Physicians often are Medical Directors of surgery centers, nursing homes, hospital divisions and the like. Sometimes these positions come with a small stipend. Sometimes they are attractive because the title is prestigious. However, with the small stipend and prestige come significant exposures to liabilities that often are not covered by physician medical malpractice insurance policies.
Physicians that are Medical Directors at hospitals are involved in credentialing and establishing practice protocols. At surgery centers and nursing homes, Medical Directors can have responsibilities for patient care, credentialing, setting protocols and the hiring and firing of ancillaries. Even if those responsibilities are not specifically enumerated in the agreement between the physician and the institution, they may be implied from the “Medical Director” title. The Medical Director can be exposed to potential claims from disgruntled patients, employees and even their employers.
Credentialing, while not a professional liability exposure is covered by most physician medical malpractice insurance policies. Patient care is usually covered unless there is a specific exclusion. Setting protocols, hiring and firing are not medical professional liability exposures and ordinarily are not covered.
In a recent lawsuit, a surgical group with its own, separately incorporated outpatient surgery center, had an adverse outcome. One of the group’s members, who was not involved in this patient’s care, but was the Medical Director of the corporation, was named in the lawsuit solely in his capacity as Medical Director. The physician/Medical Director’s professional liability insurance company declined coverage because it contended the Medical Director position was not covered by its policy. The case including the Medical Director’s liability was settled for $4,000,000. So how does one protect against Medical Director exposures? The simple answer is not to accept any such titles. Unfortunately, that is not always possible or even desirable. Some states require that certain facilities have “Medical Directors.” A surgery center, like the one mentioned above, may be required to have a Medical Director and the physicians are not going to search outside the group to fill this position. Also, many physicians desire the prestige or compensation that comes with the title. For those who cannot or do not want to refuse the title, they must assure that this exposure is covered either by a malpractice insurance policy that includes protection for these exposures or a “Directors and Officers” policy.
Physicians should fully disclose all Medical Director positions to the company that provides their medical malpractice insurance coverage and secure a written determination from the company as to whether these positions are covered for services that involve both patient and nonpatient care. Ordinarily the malpractice insurance company will cover the patient services but will exclude the Medical Director services. If these services are excluded, one may be able to negotiate with the company to have this coverage added, preferably for free, but if not, possibly at an additional premium. The larger the insured medical group, the more likely that this can be added to the existing policy at little or no extra cost.
It is best to have the Medical Director exposure covered within one’s own medical malpractice policy because this reduces the likelihood of gaps in coverage that can occur when more than one policy provides coverage. If coverage cannot be secured through one’s own malpractice insurance policy, one should seek out the coverage either through a policy provided by the entity for which he or she is Medical Director or through a personal Directors and Officers policy.