How to Leave a Medical Practice: A Step-by-Step Professional Guide

Leaving a medical practice takes careful planning. Legal, professional, and ethical obligations all come into play.

You might be retiring, switching careers, or heading to a new job. Each situation means you need to protect yourself and your patients as you go.

The most important thing? Give enough notice to patients and colleagues. You also need to handle medical records properly and follow state licensing rules.

Experts usually recommend giving at least 3 months notice before taking your leave so the transition feels less rushed.

Your exit affects patients, coworkers, and business partners. You’ll want to understand your contract, keep up with insurance, and handle patient records the right way. That’s how you avoid legal headaches and keep your reputation intact.

Key Takeaways

• Review your employment or partnership agreements early to understand notice requirements and restrictions before planning your departure
• Notify patients at least three months in advance and arrange for proper transfer of medical records to ensure continuity of care
• Address liability insurance, licensing requirements, and financial obligations to avoid legal complications after leaving the practice

Reviewing Employment and Partnership Agreements

Your contracts spell out your rights and what you need to do when you leave. Notice requirements, non-compete clauses, and buy-sell terms can really shape your options.

Identifying Notice Requirements

Most employment agreements demand written notice before you leave. You’ll usually see 30 to 90 days, but sometimes it’s as long as a year.

Key elements to review:

• Written notice deadline
• Specific format requirements
• Delivery method (certified mail, email, or hand delivery)

If you don’t give proper notice, you could face breach of contract claims. Your practice might even seek damages to cover your remaining term.

Deferred compensation plans often tie payouts to your notice period. Longer notice can mean more money for you. Some contracts even want six months or a year of notice for full benefits.

Check your retirement plan vesting schedule closely. Your last day might affect whether your benefits vest. Some plans require you to work the whole calendar year.

Understanding Restrictive Covenants

Non-compete clauses limit where you can practice after you leave. They usually block you from working within a set radius for one to two years.

Common restrictions include:

• Geographic radius (5-50 miles depending on location)
• Time period (usually 12-24 months)
• Specific medical specialties covered
• Patient solicitation prohibitions

Courts often enforce these agreements if they seem reasonable. Rural areas sometimes have bigger restricted zones. Don’t just assume you can ignore these covenants.

Employee solicitation clauses stop you from recruiting staff. These rules might last even after you leave. Breaking them can lead to tortious interference claims.

Patient contact restrictions are tricky. Usually, you can’t reach out to patients directly, but patients can still ask for their records to move with you.

Handling Buy-Sell or Shareholder Agreements

If you’re a partner, you’ll have more documents to check. Shareholder agreements and operating agreements spell out how you leave.

Documents to examine:

• Shareholder agreements (corporations)
• Operating agreements (LLCs)
• Buy-sell agreements
• Deferred compensation contracts

Buy-sell rules decide how your ownership gets valued and bought out. Sometimes they use book value, sometimes a formal appraisal. Payment might come as a lump sum or in installments over years.

Trigger events matter. Voluntary departure often brings lower payouts than if you’re forced out. Death or disability usually brings the most.

Partnership breakups can get legally messy. You’ll want to check voting rights, capital accounts, and who owns what equipment.

Think about hiring a lawyer to review these. The financial impact can be huge, and contract language is rarely simple.

Planning Your Departure Timeline

A clear timeline helps you leave your practice smoothly. Your last day should give you time to handle everything and avoid chaos for your patients and coworkers.

Setting a Realistic Departure Date

Your contract tells you how much notice you need to give. Most call for 60 to 90 days, but some stretch to 180 days.

Check your contract for the exact notice period. Missing the deadline could cost you.

Consider these when picking your departure date:

• Patient schedules: Try not to leave during busy times or when lots of staff are out
• Benefits timing: See if leaving affects your retirement or bonus
• Licensing requirements: Some states want 30 days written notice to patients

Add some buffer time. Transitions almost always bring surprises.

Coordinating with Prospective Employers

Start talking with your new employer early. Let them know your notice period and any restrictions from your current contract.

