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.
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.
Records of adult patients should be retained for seven (7) years after a practice closes. Records of minor patients must be kept at least one year after the minor has reached the age of 18 years but no less than seven years.
Set aside for destruction and disposal the paper records and radiographs of those patients not seen for 7 years or more. Radiographs must be separated from paper and managed as potentially hazardous waste (silver). Xray film recyclers can be identified through an internet search. If dental practice is a HIPAA covered entity, it must have business associate agreements with any vendor that handles patient information.
Ensure the privacy and security of stored records as state and federal privacy laws remain applicable to you even after you retire. After the retention period has passed, destroy the records so the information contained therein is unreadable.
If electronic health records were used, determine when to end use of the software. Consider that patient records must still be available to you after practice closure in case of malpractice claims. Discuss with the software company their recommendations for securing an archival copy of the software and all documentation. For more information, see “Transition Issues” from The Office of the National Coordinator for Health Information Technology.
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.
If electronic records were used, work with new owner on transfer of the software license.
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 (EDD) and to the IRS. See “Termination Checklist and Final Pay Explained.” for timing and documentation requirements.
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. You must inform the board of all places of practice or that you have no place of practice within 30 days of the change. 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.
A dentist who has practiced dentistry in California for 20 or more years and has reached the age of retirement under the federal Social Security Act, is eligible for the board’s reduced fee program. If qualified, a dentist can apply for “retired active” or “retired inactive status.” Retired active status allows a dentist to continue to practice dentistry but only for free or for a nominal charge; continuing education units are still required. Retired inactive status does not require continuing education and the dentist may not practice unless they reactivate the license. For more information and applications, visit the board website.
Formally notify the board if there is no intent to ever practice dentistry again.
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.
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.
Notify practice management software to have license transferred to buyer’s name.
Use an authorized “reverse distributor” to dispose of controlled substances; the drugs may not be transferred to another practitioner. Contact the local office of the U.S. Drug Enforcement Agency to obtain a list of reverse distributors. Maintain documentation of the transfer/disposal of the controlled substances.
Destroy unused secured prescription pads. The Department of Justice will automatically end a dentist’s access to CURES once it has been notified by the Dental Board of the dentist’s status.
Review all existing contracts with service providers, equipment lease agreements, and others to initiate termination clause or transfer. If you are selling the practice, confer with the buyer on those contracts that can be transferred. An exhibit to the sales agreement should list all of the contracts that the buyer will assume pursuant to the purchase of the practice.
Notify utility companies of the effective date of closure or ownership change and where to send final bills. If you are selling the practice, ensure that there is no interruption to utility services.
Notify landlord or tenants as applicable and per terms of any agreement.
Notify malpractice, business, and other insurance companies where you have coverage. Retiring dentists should consider maintaining malpractice coverage or obtaining a tail policy providing coverage for all prior acts, which may be a requirement of the purchase agreement.
Notify suppliers and service providers (dental labs, bookkeepers, janitorial, waste haulers, etc.).
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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