There is a lot of media attention to “Baby Boomers” retiring with more than 10,000 leaving the workplace every day. Anyone closing a business has a list of items to address before selling the business or closing the doors, but there is a unique set of considerations when a physician practice owner elects to retire or stop providing service. A medical practice provides a needed service to patients and a community unlike other businesses. The Board of Medical Examiners in each state has rules, in which the physicians should notify the patients and transfer care timely without restricting the medical records needed to continue care.
I recently worked with a practice that was receiving calls from patients who were trying to find a new physician. A physician had left town and his patient records were in an electronic medical record, in which the patients had no access. These patients were suffering from chronic disease and receiving biologic treatment; the new practice trying to assist these patients would need the patient record to care for them.
If a physician plans to retire, leave town or sell his practice, he should contact an accountant or legal representative to assist in a plan. It is important to notify your local medical society of your plan to sell or close so they can assist you. If there is value in the practice, a valuation may be performed to facilitate a sale to the hospital or another physician or group. The value of a practice is determined by fair market value of accounts receivable, assets and other considerations. If a physician owner has fallen ill, the plan or timeline to work through a checklist could be limited.
Once a physician has chosen an advisor, a plan is prepared to sell or close the practice. A timeline of no less than six months should be set to notify patients and staff, transfer records and value the building and assets for sale. The practice should no longer accept new patients to the practice if it is closing. The patients must be notified in writing at least thirty days before closure and the practice must facilitate the transfer of medical records to a physician of the patient’s choosing. If another physician will “take over” the practice, a custodianship of medical record arrangement can release the physician owner of the responsibility of maintaining the paper or electronic charts. The patient must be notified who is responsible for the medical record should the patient decide to change providers after the physician is retired.
A checklist will provide guidance regarding the many notifications that must take place after the last date of service to patients. The accounts receivable are generally finalized in 60-90 days; insurance companies should be given a forwarding address for residual payments. Vendor contracts should be reviewed for “out clauses.” Insurance agents who cover the business should be notified along with state agencies. Business records, such as payroll records, tax records, etc. have retention guidelines you should follow.
Calling it quits is easier in other industries than healthcare. Physicians provide a service that includes a relationship and a valuable record to a patient; it is not to be taken lightly. If you are planning a change in ownership or retirement, reach out to an advisor for assistance.
Article contributed by Tammie Lunceford, Healthcare and Dental Consultant, Warren Averett Healthcare Consulting Group. Warren Averett is an official Gold Partner with the Medical Association.