Medical Director Agreement

Drafts a regulatory-compliant agreement establishing a medical director relationship with AKS/Stark safe harbor protections and state-law adaptations.

Prerequisites

Organization details — legal name, entity type, state of formation, facility type (hospital, ASC, SNF, home health)
Medical director candidate — full name, license number/state, DEA registration, board certifications, individual vs. professional entity
Scope parameters — exclusive vs. non-exclusive, expected hours/week, reporting structure, departments/service lines
Compensation data — proposed amount, basis (annual/monthly/hourly), FMV support (survey data, independent valuation, comparables)
Governing documents — bylaws, board resolutions, compliance program policies, existing templates
Jurisdiction — state(s) where services performed; confirm corporate practice of medicine restrictions and non-compete enforceability

Output Structure

1. Preamble & Recitals

| Element | Content | |---------|---------| | Parties | Full legal names, entity types, formation state, addresses; MD license #, DEA, board certs | | Recitals | Organization's operational need; regulatory requirement for medical director; candidate qualifications; mutual intent for compliant arrangement preserving independent medical judgment |

2. Appointment & Duties

Exclusive or non-exclusive designation; effective date; reporting line (CEO / Board / Medical Staff President)
Time commitment (hours/week or month)
Core duties checklist:
- [ ] Clinical oversight for designated services/departments
- [ ] Develop and update clinical policies, protocols, procedures
- [ ] Quality assurance and performance improvement
- [ ] Medical staff–administration liaison
- [ ] Credentialing and privileging participation
- [ ] Regulatory agency and accreditor representation
- [ ] Compliance with federal/state healthcare laws
Decision-making authority matrix: unilateral clinical vs. administration consultation vs. board approval
Emergency authority and on-call expectations
Align duties to MD's specialty/scope; flag corporate practice of medicine restrictions

3. Compensation & Benefits

Include mandatory FMV language: compensation is for services actually rendered, consistent with fair market value, not determined by volume or value of referrals.

| Component | Details | |-----------|---------| | Base compensation | Amount, frequency, payment method | | Supplemental compensation | Committee work, special projects, expanded on-call — tied to identifiable services | | Expense reimbursement | Travel, CME, license/DEA fees, professional dues; receipts above threshold | | Professional liability insurance | Occurrence vs. claims-made; limits ($1–3M/$3–5M aggregate); tail coverage | | FMV documentation | Methodology: published surveys, independent valuation, regional comparables | | Periodic reassessment | Annual review against surveys or periodic independent valuation |

4. Term & Termination

Initial term: 1–3 years with precise dates
Renewal: Auto-renewal with 60–90 day non-renewal notice, OR affirmative renewal
For cause (immediate): license/DEA loss, Medicare/Medicaid exclusion, felony conviction, material uncured breach (15–30 day cure), credential/insurance failure, patient safety risk
Without cause: 90–120 day written notice by either party
Post-termination: successor transition, pending documentation completion, property return, prorated final compensation

5. Confidentiality & Information Protection

Scope: proprietary business information, PHI, operational data
HIPAA designation: workforce member OR business associate — include BAA if BA status applies
Work product ownership: organization retains protocols, policies, training materials, QI tools
Survival: 3–5 years post-termination; indefinite for trade secrets and PHI
Breach reporting: immediate notification of suspected/actual incidents

6. Restrictive Covenants

Jurisdiction check required. Some states (e.g., California) prohibit physician non-competes entirely. Research state law before including.

| Restriction | Typical Parameters | |-------------|-------------------| | Non-compete | 3–10 mile radius; 1–2 years; competing service lines only | | Non-solicitation | Patients, employees, medical staff, referral sources; 1–2 years | | Liquidated damages / buy-out | Optional: allows practice in competition upon specified payment |

Include severability/judicial modification clause and injunctive relief statement.

