Risk Management Considerations if You’re Thinking of Serving as a Medical Director

Lately we have been receiving an increase in calls from psychiatrists considering serving in the role of medical director of clinics, office practices, and inpatient and outpatient programs. There are unique liability risks when both practicing in the role as psychiatrist and acting as a medical director. These are some of the issues to consider:

• Contractual considerations: Before considering whether to serve in the role of medical director, the agency/clinic likely will present you with a contract for terms of employment and how your role will be structured within the practice. Keep in mind that the contract is likely designed to protect the business and not necessarily you personally. Prior to signing and accepting the terms, you should consult and obtain advice from an attorney who has experience analyzing employment contracts for physicians. Once you sign the contract, it will likely be more difficult to alter your role, and there may be provisions within the contract that could impact you significantly.

• Supervision of staff and compliance with state regulations: As the medical director, you may likely be in the role of ultimate supervisor at the agency. You also may be the collaborating physician/supervising physician for other psychiatrists, nurse practitioners, or physician assistants. It is important to know what your responsibilities are both within your employment contract but also what your statutory obligations are within your state. Know whether you are expected to meet with those you supervise and be aware of who the clinic employs and what type of oversight they may require.

It is not uncommon for medical directors to be included in lawsuits if there is an adverse outcome involving a professional within the clinic even if the medical director had no direct involvement with the patient. However, whether there is liability for the alleged issue will depend on a number of factors.

• Ensuring that the clinic’s policies and procedures are in compliance with regulations and are adhered to: One of the first things you should do as medical director is review the clinic’s policies and procedures.

• Do they need to be updated?

• How often are they reviewed?

• Are they in compliance with state and federal laws?

• Do you have a designated person who reviews the policies and procedures on a specific timeframe or when there is a significant change in practice/state regulations?

• Recognizing situations in which your interests may diverge from the clinic’s interests: What should you do if things go awry? It is important to recognize when your interests differ from the clinic’s interests—for example, if you are uncomfortable with billing, administrative, or prescribing practices. If something occurs that is of concern, you should obtain legal or risk management advice on how to best address the situation. It is always advisable to obtain advice as soon as possible to avoid issues that could potentially impact your licensure or place you at risk for a lawsuit or board of medicine complaint. ■