Closing Medical Practice

Recently, physicians have faced new challenges in maintaining their practices, many closing their medical practices as a result. High malpractice insurance rates, regulations and difficulties collecting payment from patients and insurance companies have long plagued the medical community. This year, lockdowns and increased health risk to themselves and staff due to the Coronavirus has led to a flurry of new physician retirements.

But a physician cannot simply shutter his doors and disappear into the night; as the owner of the files, he carries a responsibility for patient records for many years after closing his medical practice as required by federal and state laws. He also has the burden of informing patients well in advance, offering them the opportunity to retrieve their records before the closure.

When a physician closes his practice, he must:

closing medical practice
  1. Notify Patients in Advance – The amount of advance notice needed depends on the patient/doctor relationship. A general practitioner has more frequent contact and involvement in the patient’s life, so should provide more notice than a surgeon whose contact is far less frequent. The physician should also consider whether the patient will require continuing care, as would be the case with a cancer patient or someone with a condition requiring ongoing treatment. Hospital physicians may require less notice if another similar specialty physician is on staff and capable of helping his patients.
  2. Public Notice – Requirements will vary by state. The physician may need to post a sign at the office, publish a notice in papers, or mail a letter by mail to patients.

Failing to follow certain protocols could result in lawsuits by patients and/or fines by the state.

For a checklist of actions to take prior to closing, please click here.

An informal agreement between a departing physician and one taking over patient responsibility could backfire if the responsible physician does not take proper measures to safeguard patient records. Ultimately, the physician is responsible for his patient files, their security as per HIPAA compliance standards and their availability to patients for years to come.

The previous practice must be provided with valid contact information for patient inquiries, audits, or payors.

Other Legal Ramifications

When the physician leaves one practice to join another, it is important to pay attention to noncompete clauses in effect with the group or facility placing limitations on the time period and geographical area where the physician can practice. Violations could result in future litigation. Specific conditions of noncompete agreements can vary; typically, in cases where a practice has been purchased, the noncompete clause is strictly enforced. In some states, physicians have the right to continued patient access for up to one year following departure. Having an attorney review your agreement to provide you with clear guidelines prior to creating conflict can spare your practice many headaches and additional legal fees.