GUIDANCE FOR PHYSICIANS WHEN CLOSING A MEDICAL PRACTICE

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2 2 INTRODUCTION 3 PRIVACY LEGISLATION AND RETENTION PERIOD 3 BEYOND PRIVACY LEGISLATION 3 NOTIFYING PATIENTS OF CLOSURE 4 OTHER NOTIFICATIONS OF CLOSURE 5 CLOSING A GROUP PRACTICE 6 NOTIFICATION TO EMPLOYEES 6 OFFICE FURNITURE AND EQUIPMENT 7 DISPOSAL OF DRUG SAMPLES 8 TRANSFER AND ACCESS TO MEDICAL RECORDS 8 STORING MEDICAL RECORDS WITH COMMERCIAL STORAGE COMPANIES 9 AFTER THE PRACTICE CLOSES 9 REFERENCES 9 OTHER RESOURCES 9 SAMPLE LETTER TO PATIENTS WHEN CLOSING A MEDICAL PRACTICE TRANSFERRING MEDICAL RECORDS TO ANOTHER PHYSICIAN 10 SAMPLE LETTER TO PATIENTS WHEN CLOSING A MEDICAL PRACTICE NO TRANSFER OF MEDICAL RECORDS 11 Digital format created from the original with the permission of MD Physician Services Inc. Originally developed by and in partnership with:

3 INTRODUCTION LESSON 1 KEY LEARNING POINTS Importance of Notifying Patient of Closure Importance of Notifying Other Key Stakeholders of Closure Transfer and Access to Medical Records Retention of Medical Records A physician may close a medical practice by: selling the practice retiring relocating Regardless of the reason to close a practice, physicians must comply with a number of laws and regulatory requirements, such as retaining a patient s medical records, notifying patients, the College of Physicians and Surgeons of Nova Scotia (CPSNS) and Doctors Nova Scotia about the closure of the practice, and providing information on how to obtain access to the patient records and storage requirements. This document provides an overview of the guidelines and policies of the College of Physicians and Surgeons of Nova Scotia for closing a practice. PRIVACY LEGISLATION AND RETENTION PERIOD While there are no provincial or federal privacy laws indicating the specific timeline with respect to retention of patient medical records, the governing principle is that physicians should safeguard and protect health records in the following manner: Physicians should maintain a written policy outlining the retention and destruction of the health records The Federal Personal Information Protection and Electronic Documents Act (PIPEDA) states that organizations must develop minimum and maximum retention periods. Both federal and provincial legislation generally state that personal information must be destroyed when retention is no longer necessary for legal or business purposes. Information cannot be held indefi- 3 nitely and where information must be held for a long period of time, the retention must be justified. In addition, the Canadian Medical Protective Association (CMPA) recommends the retention of medical records for 10 years for adults, and 10 years from the time a minor reaches the age of majority (19 in Nova Scotia). BEYOND PRIVACY LEGISLATION The CPSNS and the CMPA have guidelines outlining the retention period of medical records, but physicians must be aware that they will have to meet any statutory requirements in Nova Scotia. Where the statute is silent on retention, physicians may look to the CPSNS guidelines and policies. CMPA guidelines, although not directly enforceable in law, provide

