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Medical Directorships – Compensation and Coverage Concerns

Thursday, June 18, 2015

Medical Directorships are an extremely important and prestigious part of our health care delivery system.  However, physicians can find themselves in unhealthy situations regarding malpractice coverage and compensation arrangements.

Insurance Coverage

Many physician malpractice policies specifically exclude coverage for medical director positions at “non-owned” facilities.  The reason for the exclusion is that this is perceived as an administrative errors and omissions type of coverage, not a malpractice exposure.

A typical situation would be where one of your physicians is assuming the role of a Medical Director at a surgi-center; one where the physician or practice does not have an ownership interest.  The correct place to find coverage is under the Surgi-Center policy…not the physician policy.   Some of these outpatient centers have policies which automatically provide coverage, some require you to be specifically named, and some do not address the coverage at all.


In a recent Office of Inspector General memo, the OIG outlined specific concerns regarding compensation of Medical Directors.  While compensation arrangements have long been under the scrutiny of the OIG, in this case there were 12 physicians prosecuted for violations of the anti-kickback statutes and subject to liability under the Civil Monetary Penalties Law. 

It is prudent to have an insurance broker and attorney with specialization in Healthcare Law review any type of compensation arrangement…especially if it involves remuneration for a Medical Directorship.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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