Retirement Countdown: A Roadmap

Winding down a medical practice need not be an anxiety-provoking process for a retiring physician. If he or she practices within a group, this process has probably already been addressed on some level. But what about doctors who are in a solo practice? How should they best accomplish a graceful exit? In an article in American Medical News, Karen Schecter addresses some key points to keep in mind.

Step 1: Present a Timeline to the Staff

First notify the staff by presenting a timeline. It is recommended that you give employees at least 90 days notice. Understand that at the first mention of a physician’s retirement, some employees may become skittish and tender their resignations. You may want to preempt this by offering some bonuses or severance packages to those employees who stay.

Step 2: Give Patients Notice

Patients will also need to be given notice. Ideally this should be in writing, via registered mail, and should include a medical records release form. A copy of this should then be placed in the patient’s chart. Remember also that patient records should be maintained for at least seven years for adults and, in most states, past the age of 21 for children. It is perfectly acceptable to scan their records and store them in a digital format.

Step 3: Notify Others in Writing

Written notification must also be given to other insurance companies, health plans, hospitals, and any other licensing agencies or professional organizations.

Step 4: Do You Need Tail Coverage?

After retirement, you will still have malpractice exposure for some period of time. It is important to speak with your professional liability insurance agent to get a clear understanding of coverage. In most cases you will simply cancel your policy at the time of retirement. With an occurrence policy, no further action is needed – however, with a claims-made policy, tail coverage will usually be required.

Step 5: Can You Outsource Billing?

If billing and collections are outsourced, you can continue to retain these services. However, if these functions are performed internally, you may opt to retain some of the billing staff and work out of a small leased office, pay a biller to work from home, or transfer this work to a billing service.

Step 6: Sell or Donate Diagnostic and Office Equipment

Diagnostic and office equipment can either be sold or given to an associate or sold on eBay. Another option is to donate medical equipment to a nonprofit organization that performs medical mission work. Equipment which is leased can be a bit trickier to deal with. Review your leasing contracts carefully, with an attorney if necessary, and try to negotiate the terms with the vendor.

Step 7: Destroy Supplies with the Practice’s Information

Any office supplies which contain the practice’s name or other information - license or DEA numbers and the like - such as prescription pads should be destroyed. Contact your drug reps to figure out what to do with unused samples.

Next: Determine How the Practice will be Bought Out

For a physician retiring from a group practice, most of the above will be taken care of by the office staff. The only thing left then is determining how the physician will be bought out by his or her partners. We’ll try to cover this in more depth in future posts.