Closing A Medical Practice Upon Retirement

Published on: December 14, 2018

Last updated: May 12, 2025

For various reasons, it may become necessary to close a medical practice. Unlike many other professions, the departure from office-based medical practice requires significant planning well in advance of the date set for closure. Common tasks include how to smoothly transition patients to another provider, who to notify of the closure, how to sell a practice and medical equipment, and what should be done with medical records. Because of the number and complexity of steps necessary to close a practice, we recommend a minimum of 90 days to properly discontinue the practice.

Attorney Consultation

Physicians who plan to retire, sell their practice, or discontinue the practice for other reasons should consult an attorney who specializes in business and/or healthcare law. This type of attorney can provide guidance for sales contracts, determining appropriate compensation and pricing, selling office equipment, dissolution of a business, and compliance with applicable laws and regulations.

Others who would benefit from consultation with legal counsel before closing a practice include physicians who intend to close their practice without selling any of its assets, those who are retiring from a group practice or a medical corporation or partnership, and executors of the estates of deceased physicians.

Notifying Patients

Perhaps the most important part of closing your practice is ensuring patients’ continuity of care. Provide appropriate notice as early as practical (MIEC recommends a minimum of 30 days) so they can begin to transition their care to another provider. This may include scheduling follow-up appointments if necessary, obtaining refills of medications, and perhaps helping patients to find another practitioner.

There are several ways to notify patients about the impending closure of your practice. In this electronic age, methods of notification may include email, text message, posting prominently on the patient portal and practice website, messaging via the patient portal and notification by any other means of electronic communication in use at the practice. In addition, a letter should be sent to the last known address of all patients who were seen in the past three years. The letter should include information about when the practice will close, what services are available up until close, and how they can obtain a copy of their records or have them forwarded to another provider. Include a HIPAA compliant authorization for the release of the patient’s records. An example of such a form may be found here. You may charge the patient for a copy of the records, consistent with provisions under state law or you may choose to waive the fee. MIEC suggests that you forward a copy of the records to the patient’s next physician without charge.

In addition to sending letters, patients should be notified individually when they are in the office. Depending on the nature of your practice, you may wish to approach certain patients individually and early in the process. This may be particularly helpful for patients with acute or serious medical conditions, those who require special accommodation, and/or patients who generally require more attention and might have a difficult time transitioning to another physician. It is also advisable to post signs in your reception and/or treatment rooms to notify patients of the impending closure of your practice.

Notifying Staff and Related Entities

As soon as the decision is made to close the practice, staff should be notified, preferably in-person. Share plans to scale back appointments, services and or sequence of office closings in a multi-office practice. Ensure that staff tasked with scheduling do not schedule any patients after the planned closing date. Also, be certain that any software-based or automated/self-scheduling platforms are adjusted to schedule only until the close of the practice. Offer to serve as a reference for future job inquiries if appropriate. Prepare to hire temporary staff as needed to cover positions from which staff may resign before the practice closes. Consider incentives for staff willing to stay till close.

Contact hospitals and other medical entities with whom you are affiliated to ensure they are aware of your intention to leave the practice. This includes entities to whom you refer patients and from whom you receive referrals.

Custody and Transfer of Medical Records

If you sell your practice and the buyer agrees, you may designate the buyer as the new custodian of your records. You may not sell patient records or “transfer” patients automatically to another physician’s care. Though physicians may sell the tangible and intangible assets of the practice, including “good will,” they may not “sell” or otherwise transfer patients to another physician without the patient’s consent. You may recommend to your patients that they continue treatment with the new provider but be certain to advise patients that they are free to choose any physician they wish.

More recently, a majority of medical practices use an electronic medical record (EMR). Sometimes these records are housed with a partner organization such as a hospital or other medical entity. When planning to terminate practice, it is important to contact the partner organization, if applicable, and ensure that the records will remain preserved and available. If there is no partner organization, the EMR vendor must be contacted to engage necessary processes to preserve the records and forward them to subsequent providers, or another designated custodian.

