Closing down a medical practice doesn’t happen overnight.
It’s a process that can take six months to a year to complete, depending on the practice size and reason for the closure. Taking care of all that’s involved—from paying vendors and collecting receivables to retaining medical records and disposing of practice assets—requires careful action, diligence, and, of course, time. A properly executed closure is a must to protect both the physician and the patient.
Reasons for closing a practice could include physician retirement, relocation, disability, death, and loss of license, as well as forced dissolution, the sale of the practice, and other events. Even if you’re selling your practice, there are still things you must do to properly close it out.
The tasks involved in closing down a medical practice
There are numerous duties involved with closing a medical practice. As I mentioned earlier, it’s a process—one that is similar to shutting down an estate. Depending on the reason for closure, you’ll need to take care of the following:
- Paying vendors
- Collecting receivables
- Submitting final payments to vendors
- Closing vendor accounts
- Closing utility accounts
- Notifying patients
- Notifying insurance providers
- Notifying the appraisal district
- Retaining and storing medical records
- Rectifying final tax issues
- Filing tax returns
- Selling practice furniture and/or equipment
- And more…
The challenges of closing down a medical practice
A medical practice may close for a number of reasons. For physicians choosing to close, depart, or sell their practice, it can be a difficult and emotional experience. It can equally challenging for family members closing the practice upon a physician’s death or incapacitation.
Regardless of the reason for closure, there are many tasks to manage. Making sure these are done correctly and within the appropriate time frame is critical. One highly important task is to notify patients via letter of the physician’s departure and/or practice’s closure. This must be done within 60 to 90 days of the change, if possible, to allow patients to find an alternative provider. State laws may also require a physician to notify the public within a certain timeframe as well.
Retaining medical records can also prove challenging, especially if the software containing them is inaccessible. In these instances, it may be wise to hire a software consultant who can help extract records as needed. Patients must be able to access their records and physicians must have them (in accordance with their state’s statue of limitations) in the event of a medical liability case.
Finding time to complete these and other tasks associated with closing a practice can be overwhelming for both physicians and family members. For family members especially, it can be hard to know where to start.
How Reed can help
Whether you’re a physician or family member, I can step in as a consultant to handle or advise on all duties necessary for closing the practice or specific parts of the process. I can even take charge of the entire closure, whether as the implementor or quarterback, so you don’t have to worry about it. If needed, I can serve as an interim CEO to help dissolve the practice entity.
With more than 30 years of experience helping physicians and family members close down medical practices, I can guide you through the process to make sure it’s done correctly.