This post is the first in our new series, Dental Practice Exit Strategy.
Are you closing your dental practice soon? Maybe you’re retiring, and this has been a planned transition. Perhaps you’re merging with another practice, or sudden recent health changes prohibit you from continuing. Either way, closing your practice can be stressful. You have a long list of items to check off your to-do list – let’s get started with these top five.
Individual state laws vary, but generally you should give patients 30-60 days’ notice of your practice closing. You can do this with a mailed letter, posted notice in your office, email, note in invoices, or advertisement in a local publication. Offer to help them locate a new dentist (you should have at least one referral handy anyway) and encourage them to continue treatment.
Do not accept any new patients at this time, and do not begin any treatments you cannot complete before you close your practice. If any patients require extensive treatment beyond the closing date, help them find another dentist who can complete the treatment for them.
Your staff should know about your decision to close the practice before your patients. Notify them in person prior to your settlement date, then provide written notice via email or letter. You’ll need your staff to maintain efficient production right up until the last day, so give your staff incentives to stay on. Incentives could include a bonus, severance pay, flex time, and more. Even so, plan for some of your staff to resign prior to your office closing. You may need to hire temporary employees if this is the case.
If you’re selling your practice to a new dentist, it will be imperative to keep key staff for at least 60 days after the new dentist takes over. Consider offering key staff employment contracts.
The ideal situation is for your patients to stay on with the new doctor. This can be accomplished when you send a letter to patients’ right after settlement to let them know of the transition. The letter should be very positive when introducing the new doctor. If the patient requests their records be transferred, you need to obtain written consent from any patient who is transferring to another dentist. Then, you’ll need to duplicate and transfer their records. Many dentists closing their practice will do this free of charge. Check with your state on any applicable laws, but generally you will have 30 days to produce the record once the patient requests it. Also note that you cannot withhold a patient’s records if he or she is behind on payments.
For any remaining patient records, state laws and regulations vary when it comes to how long you should keep records. HIPAA requires that records be kept for six years; your state may have different requirements. If you’re selling your practice, the purchasing dentist will have the responsibility to maintain these records – and patient confidentiality – going forward.
You can destroy inactive patient records after a certain period of time – your state will have its own laws on this. When you destroy records, we recommend hiring a professional document shredding service that can ensure records are kept confidential and destroyed properly. Ask for a certificate of destruction. Don’t burn any records that contain x-rays.
As for other records – taxes, financial statements, invoices, and so on – check out our for guidelines.
Insurance Carriers and Third Parties
Provide notice to your state dental board, local dental association, insurance representative(s), attorney, accountant, referring specialists, and landlord (if you rent your office). If you’re at retirement age, also contact your local Social Security Administration.
You should cancel workers compensation and employee benefits as of the last day of work for your employees (unless your state’s law differs). Insurance policies that cover the contents and equipment of your practice as well as business liability exposures should be cancelled when the office is sold and/or closed.
Equipment, Supplies, and Medicine
If you plan to sell or donate any equipment or supplies, get a valuation of its fair market value first. Look for new dentists establishing their first practice, dental supply companies, or dentists adding a treatment room. If you donate your equipment to a charity, you can include the tax deduction on your annual return. For medications, visit this link for information on disposing of prescription drugs and narcotics.
Finally, you’ll need to decide how you want to approach delinquent accounts: speed up the collection process, write off a portion of the debt, or hire an outside collection agency to take up the payments.
This information is meant to guide you as you begin the process of closing your dental practice. Due to the complexities and varying state and federal laws, we strongly recommend assembling a transition team – starting with your CPA and dental broker. Contact us for more information, and stay tuned for more posts in our Dental Practice Exit Strategy series.