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Written by Reed Tinsley, CPA | November 8, 2016
In a search for more dollars many physicians, especially clients of mine, have entered in to a Medical Directorship arrangement with a hospital. After reading about and researching this area for my clients, here are several things hospitals and physicians should carefully consider when entering into such a contract:
- The business justification, commercial reasonableness, and necessity of the subject services should be discussed and documented. Typically, medical director services are required to facilitate efficient operations of the hospital and increase quality of care to better serve the community.
- The services outlined in the medical directorship agreement should match the services actually provided by the physician.
- There should be no unexplained overlap of medical director services provided by multiple physicians. If there are multiple physicians filling the same administrative role, the hospital should document why the overlap is necessary.
- Physicians should keep time sheets for the hours they spend providing medical director services.
- Physicians should not be billing, collecting, or performing procedural work during any hours logged under a medical directorship, because this could create a double payment.
- Physicians should bear the cost of any expense that directly benefits their practice, such as front office staff, rent, and equipment expenses.
- Payments made for medical directorships and/or benefits received (i.e., office staff) should be set at fair market value and should not be determined based on the value or volume of referrals.
