Taking Down Your Shingle

When you're a physician with a practice, your retirement affects not only you, but also your partners, staff, and patients. Establishing a successful practice is a process that requires years of hard work. You will also need plenty of advance planning and some outside help when you're ready to leave it behind.

Gearing Towards Retirement

Many practitioners ease into retirement by gradually scaling back over a period of several years. Most stop accepting new patients during this phase. If you work in a practice with other colleagues, you can ask them to assume some of your caseload, or accept a new partner into the practice.

Selling Your Practice

Just as most retirees rely on their home as a major asset, the practice that you've worked so hard to build can also be a valuable financial resource. Physicians who work in a joint practice generally work out an agreement with their partners. Payment can take the form of a lump sum, as monthly payments spread out over a period of years, or a combination of the two.

If you're a solo practitioner, it is especially important to start planning early. Some experts recommend beginning the process at least two years, and ideally a decade, in advance. This will prevent you from being forced to sell your practice for less than it is worth. Having plenty of time will also give you the opportunity to choose a "successor." Usually this is a younger practitioner who gradually buys the practice by accepting a reduced salary or offering cash payments for a fixed time period after your retirement. If you discover any serious differences between yourself and your intended replacement, planning in advance will also give both of you sufficient time to work things out.

Notifying Your Staff

It is a good idea to notify all of your employees a few months before you retire. However, there is the risk that some of your staff will find new work before your practice closes or changes hands. To prevent this problem, some experts suggest giving each staff member who is present at the time of the transition a bonus (for example, one week's salary for each year they've been with the practice), which also doubles as a thank-you gift.

Notifying Your Patients

There are no statutory requirements for physicians to notify their patients prior to retirement. However, experts suggest that you give active patients at least 30 days' notice. This will give the patients enough time to find another physician, and protect you from patient abandonment lawsuits. It is recommended that you notify any patients you've seen in the past 24 months by mail.

If you are closing your practice, in the letter to your former patients, it's a good idea to recommend three or four trusted physicians. Ideally, you should start discussing patient referrals with these colleagues 12 to 18 months before you plan to retire. Before making recommendations, check your health plan contract to see if you are required to recommend practitioners within the network, or whether you can recommend those outside of the network as well.

Notifying Other Parties

Consult the Experts

Arranging for the Care of Medical Records

To guard against malpractice suits, keep all of your medical records for at least the time period dictated by the statute of limitations, which varies by state. For example, malpractice suits usually have to be filed within two years from the date of the incident in Pennsylvania, but in Maryland they can be filed within five years of the date of the incident or three years from the discovery of harm, whichever is shorter. In some states, the statute of limitations does not apply until the patient reaches the age of majority at 18 or 21. Check with your attorney and your malpractice insurance carrier for details. Since there have been cases of physicians being sued after the statute of limitations has expired, some experts recommend transferring only copies of any records, and keeping the originals in perpetuity as an added precaution.

Your partner(s) or the buyer(s) of your practice will usually retain your old medical records. If this isn't the case, you can ask another physician to keep your records. It is highly recommended that you obtain a records transfer authorization form from patients beforehand, and that you have a written agreement with the physician who takes your medical records.

If you must keep the medical records yourself, ensure that they are stored in a safe place that is protected from moisture and fire. Consider transferring your records onto CD-ROM or microfilm for easier storage. Possible storage venues include a secure place in your home or a safety deposit box. Contact a records retention service or your malpractice carrier for recommendations if you want to store the records in an outside facility.

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Leaving your practice for the last time will probably be an intensely emotional experience. With proper planning, you'll have the satisfaction of knowing that your practice is in good hands, or that all the loose ends have been tied up before its closure. Best of all, you'll be financially and emotionally ready to embark on your new life, whether in a new job or as a retiree.

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