Medical Director Liability Risk: More Than You Bargained For?

Clinicians frequently do not realize that medical director risk differs from patient care liability exposure. Since many medical directors do not provide direct patient care, in lawsuits they often face claims arising out of their administrative or supervisory duties.

Because the exposure is different, a medical director also likely needs different insurance products than the practitioner who is diagnosing and treating patients. Most traditional malpractice policies provide coverage for liability arising out of negligent treatment and diagnosis of patients. However, they may not cover negligence in the performance of purely administrative duties.

If you are considering a medical director role, or if you already have one, it is crucial that you understand the scope of your contractual responsibilities so you can realistically assess your risk and determine if you have additional coverage needs. To get you started, this article:

• • Discusses what duties a Medical Director might be expected to carry out, especially in long-term care or hospice settings;
    
    
  • Provides a hypothetical example of allegations a plaintiff’s attorney might assert against a medical director defendant in those settings; and
    
    
  • Offers risk management recommendations you should consider prior to accepting a medical director position.

Claims Against Medical Directors Generally Arise Out of Negligent Performance of Duties

While claims against medical directors vary from case to case, most fall into one general category - negligence in discharging the medical director’s duties. This is perhaps the most compelling reason why clinicians need to clearly understand their duties prior to accepting a medical director position.

The contract between the entity and the medical director should clearly delineate responsibilities. A facility’s policies and the medical director job description may specify duties as well. MICA’s Risk Team urges clinicians to consult a health care attorney experienced in transactional work before signing a contract. Part of the attorney’s role is to explain to the clinician client what the contract requires and the potential liability exposure. By retaining an attorney to represent you during negotiations, you can avoid agreeing to responsibilities you didn’t bargain for.

In addition, federal statutes also govern the duties of medical directors in long-term care, hospice, and other facilities. These regulations impose a broad scope of responsibility on medical directors.

• • For example, Medicare’s Conditions of Participation require hospices to designate a physician as a medical director to assume “responsibility for the medical component of the hospice's patient care program.”¹
    
    
  • Similarly, skilled nursing centers must meet certain regulatory requirements to participate in Medicare. This includes designating a medical director. The medical director is responsible for implementation of resident care policies and the coordination of medical care in the facility.²
    
    

CMS recently issued updated guidance to the state surveyors who monitor long-term care facilities for compliance with Medicare regulations. The guidance is instructive to clinicians wondering about specific medical director duties in the nursing home setting. CMS says that a medical director’s responsibilities must include:

• • Implementation of resident care policies, such as ensuring physicians and other practitioners adhere to facility policies on diagnosing and prescribing medications and intervening with a health care practitioner regarding medical care that is inconsistent with current professional standards of care;
    
    
  • Participation in the Quality Assessment and Assurance (QAA) committee or assign a designee to represent him/her;
    
    
  • Addressing issues related to the coordination of medical care and implementation of resident care policies identified through the facility’s quality assessment and assurance committee and other activities; and
    
    
  • Active involvement in the process of conducting the facility assessment.³

In the same guidance, CMS says the medical director’s duties should also include:

• • Administrative decisions including recommending, developing and approving facility policies related to resident care. Resident care includes the resident’s physical, mental and psychosocial well-being;
    
    
  • Ensuring the appropriateness and quality of medical care and medically related care;
    
    
  • Assisting in the development of educational programs for facility staff and other professionals;
    
    
  • Working with the facility’s clinical team to provide surveillance and develop policies to prevent the potential infection of residents;
    
    
  • Cooperating with facility staff to establish policies for assuring that the rights of individuals (residents, staff members, and community members) are respected;
    
    
  • Supporting and promoting person-directed care such as the formation of advance directives, end-of-life care, and provisions that enhance resident decision making, including choice regarding medical care options;
    
    
  • Identifying performance expectations and facilitating feedback to physicians and other health care practitioners regarding their performance and practices;
    
    
  • Discussing and intervening (as appropriate) with a health care practitioner regarding medical care that is inconsistent with current standards of care (e.g., physicians assigning new psychiatric diagnoses and/or prescribing psychotropic medications without following professional standards of practice); and
    
    
  • Assisting in developing systems to monitor the performance of the health care practitioners including mechanisms for communicating and resolving issues related to medical care and ensuring that other licensed practitioners who may perform physician-delegated tasks act within the regulatory requirements and within the scope of practice as defined by State law.⁴

CMS would likely assess penalties for regulatory non-compliance against the facility rather than the physician medical director. However, when an adverse outcome occurs arising out of patient care, plaintiff personal injury attorneys will use these statutes and surveyor guidance as the basis for a negligence lawsuit against both the facility and the medical director.

What Allegations Might Be Included in a Typical Plaintiff Complaint Against a Long-Term Care Facility Medical Director?

A typical plaintiff’s complaint might contain these types of allegations:

As medical director of the facility, Dr. Defendant was responsible for developing and implementing policies and procedures to ensure appropriate patient care. Dr. Defendant breached his/her duty of care by wrongfully, carelessly, and negligently:

• • Failing to develop and implement adequate policies and procedures governing patient care;
    
    
  • Failing to ensure that policies and procedures were properly prepared, enforced, and followed;
    
    
  • Failing to ensure that facility staff received appropriate training on the policies and procedures;
    
    
  • Failing to ensure that facility staff were adhering to the policies and procedures;
    
    
  • Failing to ensure the facility’s physicians were up to date with industry standards; and
    
    
  • Failing to intervene to prevent patient injury despite knowing that the resident’s attending physician was providing medical care that was inconsistent with current professional standards of care.

As a result of Dr. Defendant’s failures, plaintiff-patient received negligent care which caused her death.

What Does the MICA Risk Team Recommend Prior to Signing a Medical Director Contract?

Medical directors in a variety of settings have different risk exposure than treating physicians. This holds equally true for medical directors in hospice, long-term care, and other facility settings as well as for physician or APP medical directors supervising RNs in mobile IV practices or medical spas.

Before accepting a position as a medical director, the MICA Risk Team strongly recommends that clinicians:

• • Ensure they have an accurate and complete understanding of the position’s responsibilities;
    
    
  • Consult a health care attorney to explain applicable laws and rules governing the position;
    
    
  • Consult a health care attorney who can explain what the contract requires;
    
    
  • Consult a health care attorney to represent the clinician in contract negotiations; and
    
    
  • Confirm through their carrier or broker whether their current medical professional liability (MPL) policy provides coverage for such work. MICA members seeking specifics about their coverage should contact MICA Underwriting directly at 602-808-2111 if they don’t use a broker. Brokered MICA members should contact their broker to discuss coverage questions.

<sup>[1] 42 CFR 418.102(d)

[2] 42 CFR 483.70(g)(1)-(2)

[3] Centers for Medicare and Medicaid Services Directors, Quality, Safety & Oversight Group (QSOG) and Survey & Operations Group (SOG), Revised Long-Term Care (LTC) Surveyor Guidance: Significant revisions to enhance quality and oversight of the LTC survey process (QSO-25-14-NH) (March 10, 2025) at pp. 677-681 https://www.cms.gov/files/document/qso-25-14-nh.pdf#xd_co_f=YmUwNDRkOTMtZDQwMi00ZjgzLWFjOTctMWIyZjk5NzAwNzE1~

[4] Id. at p. 679</sup>