SILBEN Healthcare Services
Legal Mistakes Physicians Make in Closing or Leaving a Medical
Practice
Every
year, thousands of physicians retire, sell or move their practices, or they
quit their jobs for more lucrative opportunities. In doing so, they usually
focus on the new position that seems more exciting or satisfying. However, it
is a mistake to neglect the details of closing the existing practice or
otherwise exiting the old position. Many physicians make serious mistakes when
closing practices or leaving jobs, mistakes that can affect them for years to
come.
Mistake
1 Abandoning Patients
Once a physician has established a physician-patient
relationship, the physician must not “abandon” the patient. Abandonment is a
problem when a physician terminates a relationship with an individual patient,
but can also be a problem when a physician closes a practice, thereby
terminating all relationships with all patients. Abandonment is a particular problem if a
physician abruptly closes a medical practice without prior notice to patients,
or fails to properly notify some segment of the patient population (e.g., where
a physician closes the practice but fails to notify nursing home patients).
Mistake 2 Violating
Noncompete Clauses
A
noncompetition clause (also called a “covenant not to compete”) prohibits the
departing physician from competing with either an existing practice or the
purchaser of a practice, for a specific time and in a specific area. Physicians
often overlook these clauses when they leave jobs with other practices, and
sometimes find themselves on the receiving end of injunctions and lawsuits.
Mistake 3 Insisting on
Accounts Receivable When There Is No Right to Them
Insisting
on accounts receivable when there is no right to them occurs often in
separation from employment situations. If there are services rendered but not
billed, or billed but not yet collected as of separation, it is tempting to lay
claim to them if they are substantial. However, when one is an employee, the
payment of salary is usually full compensation for services rendered.
Mistake 4 Not
Understanding the Tail Coverage Obligation
Departing
physicians generally want their former employers to pay for extended reporting,
or “tail coverage,” when they leave a practice.
Mistake 5 Failing to
Make Proper Arrangements for Medical Records
When
a physician relocates a practice to a new area, it is tempting to leave the
records with another physician under some kind of informal agreement. This can
backfire. What happens if the other physician discards the records because the
patients don’t like him or her? Or what happens if the other physician gets
tired of storing the records? Or what happens if the other physician closes his
or her practice and access cannot be gained? What happens in the event of a
Medicare /Medicaid , Health Plan Audit ?
Mistake 6 Failing to
Provide Adequate Contact Information
When
physicians leave a practice situation they are dissatisfied with, there is a
temptation to make it difficult for that practice to contact them, such as by
leaving a forwarding address that is a post office box, a telephone number that
is an answering service, and so forth.
Note: Federal / State / Local Las are in place… Will you
be compliant ?
Mistake 7 Violating
Fraud Laws When Selling a Practice
The
federal government believes that some practice sales are the source of illegal
kickbacks. It could work like this: The selling doctor is in a position to make
referrals of Medicare and Medicaid patients to the buyer, and the purchase
price of the practice could be considered a payment for those referrals. This
is a particularly sensitive issue where a physician sells his or her practice
to a hospital, then goes to work there as an employee, or where an
ophthalmologist purchases the practice of an optometrist to ensure a steady
referral stream.
Mistake 8 Not Notifying
Appropriate Third Parties
Sometimes
physicians are so anxious to retire or leave a job that they don’t make
appropriate notifications beyond their patients. This can lead to problems
after retirement, often not major, but annoying nonetheless, and usually
entirely preventable.
Note: Federal / State / Local Las are in place… Will you
be compliant ?
Mistake 9 Prescribing
for Family after Retirement
When
physicians retire but keep their license active, there is always the temptation
to prescribe drugs for themselves and family members. Doing so can lead to
allegations of failing to keep adequate medical records, nontherapeutic
prescribing, and worse. Medical boards are afraid that retired physicians will
try to rely too much on their experience and not keep up with new drug
information.
Mistake 10 Assuming All Legal
Obligations End on Retirement
Many
physicians assume that, because they have retired, they no longer need to
respond to subpoenas, answer complaints filed with the medical board, or do the
other things they had to do while practicing. For example, if a retired
physician receives a subpoena for medical records, the physician must respond
to it, for there is no “retired person” exception to the rules of discovery in
lawsuits.
Physicians contemplating retirement, selling, or leaving a
medical practice for any reason should carefully plan their actions to avoid
these mistakes. Ideally, competent assistance should be sought before making a
firm decision to sell or make a move. In the case of a sudden, unforeseen
event, such as a catastrophic illness, or death of a physician contact a
Healthcare Consultant to seek advice. In any event, hasty decisions and
actions, while expeditious at the time, can lead to problems later that can be
avoided with proper planning.`
SILBEN
Healthcare Services can assist you with this and other services. For more
details contact us:
SILBEN Healthcare Services, INC.
Paul G. Silverio-Benet
Phone: 305-975-1171
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