The operator is risking capital. You are risking the license, and those two exposures do not resolve in the same forum, on the same timeline, or under the same rules. A malpractice claim settles with money and a signature. A board proceeding is about whether you may continue to practice, and no amount of the clinic’s money closes it.
That asymmetry is the whole subject, and it is almost never priced into a medical director agreement.
An indemnity does not reach a board
Read the indemnity clause in your agreement. It will say the company holds you harmless from claims arising out of the engagement. That is a promise about money, and it is worth exactly what the company is worth when the promise is called.
It does nothing about a licensing board, because the board is not making a claim against you that anyone can indemnify. It is exercising authority over your license. The company cannot answer for you, cannot accept the finding on your behalf, and cannot make the record go away. Neither can its insurer.
So the clause that most directors treat as their protection covers the risk they were least worried about.
The boards have already said what they think
This is not theoretical, and it is not new. States have been explicit about the figurehead arrangement.
- North Carolina has addressed the director who lends a name without exercising authority. We set that out in the straw medical director.
- Mississippi attaches counted obligations to collaborative practice, including chart review on a defined cycle. Counted duties are falsifiable duties. See the quarterly chart review.
- Alabama expresses supervision as a percentage of the delegate’s hours, which is either happening or it is not.
- Georgia caps how many advanced practice nurses one physician may cover, so the exposure grows with the clinic’s hiring rather than with your involvement.
The pattern across all of them is the same. The duty is personal, it is measurable, and the measurement does not care that you were not told.
What you are actually signing
A director agreement usually describes a relationship. What a board examines is a set of acts. The gap between those two documents is where directors get hurt.
| The agreement says | A board asks |
|---|---|
| “Provide medical direction” | Which protocols did you approve, and when? |
| “Be available for consultation” | Reachable within what time, and is there a record? |
| “Oversee clinical staff” | Which charts did you review, and on what schedule? |
| “Advise on compliance” | Did you know what was being injected, by whom? |
If the agreement does not convert each duty into something with a date on it, you cannot demonstrate you did it. Absence of proof is the usual finding.
Six things to negotiate before you sign
- Named duties with frequency and time. Not “oversight.” Chart review on a stated cycle, protocol approval with version dates, a defined response time when reached.
- Access to the records, unconditionally. A director who can be locked out of the chart system during a dispute cannot defend the period they were responsible for. Make access survive termination for a period.
- Authority to stop. In writing: you may suspend a treatment, a device or a staff member pending review, without the operator’s consent. Without it, your duty is real and your power is not.
- Notice and cooperation. The clinic tells you of any complaint, adverse event, or board contact within a stated period, and cooperates with your response afterwards.
- Your own counsel, not theirs. A board matter against you is not the company’s matter. Agree in advance who pays for your representation, and that the choice is yours.
- A defined exit. How you resign, how the patients and protocols are handed over, and what the clinic must stop doing the day you leave. See how to fire a medical director without shutting down the clinic, which is the same problem from the other side.
The clinic’s exposure grows faster than your fee
A clinic adds a service line, a device, a second location, another injector. Each addition enlarges what you are responsible for. Unless the agreement ties scope to something, your exposure expands on the operator’s decisions while your compensation sits where it was.
Tie the scope to a defined list of services, devices and locations, with a mechanism that requires your written approval to add to it. That single clause does more work than any indemnity in the document.
What this means for you
Treat the agreement as a description of what a board will one day ask you to evidence, because that is what it is. Convert every soft duty into a dated, recorded act, keep your own copy of the protocols you approved and the reviews you performed, and make sure access to the records survives the relationship ending badly. Then look at the fee against the scope, and re-look every time the clinic adds anything. The directors who get into trouble are rarely the ones who did nothing. They are the ones who did something, did not write it down, and could not prove it two years later. Our overview of the role itself is at medical director, and the distinction from other oversight roles is at medical director vs supervising vs collaborating physician.
Related reading
Frequently asked questions
Can a medical director lose their license over a clinic’s conduct?
A board acts against the individual licensee, so yes, the exposure runs to the person. States have addressed physicians who lent a name without exercising authority, and the duties boards examine, such as chart review cycles and supervision percentages, are personal and measurable.
Does the clinic’s indemnity protect me?
Not from a board. An indemnity is a promise about money, worth what the company is worth when it is called. A licensing proceeding is an exercise of authority over your license, which the company cannot answer for and its insurer cannot settle.
What should be in a medical director agreement?
Duties expressed with frequency and time rather than as general oversight, unconditional access to records that survives termination, written authority to stop a treatment or device, notice of complaints and adverse events, your own counsel for board matters, and a defined exit.
Why does scope creep matter so much?
Each new service line, device, location or injector enlarges what you are responsible for. Without a clause tying scope to a defined list and requiring your written approval to add to it, your exposure grows on the operator’s decisions while the fee stays where it was.
What does a board actually ask for?
Evidence of specific acts: which protocols you approved and when, which charts you reviewed and on what schedule, how quickly you could be reached and whether there is a record of it. Agreements that describe a relationship rather than dated acts leave nothing to produce.
This is general information, not legal advice. Rules vary by state and change. Confirm your own facts with counsel.