10 ‘Must Dos’ Before Closing Your Medical Practice
You’ve been mulling it over, and you’ve finally decided to retire—or at
least say goodbye to the business side of practicing medicine.
It’s time to close your medical practice.
Now that you’ve made the decision, it is important to allow yourself
plenty of time to get the process started, and follow some key steps to ensure
a trouble-free transition. Due to government regulations and other variables, physician
retirements tend to be fairly involved.
Debra Phairas, president of Practice and Liability Consultants, LLC, in
San Francisco, has advised many providers as they navigated the process of
closing a practice.
“I suggest they start planning for the closing of their practice at
least 90 to 120 days out,” said Phairas. “There’s a lot to do.”
Family practice physician S. Hughes Melton, MD, MBA, was diligent about
allowing plenty of time before he closed the medical practice he had operated
“It was a three-to-four-month process because I really wanted to try to
meet with all of my patients that I saw on a regular basis and tell them face
to face,” said Melton, who now serves as commissioner of the Virginia
Department of Behavioral Health & Developmental Services.
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If you’re planning to retire soon, here are some of the key steps
you’ll need to take:
Physician Retirement: 10
Key Steps in Closing a Medical Practice
You can retire once and for all, and start working on your travel bucket list;You can take a completely different job, either inside our outside of healthcare;You can volunteer at a clinic for the underserved, or participate in medical missions;You can work some assignments as a locum tenens physician,
part-time or full-time, choosing jobs close to home or traveling to locations where you can visit family or simply explore.
1. Decide if you’re selling your
practice or closing down.
Physicians nearing retirement will have to decide whether they want to
sell their practice, or their share of a practice, to another physician as they
prepare to exit.
“One of the best ways to navigate the transition is to bring the buyer
on as an associate physician for three to six months,” said healthcare
consultant Christopher K. Lee, MPH, who serves as clinical solutions marketing
manager at Family Health Centers of San Diego. “That way, patients will start
to know the new doctor. After that period, flip it so the buyer becomes the
main physician, and the seller becomes the associate working part-time.”
2. Consult your malpractice
Do this early in the process, as your malpractice carrier can instruct
you on how many days prior to closing your practice that you need to notify
your patients. “Generally, most carriers want them to notify patients between
30 and 45 days, but every malpractice carrier has their own decision about
them,” said Phairas. Your malpractice carrier can also give information about
tail coverage, which can allow an insured physician the option to extend
coverage after cancellation or termination of a claims-made policy.
3. Ask for help.
You don’t have to do this alone. Closing a medical practice is a huge
undertaking, so ask for help if you need it. Two useful resources to consider are your
local medical society and the National Society of
Certified Healthcare Business Consultants. Your state medical board may
also be able to answer some questions for you. Melton also recommended getting
good counsel, as he had worked with a lawyer who was the legal consultant for
his practice. “He was very helpful for walking us through the buyout and
evaluation and all that,” he said.
4. Notify your staff.
You’ll want your medical staff to hear the news from you, not from
someone else, so let them know when your plans are underway. You can help make
transitional plans for your staff, as well, whether you are selling the
practice to another physician or ceasing operations entirely.
5. Address the future of your
You can’t just toss your patients’ records in the recycling bin. Your
malpractice carrier will guide you in how long to retain your patients’ charts,
but 10 years or even longer is typical, noted Phairas. If you are selling your
practice (or share of a practice) to another physician, that physician can take
charge of them. Otherwise, you will have to designate someone else to be the
legal custodian of the records. Don’t forget: you can’t transfer medical
records to another doctor without a patient’s consent.
6. Notify your patients.
Send your patients a letter notifying them of your intent to close the
practice. Let them know where their records will be kept and who to contact for
7. Notify payers and suppliers.
Inform all your suppliers and all payers, including Medicare and
Medicaid if applicable, of your intent to close your practice.
8. Address other business
Some other business concerns may include notifying the management of
the building where your practice is located, giving cancellation notices for
utilities and ancillary services, notifying the DEA of your intent to close
your practice, processing your accounts receivables, determining what to do
with your office equipment, and so on.
Academy of Family Physicians’ Closing Your Practice Checklist has a detailed
list of such tasks to complete in the 30-60 day window before closure.
9. Plan your next steps.
Major transitions are always easier if you have a plan. Have you
thought beyond the first few months after you close your practice? What do you want
Retiring physicians have a wealth of options available to them:
10. Understand that retirement
is also an emotional transition.
Don’t be surprised if you feel a mix of emotions as you walk away from
your practice. You’ve invested a lot of time and energy in your work, and it’s
entirely possible you’ll experience a variety of emotions, ranging from
happiness to sadness to anxiety to acceptance.
That’s totally normal, according to Melton, who was also the AAFP’s 2011
Family Physician of the Year. “It will be emotionally less difficult if you
phase into it,” he suggested. “And that takes different forms for different
For Melton, that transitional phase included taking an occasional ER
shift and sometimes working to support a hospitalist team when they needed it.
The occasional clinical work and contact with other physicians helped ease his
sense of loss and helped him move forward.
“You have to give yourself permission and time to catch up to what
you’re becoming in your new role,” he said.
Closing Your Practice Checklist – PDF
Benefits of Locum Tenens Jobs for Retired (or Semi-retired) Physicians
Ways Part-time Physician Jobs Could Work for You
Planning for Locum Tenens Providers
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