A common question asked of LAMMICO representatives is what to do when a physician makes the decision to close a medical practice. When this significant change occurs, there are procedures and responsibilities that must be carried out by the policyholder. Whether changes occur as a result of a policyholder’s retirement, death or practice relocation to another community, the responsibilities remain the same. Healthcare providers must allow time for patients to make arrangements for continued medical care. They must comply with state law on managing medical records and take steps to avoid charges of patient abandonment.
When guiding a physician through the closing of a practice, we typically hear questions such as:
1. I am retiring from practice. What steps must I take to notify my patients?
Avoid scheduling any new patients or procedures for at least two months prior to retirement and give your patients 60 days notice prior to closing the practice. LAMMICO provides sample form letters to mail to your patients that can be obtained from your local LAMMICO Risk Manager. Post the information in your office and verbally notify patients who call in or come into your office. Notifications should include all of the following: the date the practice will close; name of physician taking over practice, if applicable; names of physicians willing to accept new patients or other sources of physician referral; and instructions for obtaining medical records or having them transferred to another physician.
2. My practice is moving out of state. Does LAMMICO's coverage automatically follow me?
LAMMICO’s coverage does not automatically transfer if you move out of state. Please contact your Underwriter or agent to discuss the possibility of continuing coverage with LAMMICO as well as any potential rate changes and new exposures. The last thing you want is a lapse in coverage. It's crucial that you notify your Underwriter or agent of any changes to practice personnel, the use of telehealth and especially inter-state activity.
LAMMICO underwrites policies in Louisiana, Arkansas, Mississippi and Tennessee. Through our Risk Retention Group, we may be able to secure your coverage in other states - but you'll want to speak with a knowledgeable Marketing Representative first.
3. Do I need to purchase "Tail" insurance coverage when I retire?
Occurrence policies do not require extended reporting endorsements (tails) if coverage is discontinued. This is because if the insured event occurs during the policy’s period, then coverage under the Occurrence policy applies regardless of when the claim is made.
Claims-Made policies, however, do require the purchase of tails if the coverage is discontinued. This is because the policy only covers claims that are made during the policy period. The “tail” claim must be from a medical incident occurring prior to policy termination that occurred on or after your retroactive date and before the end of your policy’s termination date. Future claims may arise and be first reported after the termination date of your Claims-Made policy. A reporting endorsement or tail provides insurance for covered losses arising after your retroactive date and reported after your policy’s termination date.
The LAMMICO Claims-Made policy includes a waiver of the reporting endorsement premium if the policyholder dies, becomes permanently disabled, or if the policyholder decides to permanently retire from the practice of medicine while the claims-made policy is in force. With respect to the retiring practitioner, certain age and years insured requirements apply.
For a refresher on the difference between Claims-Made and Occurrence policies, click here.
4. Sadly, our physician partner has passed away. Can office staff release medical records to the patients?
No. Do not release original records. Louisiana state law requires that original medical records be retained for six years after the date of the last treatment. There must be a designated custodian of the records with arrangement for storage, safekeeping and access for release of records. The federal government may audit records of beneficiaries (Medicare and Medicaid) for 10 years. In the case of pediatric patients, the Louisiana State Medical Society recommends keeping records until age 21. Notify the patients that photocopies of the medical records will be available to them or to the physician of their choice. Obtain a signed medical release from the patient before providing copies. Sample HIPAA-compliant medical release forms are available through your LAMMICO Risk Manager.
5. Who else should be notified of closing a medical practice?
The LAMMICO Underwriting Department, hospitals with whom the physician has privileges, the Louisiana State Board of Medical Examiners, the Louisiana Board of Pharmacy, the Federal DEA, managed care companies with whom the physician has contracts, other insurers and business contacts, the Louisiana State Medical Society and other professional medical organizations. While this list is a good place to start, there may be others unique to your practice, so we recommend speaking to your LAMMICO Risk Manager to obtain an assessment of your best next steps.
If you are facing these kinds of changes within your medical practice, we highly encourage you to contact your LAMMICO Risk Manager to request a checklist and sample medical practice closure forms and let them answer any questions you might have during this time of transition. LAMMICO policyholders may also log in as a Member on lammico.com to access their “LAMMICO Risk Management Reference Guide” for supplemental information.