Taking on the Medical Director Role: Risk Management Considerations

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It is not uncommon to hear of psychiatrists taking on a medical directorship role while providing direct care to their own patients. Psychiatrists have many reasons for assuming this role; however, the passion to serve, loyalty to and a strong connection with an organization, and financial freedom are often cited as the main motivators.

While being a medical director is undoubtedly rewarding, there are aspects of the role that psychiatrists need to consider from a medical malpractice standpoint. It is imperative that psychiatrists understand the legal, regulatory, and professional liability coverage issues associated with being a medical director. Although the role of a treating psychiatrist and the role of a medical director both fundamentally require clinical training and competency, each role may differ. Psychiatrists performing a dual role may believe that the coverage from the existing professional liability insurance policy automatically extends to their role as a medical director without realizing that certain arrangements compound their liability exposures and therefore leave an unintended gap in coverage.

Furthermore, what it means to be a medical director and how to acceptably stay within the agreed-upon scope of responsibilities can be confusing and tricky to navigate. To decrease the risk of practicing outside of scope, psychiatrists need to understand the usual responsibilities of a medical director and take the time to thoroughly review the scope of responsibilities outlined in their specific contract.

A medical director’s typical responsibilities include administrative duties such as management of medical staff matters, development of organizational policies, oversight of clinical operations and compliance with regulatory requirements, and quality improvement activities. Depending on the arrangement, it may not be easy to discern that a medical director might also be held accountable for everything that happens in the facility.

If you are thinking about taking on a medical directorship role, here are some points for your consideration:

• Ensure you have insurance coverage for the dual role as a medical director and treating psychiatrist.

• Identify duties and responsibilities not covered under your basic professional liability coverage agreement to delineate the coverage necessary for the medical directorship role.

• Do not assume that your medical professional liability insurance policy covers your actions as a medical director. Notify your medical malpractice carrier if considering a medical directorship position to review possible changes in the current coverage.

• Confirm that the duties and responsibilities outlined in the contract are within your scope of practice and expertise.

• Delegate and oversee only those medical tasks and clinical operations that are consistent with your scope of practice and specialty.

• Verify that your contractual arrangements do not violate state or federal laws.

• Conduct proper due diligence by performing research on the facility’s quality rating, care standards, and performance before accepting the position.

• Ensure resources are available to adequately fulfill and execute your assigned duties and responsibilities.

Being a medical director is both an honor and a privilege. It gives psychiatrists the perfect opportunity to satisfy the passion for serving their patients while fulfilling civil community responsibilities. However, performing the dual role as a psychiatrist and a medical director requires due diligence to avoid needless risk and liability exposures. ■

^{This information is provided as a risk management resource for Allied World policyholders and should not be construed as legal or clinical advice. This material may not be reproduced or distributed without the express, written permission of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Risk management services are provided by or arranged through AWAC Services Company, a member company of Allied World. © 2023 Allied World Assurance Company Holdings, Ltd. All Rights Reserved.}

Gloria Umali, R.N., M.S., C.P.H.R.M., is assistant vice president of the Risk Management Group of AWAC Services Company, a member company of Allied World. Risk Management services are provided as an exclusive benefit to insureds of the APA-endorsed American Professional Agency Inc. liability insurance program.