PART 4 OF 4: Negotiating and Maintaining the Agreement

Getting the terms right and keeping the arrangement compliant over time.

A compliant medical director agreement is negotiated with care and maintained over its life, not signed and forgotten. Both the physician and the business have interests to protect, and the arrangement must stay genuine as circumstances change. This part addresses negotiating the agreement and keeping it sound.

Negotiating from each side

The physician and the business approach the agreement differently. The physician wants fair pay, defined and manageable duties, appropriate protections, and clarity about liability and time commitment. The business wants genuine oversight, value for its payment, and a compliant arrangement. A good agreement meets both sets of interests while satisfying the compliance rules that constrain them.

Key terms to negotiate

Beyond duties and compensation, the agreement should address:

• The term and how the agreement renews or ends.
• Termination rights and notice for both sides.
• The time commitment expected of the medical director.
• Liability, indemnification, and insurance responsibilities.
• Confidentiality and ownership of work product.
• Any restrictions, such as exclusivity or non-solicitation, scoped to California law.

Avoiding common pitfalls

Recurring mistakes undermine medical director arrangements: compensation set without a fair-market-value basis, duties that are never actually performed, agreements that lapse but continue in practice, and fees that drift toward rewarding referrals. Each of these converts a legitimate arrangement into an exposed one, and each is avoidable with attention.

Maintaining the arrangement

A medical director agreement should be kept current and genuinely performed. That means ensuring the duties are actually carried out and documented, renewing or updating the agreement rather than letting it lapse, revisiting compensation if the role changes, and confirming the arrangement still fits the compliance rules as laws and circumstances evolve.

When to involve counsel

Because these agreements carry real fraud-and-abuse exposure, they warrant legal review before signing and periodic review afterward, rather than reliance on a generic template. The cost of structuring and maintaining the arrangement correctly is small next to the cost of defending a non-compliant one.

How West Coast Health Law Can Help

We draft, negotiate, and review medical director agreements for both physicians and healthcare businesses, keeping the arrangement defensible from signing through its full term. If you are entering into or reviewing a medical director arrangement, we can help you structure it correctly.

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.