Selling or Closing a Medical Practice

A sale can look complete when the buyer has the keys and the seller's bank account has closed. The harder work starts when a pathology result arrives, a patient needs a record, or an allegation concerns care from before the sale. Separate the clinical handoff, record-access plan, entity wind-down, and insurance reporting route before the final patient date.

Notify patients before care ends

When a physician ends a physician-patient relationship, Medical Board guidance recommends written notice of the change and final date of availability, record-storage and access information, and help transitioning care. The page also carries California Medical Association guidance about delivery methods and inactive patients. Apply that guidance to the actual closure or transfer facts; do not assume a practice sale alone completes each patient handoff.

The transition notice or patient communication should state:

The final date for scheduled care.
Where patients can continue care.
Who will hold the records.
How patients can request or transfer records.
Who will receive pending results, messages, and refill requests.

Include the authorization form needed to transfer records when applicable. The same guidance recommends at least 15 days of emergency treatment and prescriptions before availability ends when the physician terminates the relationship.

For each unfinished test, pathology result, referral, postoperative visit, prescription, and patient message, identify the clinician or service that accepts the next decision, the record route, and the escalation path if the handoff fails. An office closure is not a clinical handoff plan.

Records outlive the entity

California Business and Professions Code section 2266 requires adequate and accurate patient records for at least seven years after the last date of service. Each patient's retention period begins on that patient's last service date.

Identify the records custodian before the transaction or closure. State:

Where paper and electronic records will remain.
How patients request access or transfer.
How former clinicians and insurers can request records for a later claim or reporting review.
How pending results and messages reach the responsible clinician.
How long backups, audit logs, and vendor access remain available.

The buyer may take custody under the sale agreement. A separate custodian may hold records after a closure. Compare the patient communication, custody agreement, system permissions, and actual contact route so they do not send patients to different places.

Before ending an electronic health record contract, test export, indexing, retrieval, and patient-request workflows. Preserve any access needed for open results, legal requests, and policy reporting.

Separate seller care from buyer care

The sale agreement can identify which duties the buyer accepts and which duties remain with the seller. It cannot by itself make the buyer's malpractice policy cover the seller's prior care.

Record the seller's final patient date, final call shift, policy end date, and tail deadline. Record the buyer's coverage date and first patient date separately. If the seller continues working for the buyer, identify when the employer, entity, and policy change.

Keep the seller's policy history, loss runs, claim contacts, and records-access route. Give the buyer's insurer the actual clinicians, entities, services, locations, procedures, and first work dates; then compare the issued terms with those facts.

Preserve claim reporting for prior care

An occurrence policy remains tied to covered care provided during its policy period. Keep each occurrence policy and its claim contact.

A claims-made policy may need a reporting route after it ends. Tail may extend reporting under the old policy. A carrier retirement benefit may provide a reporting option when the physician meets its written conditions. Claim definition, notice, retroactive or prior-acts conditions, insured status, exclusions, and other policy terms still apply. Read retirement and tail coverage.

Include the professional entity in the review. A physician's extended reporting endorsement does not automatically protect a separate entity named in a later claim.

Review known claims and circumstances before the active reporting period ends. Follow the policy's required recipient, method, content, and deadline for a qualifying report. Keep evidence of submission and receipt; neither decides coverage.

Close the entity last

Do not treat dissolution paperwork as the end of the plan. Before winding down a professional entity, identify who will hold patient records, policies, contracts, receivables, deposits, leases, equipment, and each continuing operational or reporting task. Obtain California legal and tax advice for the actual entity and transaction.

If the professional corporation carried entity coverage, identify the potential reporting route for later entity claims. Review any offered extended-reporting endorsement and its deadline before the policy ends. Read who pays for tail after employment ends.

Keep coverage and custody records after the sale or closure

Keep the final timeline, patient notices, delivery proof, records agreement, and unfinished-care handoff. Keep the historical policies, tail endorsements, loss runs, claim contacts, sale or closure documents, and entity records.

These records should let a later reader find the policy documents, records custodian, current clinical owner for any unfinished item, and reporting contact without reconstructing the sale from email.