The medical director for an IOP or PHP: role, hours and contract

The short answer

An IOP or PHP medical director is a licensed physician who approves the program's medical policies, oversees medications and psychiatric care, handles medical questions at admission and medical emergencies, and backs the clinical team on payer reviews. Most outpatient programs contract the role part-time. The hours depend on the services you offer, not a fixed number: a program that refers medication care out needs far fewer hours than one that prescribes and keeps medications on site. Pay only for hours actually worked, under a written agreement at fair market value that your attorney has reviewed, with nothing tied to referrals.

What the medical director does

In the policy manuals we write for programs (and run our own program on), the medical director's duties are:

Area	What they do
Medical policies	Approve the medication, infection control, emergency and drug testing policies, and review them each year
Medications	Oversee orders, reconciliation and controlled-substance counts if medications are kept on site, and review every medication error
Admission questions	Decide when a client is medically stable for outpatient care or needs withdrawal management or a hospital first
Psychiatric services	Psychiatric evaluations and medication management directly, or supervision of the nurse practitioner who provides them
Medications for addiction treatment	Prescribe buprenorphine or naltrexone, or coordinate with the client's prescriber or opioid treatment program. Clients aren't turned away for taking these medications.
Utilization review	Take peer-to-peer calls with payer physicians when the counselor's request is questioned
Quality	Sit on the quarterly quality review with the program director and clinical director: incidents, medication errors, emergencies and the measures you track
Emergencies	Be reachable, or name a backup, for medical questions during program hours

The governing body appoints the medical director and reviews their performance each year, like the program director and clinical director. The medical director doesn't run the clinical program; the clinical director does. Our guide to IOP staffing requirements in Texas shows how the roles fit together.

Who can be the medical director

• A physician with a Texas license from the Texas Medical Board, verified on the board's lookup, and a DEA registration for your address if they'll prescribe controlled substances there.
• Look for addiction medicine or psychiatry experience. They'll be answering questions about withdrawal, co-occurring disorders and medications for opioid and alcohol use disorders, and talking to payer physicians who know those topics well.
• Check exclusions first: the OIG exclusion list, SAM.gov and the Texas HHS OIG list, before the agreement is signed and then every month.
• Nurse practitioners do much of the day-to-day work. A psychiatric NP can do evaluations and medication management in Texas under a prescriptive authority agreement with a physician (Texas Occupations Code chapter 157), and that physician is often the medical director. Whether an NP can hold the medical director title itself depends on your license rules, accreditor and payer contracts; check before you plan on it.

Texas has a strong corporate practice of medicine doctrine. Whether your program may employ a physician, or must contract with one, and how the physician is paid, are questions for your health-care attorney before anything is signed. See the planning step in how to start an IOP or PHP in Texas.

How many hours

We didn't find a Texas rule that sets a number of medical director hours for an outpatient SUD program, and payers and accreditors don't publish one either. Size the hours from the work. This worksheet shows how; the hours are an example for a program of about 20 clients, not a standard.

Task	How to estimate it	Example, per month
Policy review and sign-off	Heavy before opening, light after; the yearly review in one sitting	1 hour (more before opening)
Admission medical questions	Admissions a month × share needing a physician opinion × minutes each	2 hours
Psychiatric evaluations and follow-ups	Only if the physician does them instead of an NP; usually billed separately	0 (the NP does them)
NP supervision under the prescriptive authority agreement	Whatever the agreement and Texas rules require, plus chart review	2 to 3 hours
Peer-to-peer reviews	Denied or questioned authorizations a month × about half an hour each	1 hour
Quality review and medication errors	A quarterly meeting, spread over the months	1 hour
Medication oversight on site	Only if medications are stored or given at the program	0 (clients keep their own)

In this example, about 7 to 8 hours a month. Add a PHP track, on-site medications or physician-led psychiatric care and the number climbs quickly. Two rules hold at any size: write the expected hours and duties into the agreement, and pay only for hours the physician documents on a signed monthly time log.

The written agreement

A medical director agreement should read like a job description with a price. Your attorney drafts it; we help programs define the duties and the time log as part of the staffing work in the IOP / PHP Program Launch. It should include:

1. The duties, listed specifically, matching the table above for your program.
2. Expected hours and availability: on-site days, response time by phone, and a named backup physician.
3. Compensation set in advance at fair market value for the services, as an hourly rate or a fixed monthly fee for a defined amount of work. Never per admission, per referral, per client or a percentage of revenue.
4. A monthly time log the physician signs, listing the date, hours and task, kept with the payment records.
5. A term of at least one year, with termination terms. If the agreement ends early, don't sign a new one on different terms within the first year without asking your attorney.
6. Malpractice coverage for the duties, with the program as certificate holder.
7. Confidentiality: HIPAA and 42 CFR Part 2 duties, and a business associate agreement if your attorney decides the physician isn't part of your workforce.
8. Separate terms for separately billed care. If the physician also sees clients and bills for it, say who bills, under which NPI, and that the administrative fee doesn't pay for clinical visits or the other way around.
9. A fair market value file: how you set the rate, such as an independent valuation or survey data your attorney accepts, especially if the physician refers clients to you or you to them.