When transferring custody of records as part of a sale, it is prudent to specify in the purchase contract that the buyer:

Agrees to be custodian of your medical and billing records and will maintain them in a safe and secure place.
Will make the records available to your former patients and to any physician to whom a patient requests a copy be sent.
Will make the records available to you in the event you require them for any reason, including the defense of a claim.
Will preserve the records for at least ten years following transfer of custody, and that the records may not be destroyed before the passing of ten years, without your consent.

If you do not sell your practice, you may still designate a physician or other medical entity to be custodian of your records if they agree to do so. This person or entity must keep the records for the required period of time and make them available to you, the court, and to patients upon presentation of an appropriate authorization. Whether or not a fee is paid to the custodian of records, MIEC strongly recommends that you and the custodian sign a written agreement outlining the terms of the custodianship.

Of note in the State of Hawaii, HRS § 622-58(e) requires that a practitioner intending to cease practice must submit a plan to preserve medical records, to the Department of Health. We recommend that our Hawaii members contact the Department of Health for the latest process to comply with this statute.

Lastly, you may store the records yourself and continue to act as the custodian of records. In any case, provide your patients with specific information regarding how they can request a copy of their medical records after your retirement.

For more information on retaining medical records and state-specific requirements, please see MIEC’s publication entitled, “How Long Should We Keep Medical Records?”

Telephone, Mail, and Related Services

Consider retaining an answering service for 3-6 months. If another physician purchases your practice, ask that his or her staff to take your calls and inform patients of your retirement. Include this provision in the sales contract. Alternatively, you may arrange for your office number to be forwarded to your home telephone for several months. It is appropriate to have a voicemail message to advise callers that you have retired from practice and who they may contact for further information.

Be certain to notify the US Postal Service that you will need office mail forwarded to your home for 3-6 months. This may be accomplished here. Contact local utilities, internet, water, and trash to discontinue service to the office location, as applicable. If there is a lease associated with your office, contact the landlord at your earliest convenience to discuss how to terminate that agreement based on the lease agreement. Keep a business bank account open to receive payments until no further payments are anticipated.

Notifying Contracted Insurers

If you have contracts with health insurers, notify them of your retirement plans well in advance of your retirement date. Depending on the terms of your agreement, the advance notice to cease practice may be specified and should be identified early in the process to close the practice. Insurance carriers may reassign your patients to another physician. If so, plan to modify your patient notification letters to inform patients of the contact information for their new physician, how their respective plan will handle reassignment, and who to call for further information. This may result in multiple templates for notification letters if multiple carriers insure your patients.

Notifying Licensing Boards & Drug Enforcement Association (DEA)

Whether retiring, taking a temporary leave from practice, or moving to another state, physicians must inform appropriate state licensing boards and discuss whether it would be appropriate to change the status of your medical license or to transfer it to another state. Some states allow physicians to choose between maintaining an active license, changing to an inactive license, or changing to retired status. These require different processes to reactivate a medical license, if desired, in the future.

Notify the DEA of any practice change so that appropriate changes can be made to your prescribing authority. Include practice location changes if applicable or the date on which you intend to cease the practice of medicine. Arrange for the safe disposal of prescription medications in compliance with applicable law. Destroy all prescription pads by shredding.

Accounts Payable & Receivable

Settle all bills prior to retiring the business entity. Discontinue services associated with those accounts and cancel any automatic renewals or subscriptions. If using a 3^rd party billing service, be certain to notify them of your plan to discontinue practice on a specific date. Review your contract with this entity, if applicable, to ensure that notification is timely and determine whether billing activities will continue after the date you discontinue practice.

Notifying MIEC

Before your retirement date, notify MIEC’s Underwriting Department and arrange for “tail coverage” (also called extended reporting endorsement), which is an extension of your professional liability policy to provide ongoing coverage after you retire. This coverage insures you for malpractice claims reported after your retirement but involves treatment that occurred while your regular liability policy was in effect.

Importantly, MIEC offers tail coverage at no charge to retiring physicians, but this is not automatic and must be discussed. If you plan to close your medical practice but wish to continue practicing on a limited basis, you may qualify for part-time coverage depending on how many hours per month you plan to work. For further information, contact your MIEC Underwriter.

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