4 physicians with a framework in the event of future litigation. Sources of information include the following: Payment eligibility for APP physicians is based on shadow billings so it is important that the billings are AS ACCURATE AND COMPREHENSIVE AS POSSIBLE. (1) College of Physicians and Surgeons of Nova Scotia Guidelines: The CPSNS recommends a minimum of ten-year retention period from the date of the last entry in the record for adults and for patients who are children, physicians should keep the record until ten years after the day on which the patient reach or would have reach the age of 19 years (the age of majority in Nova Scotia). For Electronic Medical Records, the same retention period applies and physicians who have not transferred their records to another physician must keep a copy of the records electronically and provide access to the medical records if requested by the patient. The plan to provide ongoing access will differ based on the physician s EMR vendor and solution. Physicians should refer to their EMR license agreements to understand their contractual obligations. Please refer to the Other Notification of Closure section of this document for further information regarding notification. (2) Canadian Medical Protective Association: CMPA recommends a ten year retention period and further recommends physicians to retain original records of patient health records including appointment books and telephone logs. (3) Medical Associations: Doctors Nova Scotia has outlined retention requirements but refer physicians to the applicable CPSNS guidelines. NOTIFYING PATIENTS OF CLOSURE CPSNS state that physicians must notify patients that they will be closing their practice and provide instructions on how patients may obtain their medical records. CPSNS (website: has guidelines for closing an office, they are: Guidelines for Retiring Physicians Regarding Licensing and Notifications Guidelines for Medical RecordKeeping Advertising and Public Communications by Physicians Responsibilities When Closing a Medical Practice The CPSNS guidelines and policies provide more comprehensive information on notifying patients of closure than this lesson. Physicians are encouraged to read their guidelines and contact the College if you have any questions at (902) Where possible, it is recommended 4

5 5 that patients be notified in person, by letter (See sample letters attached) or by telephone. Another option is to place a notice in the local newspaper and at the office to announce the retirement, the date of the retirement and where patients may receive copies of their records (if required). If another physician is assuming the practice, the letter to patients should include an introduction to the new physician. If another physician will not be assuming the practice, it is appropriate to assist patients in finding another physician by providing them with a list of physicians in the area who are accepting new patients, although this may not always be possible. The retiring physician should be willing to discuss referrals to other doctors with patients. The retiring physician should also arrange for someone to receive lab reports, pathology reports, etc., which are outstanding upon retirement. This individual should be willing and able to act on them. OTHER NOTIFICATIONS OF CLOSURE Physicians must notify the CPSNS when they cease to practice/relocate and provide the location of the patient s health records. Sample letters to patients is included at the end of this document. Key stakeholders physicians should notify about a practice closure include: Employees Colleagues (and/or partners) Medical Services Insurance of Nova Scotia (MSI) (902) College of Physicians and Surgeons of Nova Scotia (902) Doctors Nova Scotia (902) Canadian Medical Association Canadian Medical Protective Association District Health Authorities Hospitals where privileges are held Nursing homes Referring and consulting physicians and surgeons On call group

6 Pharmacies Prescription Monitoring Association of Nova Scotia (Physician should contact PMANS directly (902) to arrange for the proper disposal of any unused triplicate prescription pads) Lawyer, tax accountant, financial advisor, banker, insurance agent, etc Landlord Municipal tax office (particularly if a residential dwelling is utilized for the practice) Canada Revenue Agency (employee payroll and your HST account, if applicable) Telephone, utility and Internet service providers Janitorial service Canada Post Credit and debit card companies Fringe benefit plan provider Medical and office supply vendors Laboratories EMR Vendor see note. NOTE: If you are a Nightingale/PHIM EMR user, send notification in writing to PHIM Service Delivery Manager (Mr. Andrew Munn), Nova Scotia Department of Health and Wellness, 5161 George Street, Halifax, Nova Scotia, B3J 1M7 and copy Brent Andrews and Derek Stewart, EMR Advisors, Doctors Nova Scotia, 25 Spectacle Lake Road, Dartmouth, Nova Scotia, B3B 1X7. If you are a Practimax, Clinicare or other EMR user, notify your EMR vendor and/or your EMR hosting service provider in writing (as per your license agreement) and copy Brent Andrews and Derek Stewart, EMR Advisors, Doctors Nova Scotia, 25 Spectacle Lake Road, Dartmouth, Nova Scotia, B3B 1X7. of notice should be stated in the agreement. In the absence of such an agreement or clause, it is ideal to plan the closure of your practice with the expiration of the current lease so that colleagues can make arrangements to secure new space, downsize the existing premises, or recruit another physician. Refer to the Termination of Cost-sharing arrangement section in the Lesson Advice for physicians working in cost-shared joint practice under the Course Managing a Practice - on the Business of Medicine website (www. com/en/businessofmedicine/courses/ managingapractice) for a number of issues to address when closing a group practice. CLOSING A GROUP PRACTICE If a physician is in a group practice and has executed a formal (associates or partners ) agreement, the length NOTE: If the Advice for physician working in cost-shared joint practice is not under Managing a Practice, it will be shortly. 6 NOTIFICATION TO EMPLOYEES The minimum notification (or pay in lieu of notice) to employees is established in Labour Standards Code of Nova Scotia and is based on the number of years of employment. If the employee has worked: 3 months or more but less than 2 years they are entitled to a minimum of 1 week notice or pay in lieu 2 years or more but less than 5 years they are entitled to a minimum of 2 weeks notice or pay in lieu 5 years or more but less than 10 years they are entitled to a minimum of 4 weeks notice or pay in lieu 10 years or more they are entitled to a minimum of 8 weeks notice or pay in lieu It is strongly recommended that the notice period (or pay in lieu of notice) is greater than the minimum required

