Dr. 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.
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.
How much should you tell your patients about why you are retiring? It’s up to you; you can provide as much or as little personal detail as you judge to be appropriate. As is true in any clinical situation, you should be aware that some patients may not deal well with overly detailed disclosure about your personal life. You might want to plan additional sessions to help some patients deal with the transition.
Make records available to patients and subsequent treaters
If patients request it, offer to send a copy of their records to a new treater, although it’s more common for new clinicians to request records from you once they see your patients. Make sure to send copies only, and retain the original record in your files.
How long should you retain patient records? While regulations may vary by state, most boards of medicine require that you retain all patient records for at least 7 years from the date of the last patient encounter (if the patient is a minor, the rule is 7 years or up to age 18, whichever is longer).
In addition to storing records, you have to arrange a way for patients to access those records for the 7-year period. If you have an electronic medical record, this can be an easy process. But if you use paper records, you may have hundreds or even thousands of charts. How should you arrange for access in this situation? Here are three options for managing your records after retirement:
1. The best way is generally to keep your own records and to respond to requests for access the same way you always have. To keep things manageable, destroy records that are beyond the 7-year cutoff date, although you should maintain a list of destroyed records, along with a brief comment about the patient and the date of the last clinical encounter.
2. If you are unable or unwilling to be the keeper of your records, you can ask a colleague to maintain them for you. If you’re lucky, your colleague will do this for free, but otherwise you should agree on a fee in advance—both for the colleague’s trouble and for the costs of preparing and mailing records.
3. Finally, there are professional records management companies, such as Iron Mountain, that will do everything for you for a fee. Make sure any company you enlist is HIPAA-compliant.
Note that different states dictate different allowable charges for handling and copying of records; check with your board of medicine. If records are requested for a Social Security claim, you are usually not allowed to charge for them. It’s also a good idea to retain your business records, such as tax returns, office bills, etc, for a minimum of about 6 years.
Know rules for malpractice protection after retirement
If an alleged incident of malpractice occurred during active practice, retirement does not protect you against the claim. Accordingly, maintaining malpractice insurance for a period after retirement is an absolute necessity. How long depends on the statute of limitations in your state.
Insurance policies vary, and you should consult with your malpractice insurer as soon as you have decided to retire to discuss your options for post-retirement coverage. If you have a so-called “occurrence” policy, that policy will provide coverage for all claims based on acts that “occurred” when the insurance was in effect, regardless of when the claim is actually made. If you have this kind of policy, you wouldn’t have to continue active coverage after retirement. But if you have a “claims made” policy, you’re covered only if the insurance is in place at the time the claim is filed. In that case, you would need to pay for a “tail” insurance policy.
An unplanned retirement generally occurs due to death or illness. While this is a topic most of us would prefer to avoid, setting up a detailed plan in the event of your untimely demise will help your grieving family and friends to deal with the logistics of closing your practice.
Helpful retirement resources
The American Psychiatric Association (APA) has developed a number of helpful practice resources for clinicians on the topic of retirement. Although these resources are generally available only to active members of the APA, the organization has graciously agreed to make them available to readers of The Carlat Psychiatry Report. Because these materials were originally written in 2007, we have updated their checklists and templates to make them more relevant to current practice environments. We have also added several new templates to make your transition to retirement even easier. For the planned and unplanned retirement toolkits, please see: http://thecarlatreport.com/RetirementToolkits