Practice Tips

A myriad of circumstances may lead a physician to close their practice, such as retirement, personal illness, relocation, or a change in career. Providing notice to patients in a timely manner promotes continuity of patient care, avoids allegations of abandonment, and fulfills contractual and regulatory obligations. When feasible, begin planning your departure years in advance.

Departure Plan

Staff

• Inform staff at least three (3) months in advance of the anticipated closing date. The physician purchasing your practice may want to keep some of the staff members. Familiar staff members can help facilitate the transition of patients to the new provider/owner.
• Arrange staff interviews with the acquiring physician, if applicable. If the practice will be fully closed, arrange for an out-placement service to provide resources and assist staff in obtaining other employment.
• Provide staff a written agreement regarding any unused benefits they will receive, such as unused vacation and/or sick time or PTO.
• Ensure you fulfill all legal requirements related to any employment retirement plans.
• Determine your obligations in relation to your employees' health insurance coverage.

Notification of Patients

Consider the amount of time patients need to establish a relationship with another provider based on the location and availability of other similar practitioners in your geographic area, especially if there are no similar practitioners in the area and your patient will need to travel for needed care. Based on your assessment of time, ensure all active patients have been notified at least ninety (90) days in advance of the practice closure or your leave date.

• Notify patients by letter sent via first-class mail. Place a copy of the notification letter in each patient's medical record.
• Enclose a records release authorization form for patients currently undergoing treatment or who were seen at the practice within the past 2-3 years if the practice will be run by another provider. If the practice will be fully closing, enclose a records release authorization to all patients with directions on how to access in the future.
• Sixty (60) days prior to closing, complete formal referrals for the patients who require ongoing care and treatment and confirm acceptance.
• For complex or actively compromised patients, strongly consider initiating a “warm” handoff with the new provider by setting up doctor-to-doctor phone calls or other means to transfer information and care.

Insurance

Contact your liability insurance carrier to determine if you need to purchase tail insurance to protect you from a claim filed after you discontinue your practice.

• Inform each insurance company providing any form of coverage for the practice (e.g., facility, vehicles, and employees) of your plans.

Advertisement

• Publish an announcement in area newspapers serving your patient population.  Consider the use of social media in addition to print advertisements.  If you are a specialty physician with patients throughout your state, utilize periodicals that circulate statewide. Publish the announcement several times within a month. Include the following information:
  • Office closing date.
  • Last scheduled appointment date.
  • Process to request transfer of medical record (copy) to another physician.
  • Explanation of how a patient may obtain a copy of their medical record.

Key Entities to Notify

• State licensing board
• State and local medical societies
• Drug Enforcement Administration (DEA). Discard controlled drugs in accordance with DEA procedures and return your DEA license
• Hospitals
• Associates
• Medicare
• Medicaid
• Third-party payers and managed care organizations you are credentialed with
• Professional associations you belong to, such as the American Medical Association

Medical Record Authorization

A valid, signed authorization is necessary to provide a new physician with a copy of a patient's medical record. Obtain each patient's consent/authorization to allow colleagues in a group practice to assume care and access your patient's medical record unless already outlined in the group’s consent to treat (coverage). Do not release the original medical record; forward a copy of the complete chart to the new physician and retain the original (see next section for details). You may not withhold the medical record of a patient whose account has an outstanding balance.

If you are selling your practice's book of business, the ownership of the original records transfers to the buyer. The details of medical record ownership and responsibility should be detailed within a contract at the time of sale.

Medical Record Storage

Secure and protect the confidentiality of the records you retain. Storage options include archiving records, contracting with a storage firm, arranging for a custodian (physician, hospital), scanning into a read-only digital media, downloading to zip drive, backup tapes, or copying to microfilm. For practices with electronic health records, determine contractual arrangements with cloud-based or server-based systems to ensure future access. Determine what arrangements will be made when the contractual arrangement is no longer in effect. There must be a method of accessing the patient’s information during the retention period. This could result in a printed copy being generated and needing to be stored in the event access will somehow be disrupted or cease altogether. Safeguards must be put in place to deter data breaches as required by HIPAA and applicable state laws.

• Custodian arrangement of medical records:
  Include the following in a written agreement between the retiring physician and custodian.
  • Time period to maintain the records and destroy records (paper or electronic).
  • Confidential storage.
  • Indemnification provisions.
  • Process for patients to access records.
  • Process for originating physician to access records.
• Storage facility:
  Require the following when establishing a relationship with a firm to handle the storage of sensitive information:
  • A formal written contract outlining the mutual obligations of the storage firm and the physician.
  • A HIPAA business associate agreement with the storage firm. Perform due diligence to verify the contractor's ability to maintain the confidentiality of medical records and to limit access to appropriate persons.

Ensure that all documents are filed within the record before sending them to storage (examples: lab, radiology, and specialty notes).

Please reference our practice tip, Medical Record Retention Recommendations for Physician Office Practices and Hospitals, which provides guidance for adults and minor children.

Destruction of Medical Records

Review your state's retention requirements to determine if and when records can be purged. Some states require patient notification prior to destruction. (Please reference our practice tip, Medical Record Retention Recommendations for Physician Office Practices and Hospitals, which provides an overview of state-specific standards). A confidential destruction process must be used. Contact your local hospital, which may have the capacity to safely dispose of medical records, or contact an attorney to locate a secure record destruction service. HIPAA requires a business associate agreement when using a destruction service.

Additional Considerations

• Review all current contracts for notification requirements related to your change of status.
• Contact your attorney to assist with review and to ensure you comply with regulatory requirements.
• Destroy prescription pads and letterhead after your last appointment.
• Maintain an answering service for 60-90 days after you close to remind patients of your office closure and to direct them to appropriate care providers.

For a complete list of the above considerations, see the Closing Your Practice Worksheet.

References:

AAFP (2020). Starting, Closing, or Selling a Practice: Starting, Closing, or Selling a Practice | AAFP

Barnard, Esq., J., MacLean, Esq., A., & Sampson, IPDY, K. (2014). Physician's Guide to Closing A Practice.Maine Medical Association. DOI: Physician’s Guide To Closing A Practice (mainemed.com)

American Medical Association AMA (2018). 4 must-dos before physicians retire. (DOI: 4 must-dos before physicians retire | American Medical Association (ama-assn.org)