Prepare for Retirement Short-Term
Published on: Feb 7, 2019
As a medical practitioner, once you decide to retire, there is a to-do list that you should follow to ensure a stress-free post-work life. If retirement is right around the corner, these steps can help with your impending transition out of practice.
- Make Sure You Are Insured
It is good practice to review your insurance or indemnity arrangements on a regular basis as well as whenever your terms of employment change. Failure to inform your insurance provider of any change in your circumstances, including retirement, may invalidate your policy. Physicians will have one of two types of insurance:
1) Occurrence Based Insurance
Occurrence coverage (www.medpro.com) policy limits remain in place after the end of the policy period to pay claims arising from healthcare incidents occurring during the policy period. Occurrence coverage is triggered the moment treatment occurs, regardless of when an eventual claim is made. For example, if a claim is made today based on treatment rendered in 2014, the 2014 occurrence policy responds.
2) Claims Made Insurance
A Claims Made Insurance policy covers claims that arise out of damage or injury that took place during the policy period, regardless of when claims are made. When you cancel a Claims Made policy, coverage ceases for the past as well as the present and future unless tail coverage (www.acponline.org) is secured. This covers you during your retirement for any future claims that arise from the practice period in question. From the moment you start to plan for your retirement, discuss tail coverage options with your insurer.
Generally, insurers provide coverage at different prices and with different benefits. If you meet certain criteria, the insurer may provide you with tail coverage and credits for prepaid premiums or discounts. Bear in mind that switching insurers may result in losing your premiums. This is because equity built with one insurer does not transfer to another.
Also, consider your insurer’s financial stability. You are committing to that insurance company for your entire retirement; most tail coverage cannot be cancelled once the contract is bound. If the company becomes insolvent, you will no longer be insured and will be personally responsible for any claims that arise.
Consult your insurance provider to fully discuss your options.
- Your Medical License
What to do with your medical license can be a complicated and difficult decision. It is also a decision that must be made well ahead of time. In some states, renewing a license can take up to 6 months.
Retirement doesn’t always mean the end of a medical career. If you would like to continue practicing in some way – including working as a locum tenens practitioner, or undertaking research related activity or medico-legal work – then you will need to retain your license. This means that you will still be subject to the same standards of professional competence as other registered practitioners. In most states, this is viewed as “Active Status.”
This means that you can practice and prescribe medicine and are subject to the same restrictions and guidelines as practicing physicians. You will also have to continue to meet the state requirements. Again, this varies from state to state but usually includes completing the renewal process, continuing medical education and maintaining insurance.
Many practitioners may choose to maintain an “Active Status” if they think they would like to return to medicine in the near future and don’t want to go through the hassle of reactivation. Bear in mind that if you retire completely, it may be difficult to meet all the requirements needed for an active license to be issued to you again.
This is the middle ground option offered by several states. This option means that you are exempt from having to meet education and training requirements. However, you are also not permitted to practice or prescribe medicine. You can apply to reactivate your license at any point.
Many medical boards such as Massachusetts, Texas, Washington and Florida permit you to apply for retired status. This means that you surrender your license and ability to practice or prescribe medicine and are no longer required to meet educational or other requirements. If you do not see yourself returning to medicine, this is the easiest option.
This option is not ideal. If you do not complete your renewal application in time, your license will be considered lapsed. This is viewed as revocation and is treated similarly to suspension or revocation for a cause. Renewal of lapsed license is complicated and not guaranteed. If you are in doubt as to which option is best for you, seek advice from the medical board you are registered with.
Any people and organizations with whom you have contracted should be informed of your plans well ahead of time. Some may require that you serve a period of notice.
If you are employed by a hospital, medical practice etc. then your contract will probably have defined clauses regarding your retirement. In this case, review your contract before you inform your employers of your intentions. In particular, look at any clauses regarding timing requirements for the advanced written notice of your retirement. Check that your departure date does not result in penalties or unnecessary forfeitures. If you are unsure, consult a legal professional for guidance.
If you are in a partnership, you will need to inform your partner(s) of your plans. If you intend to return or continue working on a part-time basis, then it is best to negotiate this before you retire. Get all agreements in writing, and ideally have a signed and dated contract for returning to the partnership. You should also decide with your partners how you wish to handle dissolution accounts, notional rent payments and equity in the practice before you retire.
