Questions to consider before leaving your medical practice
Like a personal relationship, leaving a medical practice is generally more complex than initially contemplated. If you are considering a split from a medical practice, there are a number of practical issues to consider.
1. Where do your existing patients go?
It is generally understood that “free choice of physicians is the right of every individual.” AMA Code of Medical Ethics Opinion 9.06. This necessarily means that upon departure your patient base is free to either leave or stay at the existing medical practice because of convenience or location. However, whether you as the departing physician can continue treating the same patient base is another story, depending upon your contractual relationship, if any, with the existing practice.
2. Who owns the intellectual property associated with your practice?
If the medical practice features a brand name, a long-time existing phone number, and distinctive logo these types of items have value. So, when departing, the question that must be asked is – “who owns this stuff?” The answer is not simple and depends upon a number of things. When leaving a medical practice you should not presume that your old telephone number, for example, is going with you.
3. Who owns patient records?
Who takes and maintains the entire patient chart could depend on your contract with the medical practice. However, as a departing physician you are legally entitled to a copy of the medical records you personally created. The importance of this issue cannot be understated because there is both a legal responsibility and significant expense to maintaining medical records.
4. Who pays expenses and what about open receivables?
Medical practices have a laundry list of on-going expenses such as equipment leases, rent and supplies. This list begs the question of what happens to those long term obligations upon your departure or the closure of the existing medical practice? Another practical question is whether there are personal guarantees for any of the practice’s financial obligations. Upon departure, these issues need to be addressed.
5. What do your existing contract(s), if any, say about departure?
If the medical practice has an Operating /Shareholder’s Agreement or you have an employment agreement (sometimes both), these documents must be consulted. Often times these documents address some of the issues above. In addition, there also will be questions about tail coverage, as well as whether you are subject to restrictive covenants (non-compete and non-solicitation).
Indeed, this is not an exhaustive list of considerations, but is solely meant to highlight just a few of the issues for consideration before departing a medical practice. Many of these items obviously present legal and financial considerations that should be considered before taking any step in a different direction.
