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                                                                    EXHIBIT 10.4

                     BOARD OF DIRECTORS COMPENSATION PROGRAM
                     NON-EMPLOYEE DIRECTOR COMPENSATION PLAN

The following outlines the terms of the compensation plan for all non-employees
serving on the Board of Directors (the "Board") of Medaphis Corporation
("Medaphis"). The intent of this plan is to compensate these individuals fairly
for their talents and time spent on behalf of Medaphis.

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<CAPTION>
PAY ELEMENTS:
                                        
                               CASH COMPENSATION
<S>               <C>                                                           <C>
Board Fees

                  Annual Retainer:                                              $16,000.00

                  Board Meeting Fee:                                            $ 1,000.00
                  (per meeting attended)

Committee Fees

         (a)      Committee Chairman

                  Annual Retainer:                                              $ 2,000.00

                  Committee Meeting Fee:                                        $   750.00
                  (per meeting attended)

         (b)      Committee Member

                  Committee Meeting Fee:                                        $   650.00
                  (per meeting attended)

                               EQUITY COMPENSATION

Stock Options

                  Initial Grant:                                                    10,000 Shares
                  (upon first election or appointment)

                  Annual Grant:                                                      2,000 Shares
</TABLE>

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ADMINISTRATION:

         General. The Medaphis Human Resources Department will be responsible
for administering the plan. The Human Resources Department will act to ensure
timely payment of both the cash and equity pay elements of the plan according to
the guidelines set forth below and will monitor and control deferred
compensation under the plan pursuant to the Medaphis Corporation Non-Employee
Director Deferred Stock Credit Plan (the "Deferred Stock Credit Plan"). All
compensation will be calculated on the basis of a "Board Year," which is defined
as beginning with the Annual Meeting of the Board held each year immediately
following the Annual Meeting of Stockholders (generally during the month of
May), and ending on the day before the next Annual Meeting of the Board. The
plan is retroactive to May 19, 1997 for implementation purposes.

         Meeting Attendance. Meeting attendance is required for payment of the
associated fee. Attendance will be determined by the official minutes of the
meeting of the Board or committee, as recorded by the Secretary of the meeting
(typically, the Secretary of Medaphis). It will be the responsibility of the
Secretary of the meeting to ensure that the Medaphis Human Resources Department
has the information required to ensure accurate and timely payment of meeting
fees. A valid meeting for purposes of compensation can be held in person or by
means of conference telephone or similar communications equipment as long as the
necessary quorum is present; provided, however, that telephone meetings of
committee members held to conclude business of previously adjourned meetings and
of less than thirty (30) minutes in duration will be considered to be normal
contacts in the performance of duties as a Board member and will not be
compensable as committee meetings. No fee will be payable in connection with
Board or committee action taken by unanimous written consent in lieu of a
meeting.

         Cash Compensation. Cash compensation will be paid by check or direct
deposit, as requested by the Director, on a quarterly basis, no later than the
15th of the month following the end of the quarter in which the fees were
earned. No taxes will be withheld. Each Director will receive a Form 1099 at the
end of the calendar year for tax purposes.

         Equity Compensation. Equity compensation will be in the form of stock
options granted from the Medaphis Corporation Non-Employee Director Stock Option
Plan. Initial Grants will occur as of the date of first election or appointment
to the Board. Annual Grants will occur as of the date of the Annual Meeting of
the Board and will be for services rendered during the previous Board Year. Any
new Board member who joins Board service during a Board Year will receive a
prorated portion of the Annual Grant based on the number of months served in
that Board Year.

         Deferral of Compensation. The terms and conditions upon which cash
compensation may be deferred under the plan are set forth in the Deferred Stock
Credit Plan. Initial deferred compensation elections for new Directors must be
made within thirty (30) days of election or appointment to the Board. Deferred
compensation elections thereafter will be accepted once per year during the
thirty (30) days prior to the Annual Board Meeting and will be effective for the
coming year's compensation.

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