Closing Your Pediatric Practice

Because of jurisdictional variations in law, regulations, and professional organizations, it is not possible to provide a complete guide on how to close a practice. That’s why you’ll want to obtain qualified legal and financial advice for specific guidance throughout the process. The following checklist may help you get started.

Important Notifications

Staff

• Hold a staff meeting to notify employees of practice closure and how it will affect them.
• Prepare to hire temporary staff if current employees leave prior to closing date.
• Consider offering incentives to one or more employees to stay until the last patient is seen, and until the practice is officially closed.  Having an employee to help collect any remaining accounts may be helpful.
• Write a short script announcing the practice closure that your staff can use when discussing the issue with patients and families on the phone.

Patients

• Regardless of any other requirements to notify patients, give them as much advance notice as possible. You are legally obligated to provide emergent care for 30 days before you close. It may not be feasible to have all patients notified within this time frame. You may want to consider giving at least 90 days’ notice.
• Check payer contracts for any patient notification requirements.
• Send a letter to each patient informing them of your retirement or closure. See sample patient notification letters for Closing a Medical Practice or Retirement. These letters include reason for closing, planned date of closure, how to obtain copies of medical records, the patient’s options for obtaining continued medical care, both routine and emergency, where to obtain copies of medical records after closure, how long records will be retained and be accessible, and contact information for future record requests. Include a transfer of record authorization form to transfer copies of medical records to your patients’ new providers. Place a dated copy of the notification in each patient’s medical record.
• Send additional closure notifications to patients by email and/or text or other electronic methods such as ‘mychart’ where applicable.
• For high-risk patients, consider using both regular mail and certified mail with return receipt. Place a copy in each chart. If undeliverable, make a note in the record about any special attempts made to notify the patient.

The Public

• Post signage in your office to notify people of your last day of business.
• Place a notice on your practice website and any social media accounts.
• If required by local law, publish newspaper ads with details about the closing.
• These notifications may still be necessary if your practice is being taken over by a local health care or hospital system.

Drug Enforcement Agency (DEA)

• Inform the DEA whether you want to either continue or surrender your DEA registration.
  Hospitals
• Notify the hospitals where you have privileges of your intention to close your practice.

Other Physicians

• Announce your decision to close your practice to colleagues that you work with or refer to.

Payers

Alert all payers of your practice closure.

• Public such as Medicaid, CHIP.
• Commercial Insurance.  Some contracts have specific requirements regarding notification of patients for planned closures.
• Insurance plans may have specific requirements in your contract for how much notice you need to give them to cancel your contracts.
• Give payers a forwarding address to send payments that resolve after the office is closed.
• Pay attention to contract terms and payment cycles for capitated contracts. Mid-month closure may cause accounting complications, not to mention patient care obligations. Off-cycle closures could also jeopardize any risk pool or bonus payments.

Professional Associations

• Notify your state medical board, licensing board, and credentialing organizations.
• Notify CAQH
• Report your new address to the AAP. If retiring, note this. You may be eligible for senior membership status (if so, consider joining the Section on Senior Members).
• Inform other medical organizations’ membership departments.

Ancillary Services

• Inform labs and other ancillary services to which you refer patients.

Suppliers/Service Contracts

• Contact business organizations such as collection agencies, medical suppliers, office suppliers, housekeeping services, hazardous waste disposal services, and magazine subscriptions.
• Request final statements from these vendors to close your accounts.

Patient Scheduling

• No new patients should be accepted once the closing date is announced.
• All patients should be given a list of pediatricians who are taking new patients (Best practice: First discuss the pending office closure with local pediatricians to see if they’d be willing to be a referral).
• For patients who need continual care for chronic medical conditions you need to ensure a smooth transfer of care.  

Accounts Receivable

• Process your accounts receivable as much as possible, to collect money owed to you.
• Consider employing a staff member for 90 days before turning it over to a collection agency so you can reconcile accounts after the practice has closed.

Additional Financial Considerations

• Keep your business bank accounts open to receive electronic payments.
• Consult with your accountant as to what information will be needed for tax filing purposes for the year of closure and beyond. Complete corporate tax filings at your fiscal year end.
• If you have a retirement plan for yourself or your employees that you administer, you have an obligation to continue or arrange for a move to a different plan. Make sure you notify employees of this change.
• Notify your landlord and close out your lease.
• Notify and pay your final utilities, cable, and other facility bills.
• Finalize the selling of the hard assets of the practice.

Insurance Policies

• Review your and your employees’ insurance policies and update or cancel where appropriate: Examples are liability, health, life, disability, workers compensation.
• Inform your employees about COBRA options.
• Obtain tail coverage extended liability insurance, if necessary, which provides coverage against claims reported after the malpractice policy expires. See the article on the Basics of Medical Liability for additional information.

Medical Records

• Few issues raise more questions when closing a practice than what to do with the medical records. Remember that the physical record (whether paper or electronic) is the property of the practice and the protected health information in the record is the property of the patient. That means the patient is entitled to obtain copies of the record, but the physician must retain the original in case a liability claim is filed. See article on Medical Record Retention for additional information.
• Contact your state government and/or liability insurer for record retention guidance, including the legal length of time records should be retained, and any other state specific requirements.
• Arrange for safe storage for both paper and electronic original medical records. They must be stored in compliance with all regulations and in a place where they are safe from tampering, loss, access by unauthorized personnel, fire, or flood. Make sure the storage facility has experience handling confidential patient information and HIPAA agreements.
• Notify your state medical board of the storage location.
• Establish a mailing address for copies of medical record requests after closing.
• Obtain written authorizations to transfer copies of all patient records. Keep a copy of this authorization in the original record.
• If original records will be held by another physician or practice, make sure they will comply with all legal requirements. Obtain a written agreement specifying the length of time records will be held, arrangements to transfer authorized copies of records at patient requests, guaranteed access for you in case of a liability claim or other requirement, and notification to you before record destruction or transfer.
• When transferring medical record information on behalf of patents, you may charge the patient a reasonable fee to reflect the cost of the materials used, the time required to prepare the material and the direct cost of sending the material to the requesting physician or other party. This fee may be determined by law. Since this is generally an uninsured service, make reasonable attempts to collect the fee. Nonpayment of the fee or any other unpaid bills are not reasons for withholding patient charts.
• Consider using a professional service to destroy any records containing protected health information, both paper and electronic. Obtain certificates of destruction. Destruction can be by incineration, shredding, pulverization, or, in the case of computer media, file destruction by a computer professional.

Other Practice Documents

• Keep tax returns, personnel files, accounts payable invoices, contracts, and other financial records according to recommended guidelines, per the instructions of your business or legal consultants.
• Retain HIPAA documentation, such as acknowledgement of privacy notice, requests for amendments, and workforce training documentation per legal requirements. Arrange the proper storage and eventual disposal of clinic documents such as financial records, especially anything containing protected health information

Medications

• Follow the federal guidelines for disposing of prescription drugs and medications.
• Contact pharmaceutical representatives to determine what to do with unused samples.

Mail Service

• Contact the U.S. Postal Service regarding mail forwarding details.

Telephone Service

• Change your telephone message to announce that you are closing your practice. Consider having all incoming calls receive this message before being connected.
• Consider keeping your telephone number active an extended period after the closing date, so patients know the practice is closed.
• Notify your answering service and nurse triage service.