If you have ever been asked to serve as a Medical Director, there are several helpful things to know as it relates to your professional liability insurance protection.  Often there is confusion between the physician serving as the Medical Director, and the Entity for which Medical Director services are provided, as to where coverage for the Medical Director actually lies.  To help avoid confusion between all parties, or more importantly, an uncovered claim, we suggest the following points be addressed:   

(1)    What does the employment agreement between the physician acting as Medical Director and the Entity state?  Who is the responsible party for securing the correct type and adequate limit of professional liability insurance for the Medical Director? If this is not outlined in the employment agreement, it should be.  If an employment agreement does not exist, we encourage at a minimum, a letter of understanding that outlines the responsibilities and duties of the involved parties.  The responsibility of securing insurance for the Medical Director needs to be assigned to a specific party.

(2)    "The employment agreement specifically states that the Entity is responsible for securing the correct type and adequate limit of professional liability insurance to cover our Medical Director."  In this scenario, the Entity needs to review their existing policy to specifically determine if the policy affords coverage for the Medical Director.  Most Entity policies do not provide automatic coverage for the Medical Director.  It must be endorsed onto the existing policy, or it must be specifically added at the time the policy is written.  If the Entity's insurance company does not provide coverage for Medical Directors (even upon request), then a separate Medical Director policy must be purchased.  Be mindful that just because the Entity has a professional liability policy, that does not necessarily mean that the policy covers the duties of the Medical Director.  The Medical Director has every right to request proof of coverage that specifically addresses or outlines how the Medical Director is covered. 

(3)    "The employment agreement specifically states that the physician acting as Medical Director is responsible for securing the correct type and adequate limit of professional liability insurance to cover the Medical Director's duties."  In this scenario, the physician acting as the Medical Director has a couple of options.  First, the physician can ask the Entity to check with its insurance company to see if a Medical Director endorsement is available and can be added, thus extending coverage for the duties and services the Medical Director provides.  The physician may be asked to reimburse the Entity for any added premium expense. Second, the physician can check with his/her private practice medical malpractice insurer.  More often than not, standard professional liability physician policies do not provide coverage for any Medical Director duties the physician may undertake.  In fact, Medical Director duties are often excluded from the physician's policy.  The physician can check with his/her agent or insurance company and request that coverage for Medical Director duties be added to the physician policy.  If the duties being performed by the physician acting as Medical Director are within the scope of his/her medical specialty, the insurance company may be willing to extend coverage for the Medical Director duties.  If neither option already mentioned is available, then the physician must seek a separate Medical Director policy. 

(4)    Is the insurance that is currently in place for the Medical Director the right kind?  Regardless of which party is responsible for securing Medical Director coverage, the next question that should be asked is "do I have the right kind of Medical Director coverage?"  Duties of Medical Directors' differ from facility to facility.  However, the two most common division of duties are (1) administrative duties and (2) direct patient care duties.  Whether the Medical Director has only administrative duties, only direct patient care duties, or a combination of both, the Entity and the Medical Director need to be sure that the coverage provided covers the actual duties of the Medical Director.  Some insurance companies will provide coverage for a Medical Director, but only for administrative duties.  If you are asked to be a Medical Director that sees patients, this coverage does not adequately protect you.  Likewise, some insurance companies will only provide coverage for the Medical Director's direct patient care duties, but not for any administrative duties.  The duties of the Medical Director need to be clearly defined and in turn, clearly communicated to the insurance representative responsible for providing the proper protection.