Practice Management

Transitioning from your current medical practice: an abbreviated step-by-step guide


 

You have decided it is time to move on from your current hospital or medical group position and transition into a new role. While this decision is exciting and well-earned after years of hard work, it is critical that you make a plan and take specific steps to ensure that the transition is seamless.

The steps below are recommendations to make this process smoother.
 

Step 1: Determine how you are leaving the practice and your proposed timeline

Before anything else, you should decide how you are leaving your practice. Are you leaving the practice of medicine altogether, or are you simply leaving your current position for a different position elsewhere? This distinction will dictate what steps are necessary. Timing is also critical when leaving a practice, as it will dictate what steps should be taken and when. Having specific but realistic goals is imperative. Select a goal date for leaving the practice, but be aware that this goal may need to be adjusted.

Step 2: Create your team of advisers

Whether you are leaving your current practice or transitioning to a different position, it is extremely important to have the right individuals on your team. You should consider enlisting an attorney, a financial adviser, and an accountant to help facilitate the process. Enlisting lawyers with certain areas of expertise, such as in the areas of employment restrictive covenants, health care, or tax, may also be extremely beneficial and helpful throughout the process.

Steven M. Harris
Steven M. Harris

Step 3: Review your current employment agreement

It is quite likely that at the onset of your current employment arrangement, you signed an employment agreement with your hospital or group. You will want to carefully review this agreement, as it may contain provisions that can affect the steps you should take before you leave your current practice and work elsewhere. These provisions include the following:

a) Noncompetition provisions

It is critical to determine whether or not there are any restrictive covenants in your employment agreement that limit where you can work after you transition from your current practice into a new role. Restrictive covenants include noncompetition and nonsolicitation provisions, and prohibit employees from working at certain places or in certain geographic areas after they leave their current place of employment. Rules surrounding restrictive covenants vary from state to state. If there are restrictive covenants in your agreement, be sure to understand the scope of the covenant, including the geographic and temporal scope, as well as the types of medicine you are prohibited from practicing. If the covenants seem too broad or unnecessarily restrictive, consult with an attorney, as overly broad or unduly burdensome covenants are often unenforceable. However, a state-by-state analysis is required.

b) Notice and termination provisions

It is important to review whether or not there are any notice requirements in your employment agreement, which may require you to notify your employer in advance of a departure. Make sure to comply with the time requirements in the notice provision to avoid a breach of the agreement. It is also critical to determine whether terminating an agreement early will result in any termination penalties. At times, employers will impose a penalty if an employee prematurely terminates a working relationship. Understanding the penalties associated with terminating your agreement will allow you to decide whether you want to cancel the agreement and pay the penalty or push back your timeline until the end of the agreement’s term to avoid termination fees.

Step 4: Licensure obligations

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To comply with licensure requirements on your behalf, you will want to determine the license obligations in the state you practice. If you are leaving your hospital job to work in another state, you will want to determine whether you need to become licensed in that new state. If you are transitioning into a nonmedical role, you will want to determine whether you have to change your license status in the state where you are licensed.

Further, if your practice bills Medicare, you will want to file certain forms with Medicare to show that you are either changing your practice location or leaving medicine. For example, if you are leaving the hospital or group to practice elsewhere, you will need to fill out forms in order for your old group to submit claims and receive payments for Medicare services you provided while you were still part of that group. Furthermore, you will need to file reassignment forms to allow your new practice to bill on your behalf. Understanding which forms to complete can be confusing, so enlisting the help of a healthcare attorney may be worthwhile.
 

Step 5: Discuss your transition with your insurance representative

Even after you leave your current practice, you may be exposed to litigation for services you provided while you were employed or otherwise retained by such practice. To ensure that you are protected, discuss your insurance policy with your insurance representative. Review whether your insurance policy is “occurrence” or “claims-made.” If you have an occurrence policy, you are protected from covered incidents that occur during the policy period, regardless if your policy is still in existence. Claims-made policies only provide coverage for claims where both the incident and the claim occur during the policy period. For example, if you cancel your policy on March 1, and are sued on April 1 for an incident that allegedly occurred on Feb. 1, your claims-made insurance policy will not protect you. Therefore, it is important to analyze your policies to determine if tail insurance is needed.

There are a number of other issues you will want to address before you leave your practice, including financial responsibilities and medical record and privacy obligations. To ensure that you leave your practice properly, you should contact an experienced lawyer who can help you navigate this process.
 

Steven M. Harris is a nationally recognized health care attorney and a member of the law firm McDonald Hopkins LLC in Chicago. Write to him at sharris@mcdonaldhopkins.com.

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