Educational leave, sabbatical, parental leave, extended illness, and practice closure due to relocation, retirement, or better professional opportunities can all lead to the decision to leave a practice.
When thinking about this type of change, there are many issues to consider, including tangible and intangible assets, continuing patient care, and—in the case of retirement—the emotional aspects of leaving. The best way to prepare yourself for closing, selling, or handing over your practice is through planning.
When considering leaving your practice, there are four main issues you will want to address: your physical office space, records and contracts, professional relationships, and malpractice and tail coverage.
Preparing to Leave Your Office Space
The first issue in discontinuing practice is your physical office space. If you lease your space, you should review the terms of your lease for the specifics of termination or transfer of lease. If you own your space, consult with advisors to determine if the property will serve you better if it is maintained or sold. You will also need to contact both your accountant and attorney to identify the best plan for proceeding in a financially profitable way. You don’t want to be forced to sell to the first bidder at the lowest price, so timing is important.
Managing Records and Contracts
Issues related to the handling of medical records should be identified and managed at least six months prior to cessation of practice. You will need to obtain a copy of the state’s medical record laws and rules to identify how long and where you will need to maintain medical records. If you will be selling your practice, the records may simply go to the physician purchasing the practice. If you are not selling, ensure that the handling of records is secure. You will also need to identify how your administrative records should be handled. Verify how long you will need to store records relating to your malpractice policy, corporation/practice documents, liability policy, business records (billing slips, encounter forms, accounts receivable, remittance advices), bank records, employment records, tax records, and legal documents.
When looking at the contracts that bind your practice, you will need to enlist the help of your professional advisors. Your attorney and accountant can help you to pick apart all contracts and mitigate any potential problems. This includes the review of employment agreements, managed care contracts, insurance policies, and shareholders’ agreement if applicable. Review these closely, and pay attention to advance notice provisions, noncompete covenants, and statements regarding accounts receivables and disbursement of final pay. These documents will detail what you have promised to do and the practice’s obligations toward you. The advance notice provisions will help you to establish your departure timeline and keep you in compliance with the requirements of the contracting managed care organizations.