by such laws and related regulations. Other medical director positions provide more discretion regarding the services to be provided and level of oversight required. Physicians who are considering a medical director position should ensure they fully understand the services expected to be provided and any legal or regulatory requirements that are associated with such responsibilities to avoid claims or other liability due to noncompliance. Physicians should also ensure that their medical director agreement identifies these responsibilities with as much specificity as reasonably possibly.

Supervising Clinical Staff

Some medical director positions focus on the supervision of mid-level and other staff who may perform services under the medical director’s delegation and supervision. This type of medical director position is increasingly common in medical spas and other medical offices and facilities with services performed primarily by non-physician staff.

Subject to certain exceptions set forth by law or regulatory rules, the Michigan Public Health Code generally allows a physician to delegate to a licensed or unlicensed individual an act, task or function that the individual is otherwise qualified by education, training or experience to perform if the act, task or function is within the physician’s scope of practice and will be performed under the physician’s supervision. Michigan law defines “supervision” to mean the overseeing or participation in the work of another individual by a licensed health professional if all of the following circumstances exist:

  • The continuous availability of direct communication by in person or by radio, telephone or telecommunication between the supervising health professional and the supervised individual;
  • The availability of the licensed health professional on a regularly scheduled basis to review the practice of the supervised individual, to provide consultation to the supervised individual, to review records, and to further educate the supervised individual in the performance of the individual’s functions; and
  • The provision by the supervising health professional of predetermined procedures and drug protocol.

Importantly, physicians who perform supervisory services as medical director may be exposed to claims related to any negligence or malpractice committed by supervised staff, even if the medical director was not directly involved in the care provided. Similarly, physicians who inappropriately delegate acts and tasks to staff, or who fail to provide adequate oversight and supervision risk potential disciplinary action against their medical licenses due to negligent delegation and supervision. Physician who are considering a medical director position that requires the delegation of acts or tasks and supervision of staff (including the review and signing of charts and orders) should ensure that they have the ability to determine the acts, tasks and functions to be delegated, that any supervised staff have the necessary education, training and experience to perform the acts, tasks and functions, and that they will have the ability to determine the procedures and protocols associated with the same.

Insurance for Medical Directors

Too often, physicians assume that their professional liability insurance policy will adequately cover them for all claims that may be brought against them for any professional services rendered during their medical careers. The reality is that many professional liability policies will provide coverage for patient care services but exclude medical director services. Additional coverage, such as through a separate medical director or directors and officers policy, may be necessary. Physicians who are considering a medical director position should evaluate the insurance coverage that will be afforded to them as medical director. This includes consulting with their insurance carrier or the organization providing their professional liability insurance, disclosing all medical director positions and services to be provided and identifying any potential gaps in coverage. If there are identified gaps in coverage, physicians should negotiate with the organization to obtain the necessary coverage.

Consult with an Attorney

Physicians considering a medical director position, or who may currently be a medical director, should consult with experienced legal counsel to review and identify any legal/regulatory compliance and/or risk management concerns that may exist with the medical director position and ways to mitigate that risk (e.g., negotiating the medical director agreement, insurance coverage, policies and procedures to minimize risk, etc.).


This article originally appeared in the first quarter 2024 edition of the Detroit Medical News.


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