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Closing a Practice: Some Practical Suggestions

Closing your psychiatry practiceDr. R is a psychiatrist in his late 60s with a thriving private practice. One day, he suddenly feels dizzy and out of sorts. After being examined by another physician, he is diagnosed with a stroke. His neurologist cannot say if he will fully recover or be able to practice medicine again. Dr. R and his family know that he might suddenly need to retire.

A nightmare scenario? Perhaps. But it’s not as uncommon as you might think. Someday you will retire, and while the best-case scenario is a carefully planned exit, fate does not always respect our wishes. This is why it’s wise to develop a plan before you need it.

The following article offers some practical suggestions based on my experiences counseling psychiatrists who are planning for retirement or who have faced unforeseen circumstances causing them to close their practices. Here, we will consider both planned and unplanned retirement scenarios.

Planned retirement

Let’s start by outlining a suggested sequence of pre-retirement tasks, many of which are identical to those required in an unplanned retirement. The difference in an unplanned retirement is that someone else will complete these tasks for you. This might be your spouse, one of your children, or a colleague. In some cases, you might want to pre-designate a “special administrator” to oversee the process as part of your estate plan. This
administrator is typically an attorney with experience in estate issues.

The following is a look at the steps you should take before closing your practice.

Inform your board of medicine

Most states require that you go through a formal process of applying to give up your license. Boards typically want to know whether you have any pending malpractice complaints, and they will want you to agree to make records available to your patients for a certain period after retirement (which varies from state to state). If you are planning a partial retirement, there are often options for restricted licenses. For example, if you plan to do purely administrative work not involving patient contact, you can usually get a limited license that may not require either continuing education credit or malpractice insurance.

Inform your patients

Informing patients of the need to end treatment because of your retirement can be difficult. Accordingly, you should approach it thoughtfully and with plenty of lead time. Depending on your type of case load (medication management and/or psychotherapy), a 6- to 9-month lead time is appropriate. In most cases, you can tell patients in person about your decision while at the same time handing them a letter with referral information. You might decide that an extra degree of caution is worthwhile for select patients: either those at high risk for decompensation or those who are likely to become litigious. For such cases, you should send the letter by registered mail to ensure that the patient receives it. Finally, document in the record that you informed your patient of your retirement, including whether you did so orally, in writing, or both.

Why do I suggest a 6- to 9-month lead time for informing patients? While there are no actual laws or regulations spelling out how much lead time to give patients, 6 to 9 months is an accepted standard of care. This accounts for the fact that it can take a long time for patients to find another physician, especially in areas where psychiatrists are in short supply.

The process of notification and follow-up is very important to avoid a complaint of abandonment, which is legally defined as “the cessation of treatment without a reasonable notification when the patient continues to be in need of treatment.” Although you are not required to ensure that every one of your patients finds another practitioner, you must make a reasonable effort to provide your patients with resources within their geographic area. “Reasonable” is open to interpretation. Providing patients with a list of local prescribers or clinics/hospitals to contact is usually good enough. You can also advise them to contact their insurance company for a list of local providers. Simply asking patients to “find another doctor” on their own usually is not advisable.

Closing a Practice: Some Practical Suggestions

This article originally appeared in:


The Carlat Psychiatry Report
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This article was published in print November 2017 in Volume:Issue 15:11.