Every day, some 10,000 baby boomers turn 65. At that rate, the day may soon come when a baby boomer physician is ready to retire from your practice.
Ideally, everything from required notifications to payout of deferred compensation will be spelled out in a partnership agreement or employment contract. But you’ll still want to take steps to ensure a smooth transition in patient care and minimize disruption to the practice. Here’s how:
1. Review contracts. Review any legal agreements that the retiring physician is party to — equipment and building leases, bank notes and any shareholders’ agreement (for practices structured as a corporation) or operating agreement (for LLCs).
2. Develop a plan for patient notification. To avoid charges of patient abandonment, physicians must scrupulously adhere to state and federal guidelines regarding patient notification — including, in some cases, publishing notices in the newspaper. The practice can do its part by displaying announcements in the waiting room and adding a message to its voice mail system informing patients of a physician’s departure.
3. Notify third parties. Your state licensing board, the Drug Enforcement Administration, third-party payers and your malpractice carrier will all need to be notified of the change in status. While the individual doctor may do some of this legwork, it's ultimately the practice's responsibility to make sure that everyone is properly notified.
4. Think through capacity. Switching patients to other physicians in the group is certainly an option if the practice has the capacity. But if you’re planning to replace a retiring physician, consider whether you’ll need to bring in a locum tenens or tap a local physician to cover until you are able to recruit the right provider.
5. Evaluate malpractice coverage. “Tail coverage” may be necessary to cover any claims filed against a retired physician for treatment that a physician provided while employed at the practice (especially if he or she has previously been insured on a “claims made” basis). The employment or shareholder’s agreement should spell out exactly who is responsible for procuring the coverage, and the party securing the coverage should provide a certificate of insurance to the other party.
6. Make plans for records. Ultimately, physicians own their patient’s records and are responsible for archiving them. But to ease the transition, the departing physician can authorize the practice manager to coordinate patient access to their medical records and/or facilitate transfer records to other physicians. Physicians will also need to check with their Electronic Medical Record (EMR) vendor on policies for retrieving and archiving their particular electronic health records.
7. Address IT issues. A physician’s departure also requires dotting the technology I’s and crossing the T’s. This could be as basic as changing passwords and login credentials, or it could mean modifying contracts for scheduling, billing and/or EMR software.
Start Planning Now
To bring some order to the process, some practices negotiate a formal separation agreement with departing physicians to clarify and solidify the terms of departure, including the settlement of any money owed. The key to a smooth transition is to create a transition plan well before the retiring physician’s departure — some practice consultants say as much as 18-24 months in advance.