Patient Notification During Practice Transition

Abandonment is not a liability issue as long as the physician will be treating the same patient population. It does present a problem if, for example, the physician decides to stop serving some segment of the existing patient population (e.g., patients not covered by certain health plans or patients not covered under some new scope of treatment). In such situations, physicians must notify patients of the practice transition.

Where assets are sold to a practice management corporation, one might argue that no notification is necessary because the asset sale should not, at least in theory, alter the underlying medical practice. The American Medical Association has taken the opposite position. AMA policy states:

When a private medical practice is purchased by corporate entities, patients going to that practice shall be informed of this ownership arrangement by the corporate entities and/or by the physician. (p. 302)

Such notification is consistent with the Principles of Medical Ethics that state "Physicians shall deal honestly with patients. ..." (Id., p. 66) The AMA Council on Member Services noted in 1995 that "there is no conclusive evidence that specific ownership arrangements result in significant differences in utilization," but also noted that an ownership change "has the potential to disrupt the physician's normal, everyday operations, and that such disruption may extend into physicians' relationships with their patients." (American Medical Association, House of Delegates Proceedings, June 18-22, 1995, pp. 249-250.) This is the rationale for the above-quoted policy.

Although the "corporate practice of medicine" case law doctrine in Texas usually results in the selling of the assets of a practice rather than the practice itself, patient notification of medical practice transitions is still advisable in Texas.

When a practice transition involves a physician's affiliation with a larger group, patients who normally received their medical care from a solo practitioner may be confused by the new arrangement. In such circumstances, patient notification of the affiliation also is consistent with medical ethics rules. A physician may place a newspaper advertisement announcing the merger of two medical practices or post a notice in the physician's office to announce an asset sale.

Whether you are planning to retire soon or just considering a professional practice change, TMA's new publication, Transitions: Legal Considerations in Selling or Closing a Medical Practice , will be of interest to you. Written by Hugh M. Barton, JD, the book covers notification of patients and employees, valuation of a medical practice, legal issues in practice sales, retention of medical records, dealing with subpoenas and legal issues after retirement, and information on TMA membership and benefits after retirement.  For information and to order, contact the TMA Knowledge Center at (800) 880-7955.

 

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