Liability of medical director role

Panacea Financial Contract Review
This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
R

ResidentAnonymous001

Learner of institutions.
2+ Year Member
Joined
May 20, 2021
Messages
21
Reaction score
8
Hello all,

I am curious if there is a substantial liability risk (being named in a lawsuit) in taking on a medical director position?

Appreciate any insight anyone can provide. 🙂
Members don't see this ad.
 
TexasPhysician said:
Substantial is subjective.
Liability risk = yes
Click to expand...
I'm thinking op means more cases than just a regular psychiatrist on staff as they may be mentioned in every lawsuit that happens by anyone that is under their directorship. I think that answer is yes
 
Members don't see this ad :)
these days "medical director" means anything from an empty title, to supervising a bunch of NPs, to renting out your license for other people to make money off you, to developing and leading a program with multiple psychiatrists, psychologists, SWers etc. The liability depends on what the role is and who you are employed by. If you are employed by the government, there usually isnt any liability due to immunity laws. If you are employed by a sketchy for profit, you might be on the hook for anything illegal you know about or should have known about. If supervising a gaggle of NPs, then that is where the liability is greatest.
 
I agree with others here that being medical director carries added liability risk. For example, see: Understanding the Risks Associated with Medical Directorships

As above, you need to clarify what specifically is required of you. You need to know local and national regulations and ensure compliance (including CARF, JCAHO where appropriate). If you treat the role as easy money and basically just chat with staff as needed, you are putting your license in their hands. Being medical director can be very worthwhile because you can improve quality of care and have a say in how a (good/receptive) program is run, but make sure you consider it an additional job and don't agree to carry the role out below the standard of care.
 
The specifics of the job do matter a great deal, but I would argue there is, IN GENERAL, less liability than say taking on a second staff physician job. I can conceptualize how a lawyer might try to rope a medical director into a lawsuit with some sort of policy or law that wasn't followed...but I just haven't seen it and the link above seems to really focus on SNFs and "medical spas" which hopefully none of us are being offered medical directorships of.
 
splik said:
these days "medical director" means anything from an empty title, to supervising a bunch of NPs, to renting out your license for other people to make money off you, to developing and leading a program with multiple psychiatrists, psychologists, SWers etc. The liability depends on what the role is and who you are employed by. If you are employed by the government, there usually isnt any liability due to immunity laws. If you are employed by a sketchy for profit, you might be on the hook for anything illegal you know about or should have known about. If supervising a gaggle of NPs, then that is where the liability is greatest.
Click to expand...
What type of liability would you say exists in this type of medical director role? Are their examples of MDs being sued for being the director of a program for problems occurring as a result of work done by psychiatrists, psychologists, or masters level therapists when not directly being supervised by the MD that is the director of the program? I don't review psychiatric work for any of our attending psychiatrists beyond a few chart reviews every 6 months and vacation coverage where I see their patients, I find it a bit hard to believe I would be on the hook for the work they do independently, but am certainly open to what people's actual experience has been with the legal system.
 
Merovinge said:
What type of liability would you say exists in this type of medical director role? Are their examples of MDs being sued for being the director of a program for problems occurring as a result of work done by psychiatrists, psychologists, or masters level therapists when not directly being supervised by the MD that is the director of the program? I don't review psychiatric work for any of our attending psychiatrists beyond a few chart reviews every 6 months and vacation coverage where I see their patients, I find it a bit hard to believe I would be on the hook for the work they do independently, but am certainly open to what people's actual experience has been with the legal system.
Click to expand...
The way malpractice claims work is EVERYONE is named in the original complaint, and then it is whittled down. So medical directors are pretty much always named. No one is interested in therapists or NPs etc, so as the names are whittled down it is much more likely that the medical director will continue to be named and the others dropped. There's a doctrine called "respondeat superior" which is latin for why go after the monkey when you can go after the organ grinder? The medical director is "captain of the ship" and is supposed to know what was going on. In order to get dropped from the case you might have to show that you couldn't have been expected to know what this person was up to.

