A dentist may separate from practice for one of many reasons. A dentist may retire, leave a group to go into solo practice (or vice versa), sell the practice, or relocate. Likewise, a dentist’s family may close or sell a practice because the dentist has died or become permanently disabled. Use this checklist as a guide. This list offers general information and does not take the place of legal advice. This list is not exhaustive and each item may not be applicable to every situation.
Review your contracts and provider handbooks for information on what you need to do to withdraw from participation in dental benefits plans and government benefit programs. Many contracts require a 30 - to 90- day notice to terminate. Each plan has its own requirements.
Review the dental plan participating provider agreement or plan provider handbook to learn when you must notify the plan regarding the practice sale or closure. Most dental plans require the contracted dentist to notify the plan of the sale/closure within 30 days from the close/date of the sale. This applies whether the selling dentist plans to continue working in the practice or exit the practice entirely.
To avoid patient claims of abandonment, a dentist who is separating from practice (or the family or estate of a deceased or permanently disabled dentist) has the responsibility of notifying patients in writing of the separation and giving them a reasonable amount of time to find another dentist.
State law requires patient records to be retained for seven (7) years after a practice closes or seven (7) years after a minor reaches the age of majority in the case of minor patients. Ensure the privacy and security of stored records as state and federal privacy laws remain applicable to you. After the retention period has passed, destroy the records so the information contained therein is unreadable. Patient records may not be sold without the sale of practice unless patient authorization is obtained.
Although the HIPAA Privacy Rule allows the use and transfer of patient information to relevant parties who need that information for health care operations, which includes practice sales, state law does not include the same provision. In the transfer, sale, merger, or consolidation of a dental practice, it is therefore prudent for the selling dentist to obtain written patient authorization prior to allowing a potential buyer or partner to view charts. The absent provision in state law also means that a new practice owner should stay on the safe side of the state’s privacy laws and obtain written patient authorization before using a patient record. If a patient sets an appointment to be seen by the new owner, this action is viewed as an implied authorization that allows the dentist to view the record before the patient presents.
In the transfer, sale, merger, or consolidation of a dental practice, the new owner may agree to have custody of patient records (the alternative is that the former owner retains the records). As the custodian of records, the owner is legally responsible for ensuring the contents are secure and, if the records are to be destroyed, ensuring the contents are unreadable.
The original and new owners of the practice should come to an agreement regarding the disposition of inactive patient records. They should agree on terms for providing the original owner access to the records if there arises a patient claim or dispute regarding treatment. Also, they should agree upon terms relative to the retreatment of patients treated by the original owner. The original owner should retain a list of patients whose charts are acquired by the new owner, but shall not utilize the list for any purpose in violation of the sales agreement.
Provide employees with a firm date for when you will separate from practice. How much notice to give employees depends on circumstances—whether closure occurs in phases or right away or if the practice will transition to a new owner.
If closure is to occur in phases, expect that some employees may leave before you are ready to let them go.
Even if the practice buyer plans to retain employees, you are responsible for finalizing employee termination, final pay requirements, submitting final forms and tax payments to the state Employment Development Department and to the IRS. See “Termination Checklist.”
Submit final forms and tax payments to the state Employment Development Department (EDD) within 10 days of separating from practice. See this EDD website for more information. Federal taxes also must be paid. Consult the IRS checklist for closing a business.
Employee medical records must be retained for 30 years per Cal/OSHA requirements. After that period, destroy the records so the information contained therein is unreadable.
Certain employee records must be retained for a period of time, dependent on the type of records. Review “Records and Documents Retention Guidelines” for specific timelines.
Notify Cal/OSHA Pressure Vessel Unit of practice closure or change in practice ownership.
In most jurisdictions, the sale of a business requires the new owner to obtain a new business license. Contact the appropriate city or county business license office for specific local requirements.
Notify the Dental Board within one month of selling or closing the practice. Dental Board-issued permits, such as fictitious name permits, are not transferable to the new owner. Return any Dental Board-issued permits with a completed Cancellation of Permit form. If you intend to use the permits at a new location, notify the Dental Board. The Dental Board may require a new application and evaluation, depending on the type of permit.
DEA registration numbers cannot be transferred. Notify the DEA of practice closure or of new practice addresses. Send written notification of practice closure, the DEA Certificate of Registration, and any unused Official Order Forms (DEA Form-222) to the nearest DEA field office. A link to a list of DEA field offices is below.
Once assigned, an EIN cannot be canceled or transferred. If a business closes, or never gets off the ground, the IRS can close the business account associated with the EIN. If you are merely relocating a practice, a new EIN may not be necessary. See this IRS website for additional information and consult with your accountant.
Properly dispose of any hazardous waste. Notify the state Department of Toxic Substances Control of discontinued use of California EPA ID number. The EPA ID number is site-specific.
Complete and file a “Letter of Disassociation for a Fictitious Name Permit” form, available on the Dental Board website. Also, file a statement of abandonment of the fictitious name with the county clerk and publish the statement in a local newspaper. A dentist who separates from a general partnership using a fictitious name must file a letter of disassociation with the Dental Board and file a notice with the county clerk.
Properly dispose of any medical waste. Notify the local enforcement agency or California Department of Public Health of practice closure or change of ownership.
Notification of dental benefit plans and government benefit programs of your withdrawal from practice is sufficient. If you intend to continue practicing dentistry as an employee or volunteer, you should retain your individual NPI number.
Notify the Department of Public Health Radiologic Health Branch of the practice ownership change and disposition of X-ray machines.
Notify the California Department of Tax and Fee Administration of practice sale or closure by using the Update Registration Information/ Notice of Business Change form.
Notify the local sanitation district in writing of the practice’s sale or closure.
A list of equipment and furniture should be included in the sale or transfer documents. Equipment maintenance records are beneficial to the new owner. Supplies at a customary level of thirty (30) days for the practice should also be included in the sales agreement. Any excluded items should be included in an exhibit to the sales agreement.
Ensure proper disposal of the waste. Notify local enforcement agencies of practice closure or sale.
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