In general, many doctors and physicians will be party to at least one if not more contracts which will all come with their own obligations. In addition to medical contracts, there may also be maintenance and service contracts, utility agreements and leases. As soon as possible after deciding that you want to retire, review all these contracts to determine the steps you will need to take, short-term and long-term.
For the most part, legal and financial consultants advise that you should do review all contracts at least one year before your retirement date. This will give you enough time to assess notice and termination provisions and how your rights are affected if any agreement is terminated prematurely. If you are unsure what action to take, consult a qualified legal professional.
III. Patient Records
Managing medical records properly is a time consuming but necessary task. Remember that you may also be required to keep records pertaining to your medical practice after you retire. These may include payroll records, personnel files, accounts payable invoices and credits. Any patient records may also have to be retained.
Review your electronic medical records (E.M.R.) Retention Strategy and decide what you need to do with patients’ records upon your retirement.
The four key factors to consider include:
1) Do you intend to continue practicing part time?
2) Will the practice continue after your retirement?
3) Where you are based
4) Your role in the healthcare system
If you are an employee, then your employer will oversee the management of your patients' medical records and notify them of your retirement. However, if you are in private practice and transferring records to another physician, it is advised that you consult with an experienced healthcare attorney to ensure that the arrangement complies with both state and federal laws. If you are in private practice, discuss ongoing care with patients and agree on a plan for future care. When appropriate, you will need to obtain informed consent to pass patients' records to the doctor who will be caring for them.
Any agreement should allow the receiving physician the right to access the records in the future or to receive copies on request as well as the right to be notified if the receiving physician retires or plans to dispose of the records. This is also the time to transfer legacy medical records in your possession into an archive. Electronic medical records can be stored securely in vendor managed clouds. These allow for third party access saving you the trouble of spending your retirement responding to record access requests. Other records such as business and employee information can also be safely stored in this manner.
The length of time for which you are required to retain medical records varies between states and countries. For example, the state of Massachusetts Board of Registration in Medicine requires that patient records be retained for at least seven years. The length of time records must be kept for also varies depending on the practice, for example, pediatric practices will need to maintain patient records for far longer. How the records must be stored and the degree of access patients and others can be granted also varies between states.
If your retirement means the closure of your medical practice, then you should obtain legal advice. A qualified legal professional will be able to make sure that all relevant parties are notified in a timely manner and that E.M.R. retention and destruction laws are complied with. Your medical malpractice insurer may also have requirements for the storage and retention of records.
- Informing Patients
When informing patients of your retirement date, also include the relevant information about their medical records so that their next physician can access them. Give the post office a forwarding address should a patient or another party need to contact you after you retire. If you are unsure about what to do with medical records in your possession, seek advice from your state medical board.
Retirement is a new chapter in your life and should be viewed as an empowering opportunity to bring in the return on investment generated by a successful career. It should be a prospect that gets you excited and an opportunity to do the things you’ve always wanted to do. Having the right and positive attitude is key. Retiring from medicine deserves careful thought and planning. Most people only get one chance to do it right, so finding and taking good advice is worthwhile.
Proper Planning of Physician Retirement & Medical Malpractice Insurance, Hal Williams, Gallagher Healthcare: Industry Insights Blog; April 24 2014; Gallagher Malpractice,
4 Must Dos Before A Physician Retires, American Medical Association, www.ama-assn.org
The 10 Biggest Legal Mistakes Older Physicians Make In Retirement, Written by James M. Daniel, Jr., Esq., and Kimberly H. Gillespie, Esq., Edited by email@example.com, SEAK, September 15 2014; www.seak.com
I’m Retiring; What Do I Do About My Medical License?, Massachusetts Medical Society, April 20 2011; www.massmed.org
Is Retirement Calling You? A Few Things To Consider, Angela Boateng Esq., Pennsylvania Medical Society, www.pamedsoc.org
Physician Employment Contract Guide, American College of Physicians (ACP), 2017; www.acponline.org
US Medical Regulatory Trends and Actions, Federation of State Medical Boards, 2016; www.fsmb.org
Claims Made Policy, International Risk Management Institute, www.irmi.com
Occurrence Based Coverage, MedPro Group, www.medpro.com If retirement is right around the corner, these steps can help with your impending transition out of practice.