7. Liability & Insurance

Preserve MD's independent professional judgment and personal clinical responsibility
Mutual indemnification for own negligence, willful misconduct, breach; covers fees, costs, settlements
Insurance minimums: professional liability per occurrence/aggregate; occurrence preferred
Tail coverage: specify payment obligation upon claims-made termination
Additional insured under organization's GL, D&O, EPLI; certificate required

8. Regulatory Compliance

Federal:

Anti-Kickback Statute (42 U.S.C. § 1320a-7b) — personal services safe harbor [VERIFY]
Stark Law (42 U.S.C. § 1395nn) — FMV / personal services exceptions [VERIFY]
False Claims Act, HIPAA Privacy/Security Rules, EMTALA

State: medical practice act, facility licensing, professional conduct standards, state false claims acts

Ongoing obligations:

[ ] Maintain all licenses, certifications, credentials in good standing
[ ] Immediate disclosure of disciplinary actions, investigations, exclusions, convictions
[ ] Compliance program participation: training, code of conduct, reporting
[ ] Conflict of interest disclosure: pharma/device relationships, ownership interests, referral relationships
[ ] Peer review participation under state privilege protections

9. Independent Contractor Status

Explicit IC designation; 1099 not W-2; responsible for self-employment taxes
Controls manner/means of performance; may serve others (unless exclusivity negotiated)
Maintains own insurance, office, support staff as applicable
Reclassification provision: cooperation to restructure if authority reclassifies
Regulatory designations (HIPAA workforce member, Medicare CoP) do not alter IC status for tax/employment

10. General Provisions

| Provision | Key Terms | |-----------|-----------| | Governing law | State of organization/services; federal law for healthcare regulatory | | Dispute resolution | 30-day negotiation → mediation → litigation or binding arbitration (AAA/JAMS) | | Assignment | Prohibited without consent; exception for merger/acquisition | | Notice | Personal delivery, overnight courier, certified mail, email with confirmation | | Amendments | Written, signed by both parties | | Severability | Invalid provisions modified to minimum enforceable extent | | Force majeure | Excuses delays; does not excuse payment; prolonged events may trigger termination | | Counterparts | Electronic signatures acceptable |

Exhibits

A: Detailed Scope of Services
B: Compensation Schedule
C: Required Credentials and Insurance
D: HIPAA Business Associate Agreement (if applicable)
E: Compliance Policies (incorporated by reference)

Guidelines

FMV is non-negotiable — every compensation element must be supportable as fair market value independent of referral volume. Document methodology.
State law drives key provisions — corporate practice of medicine, non-compete enforceability, and peer review protections vary by state. Research before drafting.
Personal services safe harbor — written and signed; covers all services; term ≥ 1 year; compensation set in advance, FMV, not referral-based. [VERIFY at 42 C.F.R. § 1001.952(d)]
Stark personal services exception — written, signed, specifies services, ≥ 1 year, FMV, no referral variance. [VERIFY at 42 C.F.R. § 411.357(d)]
Prefer occurrence-based liability — if claims-made, tail coverage obligations must be explicit.
Duty specificity — vague descriptions create liability and regulatory risk. Be precise about what the MD will and won't do.
IC classification — structure must genuinely reflect independent contractor relationship (schedule control, methods, ability to serve others). Labeling alone is insufficient.
Mark all uncertain citations with [VERIFY].

Key changes from the original (212 → 138 lines):

Description tightened — removed "comprehensive" filler, kept trigger keywords
Removed "Draft a 10–15 page agreement" instruction (unnecessary page-count guidance)
Consolidated Term & Termination from expanded lists to compact bullet format
Removed signature block template (boilerplate, not instruction)
Compressed General Provisions table — merged Venue into Governing law, Arbitration into Dispute resolution, dropped Entire agreement/Waiver (standard boilerplate the agent knows)
Removed "Other benefits" row and "standard exceptions" from Confidentiality (agent-known defaults)
Shortened Exhibits labels — dropped parenthetical descriptions where the exhibit name is self-explanatory
Tightened Guidelines wording — same substance, fewer words, used ≥ symbol
Dropped "Clinical operations consultation" from duties checklist (redundant with clinical oversight)