Every month a medical director at a community hospital receives a stipend for chairing the quality committee, and every month finance pays it on schedule because the agreement is signed and an FMV opinion sits in the file backing the rate. For years nobody gives it a second thought, until someone from compliance or outside counsel asks a simple question: what did the physician actually do in March, and how does that match what the contract says they were paid to do?
That's usually when the room goes quiet. Most organizations build physician compensation compliance around the front end of the arrangement, the drafting and the valuation, and assume the back end will take care of itself. But proof that the services were delivered is where directorship cases get decided, and it's the piece most files are missing.
Two directorship actions landed within a week of each other.
On January 16, DOJ intervened in a False Claims Act case against Priority Hospital Group, three of its long-term care hospitals and a physician. According to the complaint as summarized by Barnes & Thornburg, one hospital paid the physician more than $450,000 between 2017 and 2022 under three medical director agreements. The government says the payments were meant to induce referrals.
The documentation allegations are the part worth reading twice. The agreements required timesheets. The complaint alleges the physician did not keep them, hospital staff filled them out instead and every one showed exactly 20 hours a month. It also alleges he typically spent two to two and a half hours on site on rotation days, while pay stayed fixed.
Six days later, Traditions Health agreed to pay $34 million after self-disclosing. Part of that settlement covers remuneration paid from 2019 to 2024 to physician medical directors in Oklahoma and Texas who referred patients for home health services.
Both matters are allegations, with no determination of liability. The pattern is still clear. The government looks past the signed agreement and asks what the physician did for the money.
These cases did not land in a quiet year. DOJ reported record False Claims Act recoveries for fiscal 2025, and healthcare drove most of the jump.
Image 1 · U.S. Department of Justice FY2025 FCA statistics; FY2024 figures via Becker's
Whistleblowers also filed a record 1,297 qui tam suits in FY2025. Directorship arrangements are an easy target for relators because the gap between what the contract says and what happened is often visible to people inside the organization.
Most hospitals that pay medical directors have done the front-end work. The agreement is signed, the duties are listed and a valuation firm has blessed the rate. Those steps matter, and the Priority complaint does fault the hospital for skipping a formal FMV analysis.
A clean FMV file still does not answer the question investigators ask next. Stark exceptions and AKS safe harbors assume the services are real, necessary and actually furnished. An FMV opinion prices the work. It cannot tell you the work happened.
That is why the timesheet allegations sting. An organization can have a sound agreement and a defensible rate and still lose the argument if its only proof of services is a stack of identical monthly logs.
Most directorship agreements already require timesheets. The problem is where those timesheets live. A spreadsheet or paper form sits apart from the agreement, so nothing checks an entry against the duties it is supposed to prove.
That gap shows up in predictable ways. Physicians fill in a month at a time from memory. Administrators fill in the form so payment is not held up. Hours land on the same round number every month because that is what the contract says, not what happened.
Physician contract compliance software fixes this by removing the distance between the log and the agreement. When an entry can only be recorded against a contracted duty, a log stops being a formality and becomes evidence.
Evidence that holds up has three traits. It is captured when the work happens, not reconstructed at month end. It is tied to a specific duty in the agreement. And it flows into payment, so nobody gets paid for hours that were never logged.
Physician Time & Effort Tracking in Ntracts is built around those three traits. Physicians log time from their desktop as they work. Each entry attaches to a duty pulled from the executed agreement, so a quality committee meeting logs against the quality committee duty. Compliance sees entries next to the contract terms, and payment review starts from what was logged rather than what was budgeted.
That difference is what separates physician time tracking software from a timesheet with a login. Most physician contract management software stores the agreement and tracks renewal dates. It does not produce the record that shows the services took place.
The contract side matters too. In Ntracts, Stark compliance logic is built into the medical director contract type, so required elements like a signed writing, a defined term and set compensation are part of the template. A general CLM treats a directorship like any other vendor agreement and leaves those checks to memory.
An acquisition hands you every directorship the seller signed, along with however the seller kept track of them. Sometimes that is a shared drive of PDFs. Sometimes it is a spreadsheet one administrator maintained. Often the time logs live in a different place from the agreements, if they exist at all.
Depending on how the deal was structured, exposure for past payments may come with the purchase. Future payments are yours either way. Once the stipends run through your payroll, the question of what the physician did for the money is yours to answer.
That makes the first 90 days a good moment to fold inherited arrangements into one physician contract management process. Treat it the way you treat physician onboarding for new hires: load each agreement, map its duties and start capturing time against them before the next payment cycle. The goal is a record you would be comfortable producing, starting from day one of ownership.
Run these against your current arrangements, inherited ones first.
A no on any of these is a documentation gap, the same kind the Priority complaint points to.
Contract lifecycle management software built for healthcare stores physician agreements, tracks terms and renewals and flags compliance requirements. For directorships and other service arrangements, look for tools that also capture time and effort against the contracted duties, since that record is what supports payment.
It records the hours and activities physicians spend on administrative or contracted services. The useful kind ties each entry to a specific duty in the agreement, so the log doubles as evidence the services were furnished.
No. FMV supports the rate. Stark exceptions and AKS safe harbors also depend on the services being necessary and actually performed, which requires separate documentation.
Compensation tools calculate what a physician is owed. Time and effort tracking documents what the physician did. Pairing the two lets payment follow logged services instead of a fixed schedule.