7 and that you consult with a lawyer who has experience in employment law for advice. Some employees may be needed even after the closure to complete the transfer of records, reconcile billings, etc. If another physician is to become the employer, it is important to know that the Labour Standards Code says that an employee s employment is not broken if a practice is transferred or sold in any manner. If an employee worked for both the seller and purchaser of a practice, he or she may be entitled to a notice that the job is ending or pay in lieu of notice based on how long the employee worked with both the past owner and the person who bought the practice. OFFICE FURNITURE AND EQUIPMENT If another physician is taking over the practice, the current market conditions suggest that, unless there are unusual circumstances, goodwill (that is the value of the practice beyond the physical assets) is not a consideration. Typically assets are transferred at one of three values: the market value, which can be established by consulting with sales personnel from medical and office furniture and equipment vendors; the book value, which could be the value recognized in your accounting records; or what the seller is willing to accept and what the buyer is willing to pay. compliance with the Food and Drugs Act and Medical Devices Regulations, regulated by Health Canada. Section 26 of the Medical Devices Regulations(SOR/98-282) states that no person can import or sell a Class II, III or IV medical devices unless the manufacturer of the devise holds a license in respect of that device. Information on medical device classification can be found by contacting device licensing division of Health Canada at: gc.ca/eng/regulations/sor / index.html Other options for the disposition of furniture and equipment include advertising in medical journals, listing items with Doctors Nova Scotia, posting notices at health care facilities, etc. Note that certain equipment may be considered medical devices and the sale of devices must be in Ideally, if leasing equipment, the lease termination date will coincide with the closure of the practice. If not, the vendor may consider a buyout or will require that the lease terms be honoured. Transfer of the lease or subleasing the equipment to the physician who is taking over the 7

8 practice are additional options. DISPOSAL OF DRUG SAMPLES The disposal of all health products must be undertaken with sufficient care to avoid contamination of local water and ground systems. The disposition must be thorough, with due regard to environmental considerations, and other municipal, provincial and federal legislative requirements. The disposition of drug samples can take many forms: if there is a physician successor, he/she may take custody of them; they may be returned to the appropriate pharmaceutical representative; the company that removes medical waste and sharps can, in some instances, dispose of them; a pharmacy may handle their disposal; or the local police force may have to be consulted. Please refer to the Controlled Drugs and Substances Act (CDSA) and associated Regulations for information on disposal or destruction requirements for controlled substances by visiting: index.html (Additional information and links can be found at the end of this document under Other Resources ) TRANSFER AND ACCESS TO MEDICAL RECORDS Continuity of patient care is important and patients must at all times have reasonable access to their records. Some general rules are as follows: Physicians must respect a patient s request to transfer records. Patient records must be transferred in a timely manner. Physicians are able to charge a reasonable fee for copies of the medical records and be willing to explain the fees. A patient s inability to pay for the copies of medical records should not prevent the transfer. Refer to Doctors Nova Scotia s Physicians Guide to Billing for Non-insured Services to determine a reasonable fee. If a patient does not request his/ her records to be transferred, or if the physician has been unable to contact the patient, physicians must first attempt to transfer to another physician in the same office and phone number. Records must not be sold to another physician. Physicians must ensure they have full access to medical records in the event that a liability issue should arise in the future. CMPA recommends physicians keep the original records. Special concerns may exist with 8

