PART 2 OF 4: Defining Duties and Compensation

The terms that establish a real role and a defensible fee.

The two terms that matter most in a medical director agreement are what the director actually does and how the director is paid. These are also the terms regulators examine first, because together they show whether the arrangement is genuine. This part addresses how to define duties and compensation so the agreement holds up.

Specifying the duties

Vague duties are a warning sign. The agreement should describe the medical director's responsibilities specifically enough that the role is real and its performance can be verified. Clear duties protect both sides and demonstrate that the compensation is for actual work.

Common medical director duties

Depending on the setting, duties often include:

• Developing, reviewing, and overseeing clinical protocols and policies.
• Supervising clinical staff and overseeing quality of care.
• Ensuring compliance with clinical and regulatory standards.
• Training staff and participating in quality improvement.
• Serving as the clinical point of authority for the business.

Setting fair-market-value compensation

Compensation must reflect fair market value for the services actually provided, and nothing else. It should be set in advance, based on the time and work the role genuinely requires, and supported by a defensible basis. Compensation that looks high for the work involved, or that cannot be tied to real duties, invites the inference that it is paying for something other than the director's services.

What compensation must not do

The compensation must not be tied, directly or indirectly, to the volume or value of referrals the medical director generates or to other business the director brings. A fee that rises with referrals, or that is structured to reward them, is the core of what fraud-and-abuse law prohibits. The payment must stand entirely on the work performed.

Documenting the work

An agreement that specifies duties and fair compensation still needs the work to actually happen and be documented. Time logs, reports, meeting records, and other evidence that the medical director performed the duties are what prove, after the fact, that the arrangement was genuine. The documentation is as important as the agreement itself.

How West Coast Health Law Can Help

We help define medical director duties and set fair-market-value compensation supported by the documentation that demonstrates a legitimate arrangement.

West Coast Health Law offers a FREE consultation which you may schedule by clicking the button on our website.

This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws change and every arrangement is different; consult a qualified attorney about your specific situation.