Closing a Medical Practice, Part 1

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As the healthcare market witnesses a rise in consolidation, many small medical practices are closing their doors. Whether the physician is retiring, moving, or joining a larger system, closing a practice can be a much larger hassle than most physicians expect. Closing a medical practice involves several steps, including, but not limited to: notifying patients of the intention to retire, making decisions about insurance policies, selling or winding down the medical practice, and fulfilling record keeping responsibilities.

Licensure Board notification. If a physician is retiring and plans to become inactive, they must notify the Composite Medical Board of their intent to do so. The Board does not require physicians to notify them when they retire or close a practice; however, physicians who wish to become inactive must submit a form requesting inactive status. Physicians who are simply leaving a practice or moving have no obligation to inform the Board of their move.

Patient notification. When closing a practice, and thereby ending their physician-patient relationships, a physician must take appropriate steps to avoid claims of “patient abandonment.” Abandonment is defined as the termination of a professional relationship between physician and patient at an unreasonable time and without giving the patient the chance to find an equally qualified replacement. By not ensuring proper procedures are taken, a physician may risk investigation by the Composite Medical Board if a complaint is filed.

While physicians may have no obligation to inform the Board of their move, they do have an obligation to their patients. Failure to provide continuity of care can result in an allegation of patient abandonment. Continuity of care is a patient right and a physician’s legal and ethical duty. Therefore, a physician must notify their patients of their intent to retire, close their practice, or move so that the patients will have adequate time to find another physician. It is appropriate to refer them to another physician, their health plan, or a referral service. In addition to notification by certified mail, many physicians may need to place a notice at the practice and in your local newspaper to inform their patients (and others).

Employee notification. Beyond patients, physicians who are closing their practice must also notify their employees and review their obligations to them concerning vacation time, sick pay, insurance benefits, pension plans, and other benefits. The time and manner of notifying employees of intent to close a practice is an individual consideration that will vary from practice to practice and may depend upon the employment contracts that physicians have with their employees. Physicians must review existing employment contracts (or have them reviewed by an attorney) to ensure that they are meeting all of their contractual obligations, including notice requirements for terminating the contract. A physician should be sure to make arrangements for adequate help until the process of winding down the practice is completed.

DEA notification. A physician must notify the U.S. Drug Enforcement Administration (DEA) about their intent to close their practice, and arrange for the disposal or transfer of controlled substances with this agency. If a physician is retiring and no longer wishes to maintain an active DEA number, they must notify the DEA and request that their DEA number be deleted from the DEA system. This notification can be made by sending a letter to the DEA or by making a “non-renewal due to retirement” notation on their DEA renewal form (if the renewal form is due around the time they intend to retire).

Stay tuned for more important steps to take when closing a medical practice, including how to handle patients’ medical records. Closing a practice can not only be drawn out and tedious, it can also be complicated and confusing. A physician should always seek legal counsel if they are struggling to close their practice.

If you have questions regarding this blog post or have any questions regarding closing your medical practice  you may contact us at (404) 685-1662 (Atlanta office), (706) 722-7886 (Augusta office), or info@hamillittle.com.

*Disclaimer: Thoughts shared here do not constitute legal advice.

 

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