Is the Medical Director Contract worth it if the Cost of Malpractice Insurance is too High?

How much does Medical Director Malpractice Insurance cost is really the key issue. Physicians everywhere are finding opportunities to supplement their income… contracts for services provided to different entities ranging from medical spas, pathology labs, primary care clinics that need a medical supervisor or physician assistants practicing independently that need supervision and connection/association with a medical doctor.

I recall the example of a nephrologist who was hired to act as the medical director of a dialysis center.  The contract paid just over $500 per month and the insurance was on pace to cost just over $500 per month. This was at a time when the medical director contracts were probably under paying and the medical malpractice market for these directorships liability policies was not as evolved and, therefore, often resulted in minimum premiums of $5000 per year.

More Medical Director Work for less time and more money!

There are more contracts today and physicians are able to provide medical director services from their home offices allowing them to do more in less time and perhaps more efficiently.  Our agency has been able to work with some specialty insurance carriers so that we can provide a medical director professional liability policy often for less than $2500 per year.  This often includes more than one location so a physician can have up to five different medical director contracts and cover all of the exposure with one separate medical malpractice insurance policy.  Premiums are range from $1500 to 4000 per year.

Medical Group Managers Comment on Medical Director Services:

MGMA published an article about the typical Services provided by medical directors in one of their online newsletters in 2012.

The medical director job description acts as a comprehensive guide for medical malpractice insurance underwriters to develop premium and coverage.  Typical responsibilities could include:
•    Holds the senior medical administrative position
•    Responsible for details and activities related to the delivery of health  care and clinical services
•    Responsible for  cost management, utilization review, quality assurance, and medical protocol development
•    Oversees the physicians,
•    develops and sits on committees to outline  including the recruiting and credentialing processes
•    Reports to the physician CEO/president and/or to the governing body of the organization on the progress and performance of the organization
•    Attend board, committee, meetings etc.)
•    Develop and manage a budget, including presenting monthly financial reports to practice staff with the support of administration
•    Monitor quality and appropriateness of medical care
•    Provide guidance and leadership for performance guidelines
•    Develop policies and procedures
•    Manage strategic development
•    Oversee clinical peer review
•    Manage physician relations and/or representation
•    Handle clinical patient complaints
•    Address emergency issues
•    Support physician education
•    Manage community relations
•    Handle physician behavior and impairment issues

The medical group managers Association has for years and years been working diligently for the betterment of healthcare in general this list is an amazing example of their detailed diligence. The more you read through this list of duties and responsibilities compiled by MGMA, the more you realize that a medical liability policy is essential and that these medical directors are really asked to do a broad range services and perform wide range of functions.  

Financial Management Liability (D&O) policies

This list is also an important reminder that the entities for which our physicians are serving need to carry their own financial management liability policies as well as employment practices liability and their own professional liability insurance.  The medical director liability policies will cover the physician for administrative responsibilities and supervision of other physicians and healthcare providers.  These two levels of services are very common.  The next $2000 to $3000 in annual premium would be developed if there is some actual patient care required.  Regardless of the medical director responsibilities, you can clearly see that each one of these facilities has a large financial fiduciary obligation to its members, shareholders, stakeholders, and associates.   Temporary executive directors who serve the important positions of president, vice president, secretary and treasurer are making important financial decisions and without the directors and officers policy they are personally liable for allegations of mismanagement.

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