Closing a Practice Doesn't End Patient Responsibilities

For most small business owners, closing up shop is relatively simple -- perhaps they take down their signs, get rid of inventory and turn the lights off. But for a health care practitioner closing a practice, the issues are more complex.

Documenting Changes

Whatever the circumstances surrounding the closing of a medical practice, there are legal responsibilities:

For employed physicians leaving a joint practice, the responsibilities concerning medical records should be explained in an employment contract and non-competition agreement.
For shareholders or partners, the responsibilities are spelled out in shareholder or partnership agreements.
Physicians who sell their practices generally have an Asset Purchase Agreement that states the value of the practice, which includes the value of components being acquired. This agreement also states what is being done with medical records.
When a physician dissolves a practice, an attorney generally drafts and files Articles of Dissolution with the state. (Some states give a different title to this document.)

You have a duty to preserve medical records and ensure your patients have access to them. There may even be liability issues after your death that must be addressed in your estate plan.

If you sell your practice, the buyer should agree in writing to store your patients' medical records for a specific period of time, ideally the length of your own legal responsibility for them.

If, however, you are retiring, or for some other reason, decide to dissolve your business, you must notify your patients in writing. You must also have a plan to keep the records and send copies as requested until the state statute expires.

Notification Letter

In general, you should send a letter to all active and inactive patients 90 days before the last date your practice is operating. This allows patients to find another doctor without disrupting their care and to have their records transferred.

Your letter should include:

The date the office will close.
Suggestions on how to locate another physician.
A statement urging the importance of continuing health care.
Notification that the records will be sent to the patient's new physician as soon as you receive written authorization.
An explanation that records are confidential and cannot be transferred without the patient's written authorization.

Estate Planning

When planning your estate, keep in mind that medical records are assets. Your obligations to patients don't end with your death.

The executor or administrator of your estate must preserve medical records because they can be crucial in protecting the estate from negligence claims. The records must generally be kept for the duration of your state's statute of limitations for medical malpractice -- unless patients are minors. In those cases, the records must be stored until the patients are 18 years old. Investigate whether your malpractice insurance covers you throughout that period.

Your estate should notify all current and former patients and tell them how long it will keep their records and how they can gain access to them. Get professional help to make sure you comply with these matters in your jurisdiction.