Medical directors can also be sued for "negligent hiring" if they were involved in hiring a person who does something bad. Even if it is an independent practice state for NPs, if there is a medical director and the NP was doing things without much supervision (even if not legally required), the medical director will most likely be sued. It could be argued that you shouldn't have hired them in the first place, or should have known they couldn't function without additional supervision etc. And yes, I have reviewed cases in which it is alleged that the MD was negligent in supervising an NP.
 
I was a medical director. I got out of it. The owners/administration kept cutting corners here and there, against my strict orders not to do so. Sometimes I'd find out about things after the fact and told the organization several times such things weren't supposed to happen. A response of "okay sorry, it won't happen again," heard multiple times over the same problems? Only explanation now is incompetence or willfully ignoring me. It was the latter. How do I know? Cause after they replaced me they upright told the new director they wanted to do things like people who weren't medically stable that I was against taking in.
 
splik said:
The way malpractice claims work is EVERYONE is named in the original complaint, and then it is whittled down. So medical directors are pretty much always named. No one is interested in therapists or NPs etc, so as the names are whittled down it is much more likely that the medical director will continue to be named and the others dropped. There's a doctrine called "respondeat superior" which is latin for why go after the monkey when you can go after the organ grinder? The medical director is "captain of the ship" and is supposed to know what was going on. In order to get dropped from the case you might have to show that you couldn't have been expected to know what this person was up to.

Medical directors can also be sued for "negligent hiring" if they were involved in hiring a person who does something bad. Even if it is an independent practice state for NPs, if there is a medical director and the NP was doing things without much supervision (even if not legally required), the medical director will most likely be sued. It could be argued that you shouldn't have hired them in the first place, or should have known they couldn't function without additional supervision etc. And yes, I have reviewed cases in which it is alleged that the MD was negligent in supervising an NP.
Click to expand...
Thanks for replying. I do not supervise any NPs/mid levels, all of my staff are attending/board certified physicians. Of course it would be completely impossible to oversee every case and would seem highly unusual to me that there would be a legal expectation that a medical director review all cases an organization has (it would be literally impossible in many cases for larger organizations). If an attending has an adverse outcome at a different location than I work at, are you saying I could be held liable despite following all policy/procedure of the state and federal government regulatory bodies?
 
whopper said:
I was a medical director. I got out of it. The owners/administration kept cutting corners here and there, against my strict orders not to do so. Sometimes I'd find out about things after the fact and told the organization several times such things weren't supposed to happen. A response of "okay sorry, it won't happen again," heard multiple times over the same problems? Only explanation now is incompetence or willfully ignoring me. It was the latter. How do I know? Cause after they replaced me they upright told the new director they wanted to do things like people who weren't medically stable that I was against taking in.
Click to expand...
I would second this. You need to have an unhealthy but not pathological bit of paranoia to be a successful medical director. People do things which directly affect patient care without consulting or even mentioning it to you.
 
A reason why I allowed myself to take the risk in the first place was cause I had reason to believe the owners/administration actually gave a damn. That apparently might've been the problem. They gave too much of a damn. They wanted to take in EVERYONE including people that weren't medically stable and needed to be in a hospital and gave responses of "that's another person we could've helped." No we can't help every single person in the whole world who wants our services.

I gave criteria on such such as only bring in people from hospitals if they gave us the records and I or someone else with medical training could read the notes to see if they were stable. Each time I said no to an admission there'd be blowback that administrators were mad, the owner was mad or the person that refused to take the person in on my order was now in trouble. Then other BS happened like people I said couldn't come in were let in anyway and then guess what? We'd have to send them immediately to the hospital.
 
comp1 said:
The specifics of the job do matter a great deal, but I would argue there is, IN GENERAL, less liability than say taking on a second staff physician job. I can conceptualize how a lawyer might try to rope a medical director into a lawsuit with some sort of policy or law that wasn't followed...but I just haven't seen it and the link above seems to really focus on SNFs and "medical spas" which hopefully none of us are being offered medical directorships of.
Click to expand...
That is not accurate unfortunately, medical director is almost always named in malpractice cases.
 