Kickback, Stark and EKRA cautions

A medical director is a physician the program pays who may also be in a position to send it clients or order tests. That's why the arrangement draws attention from regulators. Have your attorney review it against each of these:

Law	What it covers	Why it matters here
Federal Anti-Kickback Statute	Paying or receiving anything of value to induce referrals of business paid by federal health care programs (Medicare, Medicaid, TRICARE)	The safe harbor for personal services and management contracts (42 CFR 1001.952(d)) protects an arrangement that meets every element: written and signed, all services specified, at least a one-year term, compensation set in advance at fair market value and not tied to the volume or value of referrals.
Physician self-referral law (Stark)	A physician's referrals of Medicare patients for "designated health services," such as clinical laboratory tests, to an entity they have a financial relationship with, unless an exception fits	If your program bills Medicare for lab work or other designated health services the medical director orders, the agreement must fit a Stark exception. Stark doesn't depend on intent.
EKRA	Kickbacks for referrals to recovery homes, clinical treatment facilities and laboratories, for all payers, including commercial insurance	An arrangement can be clear of the Anti-Kickback Statute because no federal program pays and still fall under 18 U.S.C. 220. Its exceptions aren't the same as the Anti-Kickback safe harbors.
Texas Patient Solicitation Act	Paying for patient referrals in Texas, for all payers	Texas Occupations Code chapter 102 applies on top of the federal laws.

Red flags to raise with your attorney: pay that rises with admissions or census, a rate well above what other programs pay for the same hours, a "medical director" who works few documented hours but refers many clients, free space or staff given to a referring physician, and any lab arrangement where the physician or program gets something back. The HHS-OIG overview of the fraud and abuse laws is a plain-English starting point.

Telehealth coverage options

Programs outside the big cities often can't find a local addiction physician for a few hours a month. Common ways to cover the role:

Model	How it works	Watch for
Local physician, part-time	On site for a set block each month, by phone between visits	Backup coverage for vacations; documenting phone time
Remote medical director, local NP	The physician joins by video for evaluations, chart review and the quality meeting; a psychiatric NP sees clients in person under a prescriptive authority agreement	The physician needs a Texas license to treat Texas patients; the prescriptive authority agreement must meet Texas rules
Fully remote psychiatric care	The physician or NP sees clients by video while they're at the program or at home	Controlled-substance prescribing by telemedicine follows DEA rules, which have changed several times; check DEA Diversion Control for the current rule. A HIPAA-compliant platform with a BAA.
Psychiatry group contract	A group supplies the medical director and prescribers under one agreement	The same fair-market-value and referral analysis; who bills for visits

Whatever the model, staff on site still handle emergencies: 911, naloxone and someone trained to use it every hour the program is open. And check each payer contract for any requirement about physician involvement in your level of care before you choose a fully remote model. Opening a prescriber practice to fill this role? See the Prescriber Practice Launch and Cima EHR for nurse practitioners.

The medical director's credential file

• Texas Medical Board license printout, dated, rechecked at renewal
• DEA registration for the program's address, if prescribing there
• Board certification, CV, NPI and malpractice certificate
• OIG, SAM and Texas HHS OIG exclusion checks, monthly
• The signed agreement, the fair market value support, and the monthly time logs
• Prescriptive authority agreements with each NP they supervise, reviewed yearly
• If you're accredited: approved clinical privileges (our program renews them every two years) and orientation records

We build this file, and every other staff file, as part of the IOP / PHP Program Launch; the accreditation package adds the gap assessment, tracer practice and a mock survey for Joint Commission or CARF.

Peer-to-peer calls go better when the physician has the record in front of them. Our prior authorization guide covers how reviews and appeals work, and Cima EHR for IOP and PHP prompts the continued-stay review 5 days before an authorization ends.

Questions

Does an IOP need a medical director?

Plan on one. A licensed program needs physician oversight of medical policies, medications and emergencies, accreditors expect a named physician leader, and payers expect a physician for peer-to-peer reviews. Check the current 26 TAC 564 text and your payer contracts for the exact requirement for your level of care.

How much do you pay an IOP medical director?

Fair market value for the hours and duties, set in advance, usually as an hourly rate or a fixed monthly fee for a defined amount of work. We don't publish a number because rates vary by specialty, region and duties; your attorney may want an independent valuation. Never pay per admission or per referral.

Can the medical director refer clients to the program?

A physician can refer a patient who needs your level of care, but the agreement must not pay for or reward referrals in any way, and EKRA and the Texas Patient Solicitation Act apply to every payer. This is exactly the part of the arrangement your attorney should review.

Can a nurse practitioner be the medical director?

A psychiatric NP can do much of the clinical work under a prescriptive authority agreement with a physician. Whether the NP can hold the medical director role depends on your licensing rules, accreditor and payer contracts; many programs keep a physician in the role and the NP in the clinic.

Does a PHP need more medical director time than an IOP?

Usually, because PHP clients are more acute and spend more hours in the program, so more medical questions come up. Read each payer's PHP medical policy for physician requirements and size the hours from the worksheet above.

Already open? Consulting by the hour is $175 per hour, or book a free 30-minute call. If you're hiring associates and interns too, read hiring and supervising associates in Texas.

Sources

• 42 CFR 1001.952, Anti-Kickback Statute safe harbors: eCFR
• CMS, physician self-referral (Stark) law: cms.gov
• 18 U.S.C. 220, Eliminating Kickbacks in Recovery Act (EKRA): Cornell LII
• HHS-OIG, fraud and abuse laws for physicians: oig.hhs.gov; exclusion list: oig.hhs.gov
• Texas Occupations Code chapter 102 (patient solicitation) and chapter 157 (physician delegation and prescriptive authority): ch. 102, ch. 157
• Texas Medical Board: tmb.state.tx.us; DEA Diversion Control Division: deadiversion.usdoj.gov