Closing Your Medical Office? Make Sure You're Doing It Correctly
Posted on: 29 April 2019
You might decide to close your medical practice or another health facility for any number of reasons, from simple retirement or relocation to oppressive revenue problems or lawsuit judgments. Unfortunately, you can't just turn the lights off, lock the door, and walk away -- you must first take care of some important details to ensure that you've covered all of your legal and financial bases. Add these major task categories to your to-do list, and pursue them as thoroughly and completely as possible as you shut your medical office down for good.
Valuation is the process of determining the monetary value of your medical office's tangible and intangible assets and liabilities. Your tangible assets include every physical object or device that directly adds value to your practice or facility. Your office may have several types of sophisticated diagnostic and treatment equipment -- equipment representing an enormous initial investment and considerable ongoing value. To determine the value of these items, you'll want to engage a company that offers medical equipment appraisals. A medical office appraisal can express your equipment's value in a variety of terms, from its Fair Market Value to its Forced Liquidation Value.
Getting a medical equipment appraisal is only one step among many when you're shutting down a medical office. A number of individuals and organizations must be notified well in advance of your impending shutdown -- starting, of course, with your staff. In addition to notifying all of your patients and regular consulting partners that you're closing up shop, you must also post public notices in the local newspaper and send word to the relevant professional associations. Change your voice mail messages and submit mail forwarding information to the post office. If you still have accounts receivable, do everything to collect them before you officially close.
It's all too easy to forget or neglect to inform one or more of the key providers that have helped you keep your office going. Contact your various insurance companies, utility companies, suppliers, and service contractors to cancel your relationships with them. Since claims might continue to come in after your liability coverage has expired, you may want to take out a tail coverage (extended liability) policy that protects you against such incidents.
Laws such as HIPAA demand that medical providers keep their patients' records confidential. At the same time, your state legislature or state medical association may call for your office to retain patient records for a certain number of years. How do you handle this sensitive issue if you're going out of business?
If you're selling your practice instead of liquidating it outright, the new practice owner may continue to cater to the same patient base. This means that you need to perform a smooth, secure orderly transition of those patient records to the incoming or ongoing staff. Let your patients know that they have to option to stay with the new practice and ask them what they wish to do. If they decline to stay with that practice, you can send the patient records to a commercial records storage company. Whoever holds on to the records should sign of formal, legally binding custodial agreement that defines the custodian's obligations and who may have access to the records.
If you're stuck with custodianship of patients' medical records, you may eventually decide that it's safe to get rid of them. This kind of document destruction needs to be performed by a HIPAA-compliant commercial records company.
Closing any business presents a number of challenges, and medical businesses are certainly no exception. But by taking every step of the process into consideration and following those steps according to a careful plan, you can move on from your medical office without running into costly complications.Share