Members don't see this ad :)
I've tried to find some literature about this, but I'm just not seeing a lot of lawsuits where a medical director who had no direct patient contact/clinical decision making was named in a malpractice claim. There are occasional massive billing fraud cases, but most searches seem to come up with insurance companies peddling their wares with vague warnings of need. It does seem relatively common in lawsuits that the attending provider named also happens to be the medical director of the facility. Of course psychiatry has much, much lower rates of malpractice torts than most other specialties as it is, so it's hard to say.
 
Last edited:
Merovinge said:
Thanks for replying. I do not supervise any NPs/mid levels, all of my staff are attending/board certified physicians. Of course it would be completely impossible to oversee every case and would seem highly unusual to me that there would be a legal expectation that a medical director review all cases an organization has (it would be literally impossible in many cases for larger organizations). If an attending has an adverse outcome at a different location than I work at, are you saying I could be held liable despite following all policy/procedure of the state and federal government regulatory bodies?
Click to expand...
Two things - one is you will almost certainly be named in any malpractice suit involved anyone under you (and technically you would be the supervisor for your staff psychiatrists). Would you be found liable? That is a separate matter. It would be about whether you knew or should have known something or whether you were negligent in your hiring, supervision, management or other duties.

Some scenarios:
- one of your psychiatrists sexually assaults a patient. You could be on the hook for negligent hiring especially if there are any unsavory details in the psychiatrists past.
- a patient dies by suicide on the inpatient unit. This is considered a never event and the hospital is definitely on the hook and possibly the medical director
- a psychiatrist quits and their patients are distributed amongst the remaining psychiatrists. During the transition, the patient dies by suicide. You would definitely be a target in a malpractice suit.

Of course, if you couldn't reasonably be expected to have been aware of something then you wouldn't be on the hook for it, but you have to remember in these cases plaintiff's attorney will usually be trying to argue that everyone is somehow negligent and if they have an expert testifying to that then that will be litigated. If the expert says that there isnt a case against the medical director then usually they'll be dropped from the suit. I'll also add that while there is additional liability with medical director duties, if you appropriately conducting your duties, this isn't something to lose sleep over.
 
comp1 said:
I've tried to find some literature about this, but I'm just not seeing a lot of lawsuits where a medical director who had no direct patient contact/clinical decision making was named in a malpractice claim. There are occasional massive billing fraud cases, but most searches seem to come up with insurance companies peddling their wares with vague warnings of need. It does seem relatively common in lawsuits that the attending provider named also happens to be the medical director of the facility. Of course psychiatry has much, much lower rates of malpractice torts than most other specialties as it is, so it's hard to say.
Click to expand...
You have to consider that 90% of cases settle, and the disclosures of those settlements are usually confidential. Of the 10% that proceed to trial, only 1 in 100 will have an appelate level opinion published, so unless a case makes into the press for some reason, we only have published data on 0.1% of cases. And those cases are highly skewed.
 
splik said:
Some scenarios:
- one of your psychiatrists sexually assaults a patient. You could be on the hook for negligent hiring especially if there are any unsavory details in the psychiatrists past.
- a patient dies by suicide on the inpatient unit. This is considered a never event and the hospital is definitely on the hook and possibly the medical director
- a psychiatrist quits and their patients are distributed amongst the remaining psychiatrists. During the transition, the patient dies by suicide. You would definitely be a target in a malpractice suit.
Click to expand...
Just curious, are these theoretical or do you know of real cases like these?
 
Do non-clinician healthcare administrators have the same liabilities or does having a MD/DO make us more susceptible? Also, do CMO roles have equal or greater liability compared to the medical director role?
 