9 regards to the transfer of medical records held in an electronic format. Physicians may wish to consult with the CMPA or the electronic medical record provider for more information. STORING MEDICAL RECORDS WITH COMMERCIAL STORAGE COMPANIES If records cannot be transferred to another physician, they may be stored in bonded storage facilities. It is recommended that physicians enter into an agreement with the storage company, with the storage company s responsibilities regarding retention, privacy and security, timely and proper destruction, disclosure, access of records and fee structures clearly laid out in the agreement, including the ability to use sub-agents. Physicians are expected to provide the College of Physicians and Surgeons of Nova Scotia and Doctors Nova Scotia the location of their stored records and the means by which the former patients can access copies of them. Doctors Nova Scotia has negotiated favourable terms with Halifax Transfer for many storage services. The phone number for Halifax Transfer is (902) AFTER THE PRACTICE CLOSES It is a good practice that the clinic telephone number with a recorded message be retained, informing callers that the practice is closed for a period of approximately three months after the practice closure. This message should instruct callers of their options, particularly if they wish to have a copy of their medical record forwarded to another physician. REFERENCES This document was drafted using the following sources as reference: applicable Nova Scotia legislation governing physicians; privacy regime applicable in each jurisdiction; College of Physicians and Surgeons of Nova Scotia s guidelines; and any other sources of information such as the Canadian Medical Protective Association (CMPA). OTHER RESOURCES Disposition of Drug Samples Health Canada - Proper Use and Disposal of Medication National Association of Pharmacy Regulatory Authorities Recycling and Disposal of Dispensed Drugs Health Canada - Office of Controlled Substances; Compliance, Monitoring and Liaison Division. (tel: ) 9

10 SAMPLE LETTER TO PATIENTS WHEN CLOSING A MEDICAL PRACTICE TRANSFERRING MEDICAL RECORDS TO ANOTHER PHYSICIAN 10 Dear Patient: It is with regret that I must inform you that I will be closing my medical practice effective [date] due to [retirement, illness, relocation]. I am pleased to advise you that we are all very fortunate to have Dr. [name] continue this practice and your care, if you so chose. Dr. [name] graduated from medical school at the University of [name] in [year], completed his/her residency training in [discipline] in [year], and has been in active practice since [year] in [name of town/city and province]. Dr. [name] will begin seeing patients on [date]. Your medical records will remain in the clinic and in the care of Dr. [name] unless your written authorization, as is required by the College of Physicians and Surgeons of Nova Scotia, is received to transfer them to another physician. Thank you for the opportunity to be a partner in your medical care and I extend my best wishes to you. Sincerely, Dr. (name)

11 SAMPLE LETTER TO PATIENTS WHEN CLOSING A MEDICAL PRACTICE NO TRANSFER OF MEDICAL RECORDS 11 Dear Patient: It is with regret that I must inform you that I will be closing my medical practice effective [date] due to [retirement, illness, relocation]. Unfortunately, as there is no physician to replace me at this time, I will be storing my medical records by (date) at (name of storage company and address). If you would like to receive a copy of your medical records prior to transferring to storage, I will happily provide this service to you for a small charge at my office. For requests for copies of medical records after (date), please send your request to my home address: (address) Again, there will be a small charge for providing this service for you. The following physicians in this area are willing to accept new patients: Dr (X) (address) Additionally, you could also call the Physician Information Line (Department of Health and Wellness) at to help find other physicians that are accepting patients. Thank you for the opportunity to be a partner in your medical care and I extend my best wishes to you. Sincerely, Dr. (name)

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