Tying up loose ends
Answers in Practice
By Swapna Bhatia, MPH, December 1, 2019
Shutting down a dermatology practice can be stressful, whether it be planned or unplanned circumstances — especially if you are not familiar with the protocols of what to do with your patients’ electronic health records (EHRs). Do not make the mistake of neglecting the important details of closing your existing practice. It is important to have a plan in place. The following nine tips can help you prepare:
1. Make arrangements for medical records. Make sure you have a clear understanding of what should be done with patient medical records. If a new physician or entity is taking over patient records, create a contract that explicitly outlines their responsibility for storing, protecting, and releasing the records. The patient may need to sign a release of the medical record before other dermatologists can have access.
2. Arrange for safe storage for both paper and electronic medical records. If you are storing patient records away for some time, notify your state medical board and legal advisor of the storage location six months prior to closing. Let them know how long it will be stored for and arrange for storage of records pick-up. The storage facility should have experience managing secured patient information along with HIPAA agreements. Also, be aware of your state’s law on record retention requirements.
3. Avoid patient abandonment. When a practice is closed, all physician-patient relationships are terminated, but there are actionable steps to take in order to avoid abandonment. Give your patients 60-90 days’ notice prior to closing so that the patient has ample time to find a new dermatologist. This can be through a letter notifying them of your intent to close the practice. Include information on where their medical records will be kept, who to contact should they want to maintain a copy, and an authorization form to transfer medical records if your patient seeks a new dermatologist.
4. Alert staff. It is important to keep all medical and office staff in the loop about the closure. Organize a meeting to notify employees as early as you can. There is a chance staff may leave prior to your closing date, so be prepared to hire temporary staff. Offer additional incentives, determine severance packages (if applicable), create transitional plans on ceasing operations with staff, and go through the step-by-step process of closing the office during team meetings. Make sure benefit plan agencies are notified so employees are provided with all necessary plans regarding discontinuation.
5. Notify appropriate third parties. Tell third parties that the practice is closing up to two to three months prior. This can be with the following vendors: medical and office staff; EHR company; Federal Drug Enforcement System (DEA); hospital, referring, external physicians; pharmaceutical companies; medical suppliers; utility companies; subscription services; professional associations and licensing board; payers (including Medicare); malpractice carriers; and legal advisors.
Inform all third-party vendors of intent to close the practice and of a forwarding address if there are payments or tail coverage to fulfill after the closing. Review all policies with third party vendors regarding termination requirements and determine appropriate termination schedules based on their conditions, including deactivating your NPI number through the National Plan and Provider Enumeration System (NPPES).
6. Consider financial and legal obligations. Speak to your legal advisor and create a plan on how to collect all accounts receivable and settle all accounts payable. Work with the legal advisor to go through any legalities of settling accounts and filing for final returns and determine what needs to be done with your practice’s property.
7. Don’t schedule new patients. Do not schedule any new patients once you have announced your closing date. Refer any follow-up care for patients to another dermatologist.
8. Create notices. Publish closing notices in local newsletters, the office website, and post signs in your dermatology office to notify visitors of the exact closing date. On the actual closing day, create a voicemail to a forwarding phone number stating that the practice has closed. Maintain the message for at least three months.
9. Dispose of medications. There are federal guidelines for disposing of prescription drugs and medications and you can do this by contacting your drug representative for more information. Don’t forget to destroy all prescription pads and keep the narcotics ledger for at least two years.
Having a timeline and detailed process plan of how to close a dermatology practice is key to a successful closure. For model timelines and templates on closing your practice, consult the Academy’s newly revised Valuing, Selling, or Closing a Dermatology Practice Manual. In the manual, there are tips on how to evaluate your practice’s worth, key strategies for a successful sale, and advice on meeting requirements for record retention, staff or patient notification, legal, and accounting.
Additional DermWorld Resources
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