ResidentAnonymous001 said:
Do non-clinician healthcare administrators have the same liabilities or does having a MD/DO make us more susceptible?
Click to expand...

Lolz!

Corporate directors and officers have a professional, fiduciary duty to make money for their stockholders. No one else. Period. They often get sued, sometimes successfully, for not making enough money for stockholders. Physicians have a professional duty to their patients, even if patients don't pay. That's all you need to know.
 
IMHO the only way you're going to get a straight answer, because it's not in usual medical academic curriculums, on this is a long discussion with someone whose done this role, is willing to teach, and talk about the ins and outs in detail. I don't see this happening. Aside that there aren't too many medical directors to begin with out there, this will take up a lot of time and they have no financial incentive to do something that will take possibly dozens of hours.

The next problem is in the private practice world I've seen less than 5% of doctors willing to teach. At most they have someone shadow them which is poor teaching. Most shadowing people I see fall asleep cause they're not actively learning. I said this before, I'm not against DOs. I empathize that they have to deal with BS but a model where most of the clinical experience is merely shadowing will not match a program where they are following residents and attendings in a university setting.

Another person that could possibly help is a lawyer who has experience with this thing but this is also few and far between and why would a lawyer in private practice want to slow themselves down by talking to you? Teaching you will take dozens of hours, and are you going to pay them? Even if you did pay them you likely won't know ahead of time if they're going to be a good teacher.

If you worked in an institution for an extended duration you might be able to pick up what the director in that specific institution does. E.g. I worked in a state hospital for over a year and after such time I felt that I had a decent idea of how to handle the role, add to that I was friends with 2 MDs in administrative positions and they talked openly about it.
 
Sorry for reviving this thread. But among those things that others mentioned, I'd like to add healthcare fraud. In case of a trial, you could face a range of accusations. They are listed here.
 
Last edited:
Medical director can mean a lot of different things. If you are a true medical director of a facility and have responsibility over the actions of medical professionals, there is definitely liability. For example, I am medical director of a geriatric psych hospital in which my primary duty is supervising the psych NPs- there is definite potential liability, and I am appropriately compensated for my duties.
On the other hand, if a doctor works (either as a private/1099 doc) at a big box shop that hands out multiple medical directorships ranging from $800-$1800 per month for things like IOP medical director, rtc medical director, adult medical director, child medical director, (and even some directorships for individual units), the liability is a lot less.
 
lioneljohn said:
Sorry for reviving this thread. But among those things that others mentioned, I'd like to add healthcare fraud. In case of a trial, you could face a range of accusations.
Click to expand...
I don't think this is very likely unless you were directly involved in the fraud. I was part-owner and Chief Medical officer of a healthcare company that owned several sleep labs, DME's (cpap/O2), and cardiopulmonary rehabs. The company went bankrupt due to shenanigans by the CEO and due to Medicare fraud at the rehabs. Neither myself (who was primarily involved with the sleep labs/DME) or the rehab medical director was ever implicated in the fraud.
 
michaelrack said:
I don't think this is very likely unless you were directly involved in the fraud. I was part-owner and Chief Medical officer of a healthcare company that owned several sleep labs, DME's (cpap/O2), and cardiopulmonary rehabs. The company went bankrupt due to shenanigans by the CEO and due to Medicare fraud at the rehabs. Neither myself (who was primarily involved with the sleep labs/DME) or the rehab medical director was ever implicated in the fraud.
Click to expand...

What kind of fraud?
 
In my experience...the medical director is not involved in much of the financial or business aspect of a hospital beyond any other physician. If you're accused of fraud...you did something very different.
 
True story: I spoke to a recruiter who asked me if I was interested in a medical director position. I said no. She proceeded to set up a call with someone who was ultimately looking for a medical director. Then, she emailed me job positions with a medical director role.

Interpret this as you will.
 
You must log in or register to reply here.
Top