Discuss these with your new employer:

• Your earliest possible start date
• Any non-compete limits
• Credential and license transfer timelines
• Malpractice insurance transition details

Be upfront if things might get delayed. Most employers understand you want to leave your current job responsibly.

Keep them in the loop if your timeline shifts.

Mitigating Disruptions in Patient Care

Plan your exit so patient care doesn’t suffer. It protects your patients and your reputation.

Patient notification timeline:

• 60-90 days before leaving: Tell the practice and start planning
• 30-45 days before leaving: Send notices to active patients
• 2-4 weeks before leaving: Follow up with patients who need records moved

Try to finish ongoing treatments before you go. Don’t leave in the middle of complex cases.

Work with your colleagues to transfer patients smoothly. Leave good notes about ongoing care.

Set up a plan for emergencies. Make sure patients know who to call once you’re gone.

Notification Requirements and Legal Compliance

When you leave a practice, you need to follow notification rules. Patient notification varies by state, but staff and regulatory notifications are more standardized.

Notifying Patients

Patient notification requirements vary a lot. Some states have strict rules, others just offer guidance.

Your notification letter should include what patients need for ongoing care:

Required Information:

• Your last day
• Reason for leaving (if you want to share)
• Other physicians patients can see
• How to get medical records
• Contact info for records
• Emergency instructions

Most states suggest 30 to 60 days notice. Texas, for instance, spells this out.

Be careful with patient solicitation rules in your contract. Non-solicitation clauses might limit what you can say about your departure or your next job.

Communicating with Staff and Employees

Staff notice depends on your contract and practice policy. Some want two weeks, others want 30 days.

Key Communication Points:

• Your last day
• Plans for patient care
• How staff can get questions answered
• Any changes to operations

Work with management so staff knows how to handle patient transfers. This keeps care consistent.

Respect confidentiality agreements. They might limit what you can share about your plans.

Reporting to Federal, State, and Local Agencies

Several agencies need updates when you leave or change locations.

Federal Agencies:

• Centers for Medicare & Medicaid Services (CMS) for enrollment info
• Drug Enforcement Administration (DEA) for address or registration changes

State Agencies:

• State medical board for license and address updates
• State insurance department (if it applies)
• Workers’ compensation board (if you see those patients)

Most agencies give you 30 to 60 days to report changes. Some want immediate notice for big changes.

Local Requirements:

• Business license updates
• Local health department notifications
• Hospital medical staff office updates

Check each agency for forms and deadlines. Missing a step can mean penalties or license renewal issues.

Managing Insurance and Liability Issues

You need to pay close attention to malpractice coverage and other insurance policies. Gaps in coverage can haunt you years later.

Reviewing Malpractice Insurance Coverage

Most malpractice policies are claims-made. You’re covered only if the incident and the claim happen while your policy is active.

Read your policy. See what happens when you leave.

Contact your malpractice carrier as soon as possible. They’ll want your departure date and future plans.

Ask if your employer will cover you after you leave. Some practices buy that extra coverage for departing doctors.

Key policy details to review:

• Coverage dates
• Claim reporting requirements
• Notice rules for policy changes
• Where coverage applies

Keep records of all conversations and agreements with your carrier.

Purchasing Tail Coverage

Tail coverage protects you from malpractice claims made after your policy ends. Patients can sue years after treatment, so this is a big deal.

Buy tail coverage before your policy runs out. Most carriers offer it as an add-on.

It usually costs 150 to 300 percent of your annual premium. Some policies give a discount if you’re retiring for good.

Tail coverage options:

• Unlimited tail: Covers you forever
• Limited tail: Covers you for a set time
• Stepped-down tail: Coverage drops over time

Your new employer might provide tail coverage. Double check before buying your own.

Think about the statute of limitations in each state you practiced. Pediatric cases can have much longer reporting periods than adult medicine.

Ensuring Continuity of Other Insurance Policies

Multiple insurance policies require notification when you leave your practice. Take time to review all business and professional coverage.

Notify your general liability insurance carrier. This coverage protects you against non-medical claims like slip-and-fall accidents in your office.

