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 in Virginia.
“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.
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
1. Decision: Sell Your Practice or Closing It Down
Physicians nearing retirement will have to decide whether they want to sell their practice, or their share of 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 Insurance Carrier
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 Patients’ Records
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 a copy.
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 Concerns
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.
The American 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 to do?
Retiring physicians have a wealth of options available to them:
- You can retire once and for all, and start working on your travel bucket list;
- You can take a completely different job, either inside or 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.
10. Understand 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 people.”
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.
Locums as a Retirement Strategy
Some physicians who want to remain active in the field decide to work temporary locum tenens jobs with contracts as short as daily shift work. Other physicians may choose to work 13-weeks out of the year or half a year. Locum tenens not only gives retiring physicians the opportunity to explore the country, but it also helps them ease into retirement on their own terms.
To learn more about locum tenens opportunities in your specialty, complete the form on the right of this page. An AMN Healthcare recruiter will contact you shortly to answer any of your questions about this great way to transition from a full-time practice to a different way of working and living.