1 in 3 Medical Directors in Line for Bonus Pay

The IHS survey found that it is not uncommon for a hospital or other healthcare entity to provide a premium on the pay provided to an independent contractor for assuming a medical director role.

Stutelberg foresees hospitals employing more medical directors, particularly with specialty-based service lines, such as cardiology.  In some instances, hospitals may offer less money for each physician, but may have more medical directors in their systems, "like having medical directors on steroids, instead of paying one physician, I'm going to pay five or six, working actively," he says.

The survey results confirmed that 77% of organizations use formal contracts for their medical directors, with one year the most common length.  Stutelberg says IHS recommends that every medical director should have a contract that specifies qualifications, job duties, responsibilities and hours. 

One in four, (23%) of the hospitals surveyed do not maintain a time log for independent physicians or specify the number of hours that should be worked. As a result, the hospitals may be unable to prove that their compensation arrangement is reasonable and representative of fair market value, the survey states.

Hospitals should review their medical director contracts on an annual basis to determine if job duties are still appropriate or require changes, according to IHS.