Cancel or transfer professional liability insurance for any medical devices or equipment you own. If you move equipment to a new location, update your coverage.

Insurance policies to address:

• Workers’ compensation coverage
• Business property insurance
• Cyber liability insurance
• Employment practices liability

Contact your health, disability, and life insurance providers. Ask if you can continue coverage independently or through COBRA.

Review any shared coverage with your current practice. Make sure you know when your protection under group policies ends.

Update beneficiary information on all personal insurance policies. Changing employment status can affect coverage terms or premium costs.

Transitioning and Retaining Medical Records

Managing medical records takes careful attention to patient consent and state-specific retention requirements. Your malpractice insurance carrier may have specific rules about record retention that go beyond state minimums.

Obtaining Patient Consent for Record Transfer

Tell patients about record transfers when selling your practice or closing completely. Send written notices at least 30 days before the transition.

Your notification should include:

• Reason for closure or sale
• New location of records
• How to access records
• Timeline for record availability
• Contact information for requests

Some states want explicit patient consent before transferring records to new providers. Check your state medical board for specific consent forms.

Electronic notifications through patient portals can help but shouldn’t replace written notices. For patients without current addresses, reach out through emergency contacts.

Arranging Long-Term Storage Solutions

Professional record storage services offer HIPAA-compliant options for practices without buyers. These custodial services handle patient requests and keep security protocols in place.

Digital storage options include:

• HIPAA-compliant cloud services
• Encrypted hard drives in secure facilities
• Professional medical record management companies

Physical storage needs climate-controlled facilities with restricted access. Document all storage arrangements with business associate agreements.

Your storage provider must guarantee patient access rights throughout the retention period. Ongoing storage costs can run from $2 to $5 per box monthly for physical records, so budget for that.

Complying With Record Retention Laws

Record retention periods vary by state but usually require 7 to 10 years for adult patients. Pediatric records must stay on file until the patient reaches age 21 to 25, depending on your location.

Common retention requirements:

Malpractice insurance providers often require longer retention periods than state minimums. Review your policy terms before disposing of any records.

Proper destruction means professional shredding for paper records and secure data wiping for electronic files. Get certificates of destruction and keep them for legal protection.

Addressing Practice Operations and Asset Disposition

When leaving your medical practice, you’ll need to wind down business operations and handle all remaining assets. Pay attention to contractual obligations, property arrangements, and outstanding financial accounts to avoid legal or financial headaches.

Terminating Vendor and Service Contracts

Review all contracts with vendors and service providers at least 60 days before you leave. Medical practices usually have contracts with supply companies, equipment leasing firms, cleaning services, phone systems, and electronic health record providers.

Check each contract for termination clauses and notice requirements. Some contracts want 30, 60, or even 90 days written notice. Others have automatic renewal clauses that can trap you into extra terms if you miss deadlines.

Key contracts to address include:

• Medical equipment leases
• Office equipment rentals
• Phone and internet services
• Waste disposal services
• Cleaning and maintenance contracts
• Software licensing agreements

Send termination notices with certified mail to create a paper trail. Keep copies of all correspondence and delivery receipts.

Some vendors may try to charge early termination fees, so try to negotiate these costs. Contact your malpractice insurance carrier to confirm coverage requirements during and after the transition.

Handling Office Lease and Property Arrangements

Your office lease is probably your biggest ongoing financial obligation. Review your lease agreement to understand termination procedures, notice requirements, and any penalties for early departure.

Most commercial leases want 30 to 90 days written notice before termination. Some leases let you assign the lease to another party, like a physician taking over your practice.

If you own the property, decide if you’ll sell, lease to another provider, or convert to a different use. Practice assets need careful planning to maximize value during your transition.

Property considerations include:

• Security deposit recovery
• Required repairs or restoration
• Removal of medical equipment
• Transfer of utilities
• Building modifications or improvements

Take photos to document the property’s condition before you leave. This can help protect you from unfair damage claims. Schedule a final walkthrough with your landlord to clear up concerns.

