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Aaron J. Besen

Ask The Lawyer: Medical Director Duties

August 2013

Aaron J. Besen

Published in the Oregon Healthcare Association Heartbeat

Question:  What should be in a Medical Director Agreement? How can a Medical Director Agreement protect a facility?

Answer:  There are a number of key provisions that Medical Director Agreements should have. These concern (a) the duties of the medical director; (b) compensation; (c) the licensure, criminal history, and exclusion status of the medical director; and (d) insurance and indemnity.

Medical Director Duties:  The Medicare Conditions of Participation require skilled nursing facilities to have a medical director. Under these regulations, the medical director must coordinate medical care and provide clinical guidance and oversight of the facility's resident care policies. Compliance with these requirements is surveyed under F-tag 501. At a minimum, the Medical Director Agreement must require the medical director to provide these services. However, as we move into a time of greater coordination between nursing homes and hospitals, the medical director can also help facilitate the coordination and act as a community representative for the facility. Medical directors can also participate in a facility CQI program and can provide in-service education to facility employees.

Compensation:  In addition to the medical director's fee, the agreement should provide that this fee is distinct from the fees the medical director may receive in the capacity as a resident's attending physician.

Medical Director Qualifications:  The medical director must be a licensed physician. The medical director and any employees of the medical director must clear background checks and exclusion checks with regard to federal healthcare programs. The medical director should indemnify the facility for any economic loss the facility would suffer if the medical director looses his license or is excluded. This is important because these issues could affect Medicare reimbursement.

Insurance and Indemnity:  The agreement should include provisions concerning each party's insurance coverage. The agreement should also address indemnity provisions between the parties.

Medical Director Agreements must document the facility's compliance with the Conditions of Participation, but also need to be drafted to protect the facility from legal and economic exposure. These agreements should be reviewed by your attorney. 

Aaron Besen is a partner at Sussman Shank LLP (www.sussmanshank.com) and is the chair of the firm's Healthcare Department.  He has extensive experience representing long term care providers with regulatory, compliance, risk management strategy, and other business-related transactional matters.  He is a frequent presenter on long term care issues.  Each month the long term care team at Sussman Shank LLP will tackle a long term care question.  To submit a question, please send an email to gsanchez@sussmanshank.com.  All submissions are anonymous.

Please note that neither Aaron Besen nor Sussman Shank LLP is providing legal advice; the information provided above is for informational purposes only.  You should not rely on the information provided in this article and should consult an attorney with specific questions you may have about this subject.  Furthermore, the use of or receipt of this information does not create any attorney-client relationship whatsoever. 

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