With the current uncertainty of Medicare reimbursement rates and rising operating costs, many medical practices–in particular, independent medical practices–are closing their doors. If you are in the process of closing a medical practice, here are a few areas of concern:
- Patient notice of closing. You will want to consult your state law but usually at least 60 days’ notice of closing of the practice is sufficient for patients.
- Medical records notification/release. You will need to send a letter to patients that identifies how they can pick up their medical records or transfer their records to a new physician, and you will want to include an authorization form for the patient to sign for the release of the records.
- Notify insurance carriers/providers. You should notify your insurance carrier and Medicare/Medicaid providers about the closing of the practice.
- Develop a wind-down budget. You should have a wind-down budget that allows sufficient cash to pay employees their final paychecks and to pay an accountant to do the final tax returns. Be careful not to overlook your obligation to send W-2s to all employees at the end of the year.
- Contact secured creditors. You can make arrangements with each secured lender for it to come and pick up any office equipment or inventory subject to its lien. If you have personally guaranteed any of the debt of the practice that remains unpaid, you will want to work out settlement terms with those creditors to prevent a personal lawsuit from being filed against you.
Jamie Harris is an associate attorney with DelCotto Law Group PLLC. Her practice of law focuses on helping business owners hurdle financial obstacles. Jamie is best known for her experience in filing Chapter 7, 11, 12, and 13 bankruptcies. In her Chapter 11 cases, Jamie has represented companies from many different industries including healthcare, nonprofit, trucking, construction, commercial real estate and telecommunications.