Managing Accounts Receivable and Financial Closeout

Collect outstanding payments from patients and insurance companies as soon as possible. Most practices have 60 to 120 days of accounts receivable that need collection.

Stop accepting new patients and let existing patients know about your departure timeline. Send final bills quickly and follow up on overdue accounts. If needed, hire a collection agency, but make sure they respect healthcare privacy laws.

Financial closeout steps:

• Review all outstanding invoices
• Submit final insurance claims
• Collect copayments and deductibles
• Close business bank accounts
• Cancel business credit cards
• File final tax returns

Work with your accountant to handle payroll, employee benefits, and tax obligations. Give employees their final paychecks, unused vacation pay, and tax documentation.

Set aside funds for ongoing expenses during the transition, like rent, utilities, and loan payments that might continue after you stop seeing patients.

Frequently Asked Questions

Closing a medical practice is complicated. Legal, financial, and patient care issues all come into play.

What steps should I follow to properly close my medical practice?

Start with a review of your legal and professional obligations. Build a timeline that allows enough notice for patients and staff.

Contact your state medical board to get closure requirements. Many states require 30 to 90 days advance notice to patients.

Review contracts with insurance companies, suppliers, and landlords. Provide proper termination notice as required.

Contact medical societies and professional organizations for more guidance. They often have detailed checklists.

Arrange for patient care continuity. Find other physicians who can accept your patients so nobody falls through the cracks.

Which legal requirements must be met when terminating medical services to patients?

Give all active patients advance notice before ending care. Most states want written notification 30 days before your last day.

Your notification should include your closure date and instructions for obtaining medical records. Patients also need information about finding new providers.

You can’t abandon patients who need ongoing care. Emergency or acute patients require special arrangements.

Some states have specific patient notification laws. Check with your state medical board for details.

Keep your malpractice insurance coverage even after closing. Most policies require extended reporting period coverage for future claims.

What is the recommended procedure for notifying patients of a medical practice closure?

Send written notices to all active patients at least 30 to 60 days before you close. Include your last day and contact details for getting records.

Post notices in your waiting areas and exam rooms. That way, patients who visit before closure get the message.

Call patients with urgent needs directly. Some may need immediate care arrangements with other doctors.

If allowed, publish closure announcements in local newspapers. This can help reach patients who don’t visit your office often.

Let referring physicians know about your closure. They can help redirect patients to new providers.

How should patient records be managed during the process of closing a medical practice?

Medical records need careful handling. The physical record belongs to the practice, but the information belongs to the patient.

Store records securely for the required retention period, usually 7 to 10 years after last patient contact. For pediatric patients, some states require longer retention.

If selling your practice to another physician, that doctor can manage the records with patient consent. Get written consent before transferring records.

Consider a professional record storage company if you’re not transferring records to another doctor. These companies handle secure storage and retrieval.

Give patients copies of their records if they ask. You can charge reasonable copying fees if your state allows.

What considerations are important when determining the valuation for selling a medical practice?

Practice value depends on annual revenue, profit margins, and accounts receivable. Equipment value and lease terms also play a role.

Patient volume and retention rates matter a lot. Buyers want practices with stable, growing patient lists.

Location and market conditions affect worth. Practices in underserved or growing communities often get higher prices.

Specialty type impacts valuation multiples. Some specialties bring higher demand and better sale prices.

Recent financial performance over three to five years forms the basis for valuation. Consistent profitability makes your practice more attractive.

Who are potential buyers for a medical practice and what factors influence their purchase decisions?

Other physicians in your specialty usually make up the main group of buyers. They already know how your practice runs and what your patients need.

Hospital systems and healthcare organizations also look for private practices to acquire. They want practices that match their growth plans.

Medical practice management companies sometimes buy practices to expand their portfolios. These companies care most about how efficiently the practice runs and its potential to grow.

Buyers pay close attention to your patient demographics and insurance mix. They also look at referral patterns to see if your practice has steady payment sources and solid referral relationships.

Financial history matters a lot to buyers. If your practice shows steady revenue growth and strong profit margins, you’ll catch more interest.