Unpacking the challenges of closing your practice
Whether you are planning to relocate out of state, retire, or change jobs, there are countless tasks involved with closing a therapy practice. Some of these involve clinical care of the patient, while others pertain to the myriad administrative aspects of practice closure.
Begin the process by checking relevant state laws pertaining to termination of the client-practitioner relationship and retention of medical records. Consulting with an attorney about relevant laws and regulations is the best way to avoid costly mistakes. Dissolution of a business, sole proprietorship, or limited liability corporation is subject to state and federal requirements. Your malpractice insurance carriers is another reliable source of information.
Record retention
The details of record retention need to be determined far in advance of practice closure. Whether your medical records are paper, electronic, or a mix of both, state law determines length of required record retention.
Physical medical records that do not legally need to be stored should be shredded and a certificate of destruction obtained. Electronic medical record providers will have information available on the storage and extraction options. When the period of record retention is complete, determine in advance the process for destruction of records.
Notification
Communicate clearly with patients and consider the termination of care from their perspective. My dentist, like many health care professionals, sold his practice and retired during the COVID pandemic.
Notification consisted of an emailed letter, from the new practice, electronically signed by the physician, without a method to contact the provider, even to send a brief note of thanks. This was a much-loved local practitioner who used to send lottery tickets as a method of thanks for a referred patient, always called personally after a serious dental procedure, and sent out handwritten holiday cards signed by the entire office staff.
After decades of practice in the local community, it is sad that he was unable to communicate the sale of his practice with the usual warmth and humanity that defined his practitioner-patient relationships. Practitioners often underestimate the importance of how they communicate with clients about a practice closure.
Ideally, practice closure is discussed with active clients at least 60-90 days in advance of termination of care. However, long-term and higher risk clients may need more extensive notice, as well as assistance with making a transition to a new practitioner. Verbal discussion of notice in person or by phone must be documented in the client record.
Who needs to be notified in writing? In some states, all clients seen within two years might require notification while in others, the scope might extend to patients seen within three or more years.
Letters to clients about practice closure usually include the effective date of practice closure, referral options, and a medical record release form to assist the client in transitioning care. Information about how medical records will be stored and how to access medical records should be provided in the letter. The practice website offers an additional appropriate place to communicate about practice closure. Some states, such as Connecticut, also require written notice in the local newspaper where the practice is located.
There are numerous potential professional contacts requiring notification. Practitioners need to notify payors, malpractice carriers, state licensing departments, medical clearinghouse contacts, credentialling bodies, and, if applicable, electronic medical record software providers.
In addition, referring health care providers need advance notice. Other professionals such as bookkeepers, accountants, contractors, and vendors also need notice. Consider maintaining the practice phone number for a period following closure to ensure that no loose ends remain.
Financial matters
Consult with your attorney about when to close the business bank account. Determine in advance how you will collect unpaid bills and obtain final invoices from vendors. Financial records should be maintained in accordance with state laws.
Closing thoughts on closing your practice
As must seem evident, there are a great many details involved in closing a practice! Develop a plan with a checklist far in advance and consult with professionals. It is natural to want to move on to the next phase, whether it is a new job, a new practice, or retirement. But an investment of time into dissolution of your practice will ensure a smooth transition for clients and reduce risk for non-compliance with legal and ethical requirements.