Checklist for Closing Your Practice
by Corporate Relations and Business Strategy Staff
March 15, 2005 -- Whether you are relocating, making a career change, taking a new position, or winding down and retiring, closing a practice brings with it a variety of clinical, ethical, legal, and business obligations. Advance planning can help make this a smooth process and minimize the likelihood of unforeseen difficulties.
The items listed below serve as a basic checklist of actions and considerations you may need to attend to when closing a psychology practice.
Getting Started
___ Talk to your accountant and attorney about your plans *
___ Contact your licensing board regarding compliance with state-specific ethical, legal and professional obligations. If you are a member of your state, provincial or territorial psychological association (SPTA), contact the SPTA as well for this information.
___ Start a list of tasks -- begin with this list and add/delete items to fit your practice
___ Set a time frame that balances your needs with those of your clients and staff
___ Stop taking new cases/referrals
___ Contact the APA Ethics Office and the APA Practice Organization with other questions as they arise
Clients and Their Records
___ Inform your current clients – be sure to leave adequate time for termination or referral
___ Talk to the psychologists to whom you will refer clients who need ongoing treatment – find out about their availability, insurance accepted, location, office hours, and areas of expertise
___ Ensure continuity of care by providing referrals to clients who require ongoing services and helping them with the transition
___ Obtain informed consent and transfer a copy of your clients' records to the new providers
___ Inform your clients other health care professionals and keep them up-to-date on the status of closing your practice.
___ Attempt to notify your past clients. There are a number of approaches you might take, including sending a letter and/or placing a notice in the local papers of the area you serve, on your website and in other community forums. Be sure to include information about how to contact you or access client records.
___ Make arrangements for secure storage of client records. Recordkeeping requirements vary by state, so check with your SPTA and/or licensing board to ensure you will be in compliance. If control of your client records will be handled by another psychologist, be sure to obtain adequate consent.
___ After securely storing the records you are required to maintain, clear any electronic protected health information off computers, PDAs, and cell phones. See information about the Health Insurance Portability and Accountability Act (HIPAA) Security Rule for requirements regarding record storage and destruction.
___ Create or update your professional will
Finances
___ Talk to your attorney and accountant to determine whether selling your practice is a viable and worthwhile option. Also be aware of ethical issues related to selling your practice, and seek appropriate consultation as necessary.
___ If selling your practice, decide whether to work with a broker to help you navigate this potentially complicated process that requires a sophisticated understanding of local and state laws, business valuation, marketing strategy, tax implications and contracts
___ Collect any accounts receivable
___ Pay off any outstanding debts
___ Work with your accountant to organize your financials records (e.g., financial reports, tax documentation, contracts)
___ Talk to your accountant and/or tax professional about the tax implications of closing or selling your practice and strategies to reduce your tax liabilities
___ Once all of your finances have been reconciled, close bank accounts associated with your practice
Business Issues
___ Discuss the arrangements with your partners – if selling or transferring your ownership to your partner(s), be sure to work closely with your attorney to protect all parties involved
___ Inform your office staff far in advance
___ Notify all of your referral sources
___ Inform other professional contacts and relevant entities, including the licensing board in your jurisdiction, professional organizations, insurance panels and other parties with which you contract, your billing and answering services and other practice consultants
___ Talk to your attorney and accountant about the business aspects of closing a practice with your particular legal structure, e.g., corporation, LLC, sole proprietorship
___ If you rent office space, give notice to terminate your lease in the manner and time frame that your leasing contract requires. If you own, take steps to sell or rent your office
___ Sell, donate or dispose of office equipment, such as photocopiers, fax machines, and furniture. Remember that if any of this equipment contains confidential information, that information must be deleted in line with HIPAA requirements.
___ Use up any remaining office inventory
___ Contact the issuers of any business licenses and permits you hold
___ Cancel any utilities (e.g., electric, gas, water, phone, internet) you pay for your office
___ Submit a change of address form with the post office. Depending upon your privacy concerns and where you want your professional mail delivered, you may want to consider obtaining a post office box for a period of time to make sure you do not miss any important correspondence
___ Cancel or forward any publications or subscriptions you received at your office
___ Forward your office telephone number or keep you answering service for a period of time. Place an outgoing message informing callers of your closure and giving instructions for contacting you or accessing their records
Take Care of Yourself
___ With all of the issues to contend with and while focusing on the needs of your clients, it is easy to forget how closing a practice affects you as a psychologist. Be sure to acknowledge and address your own emotional issues related to closing your practice and to take the time to focus on self-care
___ Talk to your accountant or financial planner to ensure you are taking the steps to address your financial needs following the your practice’s closing
___ Call your professional liability insurance carrier – make sure you are covered for complaints filed after you close your practice. If your current policy does not cover this type of complaint, find out about purchasing a “tail” to your policy
___ Review or create a retirement plan to ensure a sound financial future and enjoy the next chapter of your life – wherever it may take you
* Note: The information presented in this document is for informational purposes only. Every practice is unique and will have specific issues that need to be addressed. Psychologists thinking about closing a practice should talk to an attorney, accountant, and other practice consultants, as appropriate.
Download_Closing_a_Practice_Checklist.pdf
(88.85 Kb)
