Practice divorce: When you separate from your partners

Unfortunately, the marriage of a new physician with a medical practice or a hospital is often not a match made in heaven. What started as a union between two entities doesn't work out, and they decide to part ways. It is possible to extricate yourself from a situation in which one or both parties decide the fit isn't quite right.

Physicians are under pressure in today's health care environment, as costs escalate, reimbursement declines and the malpractice crisis persists. Everyday workplace stresses are exacerbated by longer hours, lower pay, greater reliance on technology, increased administrative burdens and decreased tolerance for error, which can lead to dissatisfaction and ultimately the decision to leave a practice.

Reasons for a medical divorce or termination of employment agreements fall into two categories: "for cause" and "without cause." For-cause termination generally means that a party to the contract can terminate the agreement, often immediately, if the other party breaches or otherwise violates it. The employment agreement should clearly spell out the reasons for termination. The causes for termination should be objective and reasonably within the employed physician's control, but not so restrictive as to leave the employer without recourse if some unexpected behavioral or performance issue arises.

Causes for termination include suspension of a medical license, loss of hospital privileges, failure to obtain or maintain insurance participation, failure to obtain or maintain board certification, conviction of a crime or felony, patient safety-related issues or use of illegal drugs.

A physician may negotiate a provision requiring the employer to provide advance written notice of the complaint that, if uncorrected, will lead to termination, thus allowing the physician adequate time either to change the objectionable behavior or to find new employment.

Typically, physician employment agreements can also be terminated without cause, meaning either party can terminate the contract at any time. Termination without cause usually requires a notice of a specified number of days, typically 90 to 180, without the need to identify a specific reason.

If you plan to terminate your relationship with your employer, I suggest following these steps.

Six steps for a clean departure

1. Review all your documents

Before notifying your employer of your decision to depart, review all documents, especially the contract you signed. Pay careful attention to advance notice provisions, retirement plan details and noncompete restrictive covenants, which are the key components of your agreement. The American College of Physicians' employment contract guide offers a useful overview of the provisions that most often trip up departing physicians.

2. Develop a plan for notifying your patients

One of the most important aspects of your departure is developing a plan to notify your patients. Many states require that all patients be notified when a physician leaves a practice, and some require 30 days' prior notice so that patients have sufficient time to transfer their records if they wish to change physicians. If you are not familiar with your state's requirements, consider consulting a health care attorney in your area for guidance. A sample patient notification letter appears at the end of this article.

High-risk patients should be sent a letter by certified mail, with a return receipt requested to confirm their receipt of the notification. High-risk patients are those who are more likely to experience adverse outcomes and feel they have been abandoned if their departing physician is unavailable for ongoing care. Examples include recent post-op patients and those currently being followed for serious or chronic conditions.

To expedite the transfer of records, consider including an authorization form with the notification letter. If your practice is going to charge the patient for photocopying costs, inform the patient of the fee. Any material related to patient care should be considered part of the medical record and provided to the new physician. Both the practice and the new physician should keep a copy of the medical records.

Notify other patients who won't be receiving a letter by placing a notice in the local newspaper. I also recommend posting a sign in the reception area to inform patients about the departing physician.

3. CYT: Cover your tail

Many practices obtain claims-made malpractice insurance policies that insure you for claims made during your term of employment. This means that if a malpractice event occurs while you were employed but no one filed a claim until after you left the practice, the malpractice insurer will not cover the claim because it was not made during your employment. To prevent this, you need to procure a supplemental policy, commonly referred to as tail coverage, which insures you for claims made after your employment terminates. While some employers will contractually agree to pay for tail insurance in certain situations, a thorough review of your employment agreement will determine who is responsible for procuring it.

Whether the practice pays for tail coverage often depends on the type of termination. Practices usually agree to pay if employment is terminated by the practice without cause, meaning there was no violation on your part. For example, if the practice is sold or merged with another group, the malpractice policy might not cover you in the event of a claim after the transaction closes.

4. Taking employees with you is a no-no

Your contract may contain provisions prohibiting you from soliciting the employment of the practice's existing staff. Even without these prohibitions, you should not actively solicit existing employees, especially before your departure. Some states consider this behavior an egregious act, and courts would find favor with the employer if a physician were to raid the practice for employees. It is, however, not uncommon for employees to solicit the departing physician before their departure. This creates a quandary because, although you may need new employees, you do not want to appear to be soliciting from the existing practice. Before making any decisions, review your employment contract and your state's laws regarding the issue. This is where a health care attorney can be very helpful.

5. Review noncompete covenants

A noncompete covenant may prohibit you from practicing within a specific geographic radius of your current practice for a designated period, often two years. Your practice's location typically determines the radius, which can range from five miles in a suburban area to 50 miles or more in a rural area. Many departing physicians believe these covenants will not be enforced; however, courts in most states will uphold them if they are reasonable. For this reason, you should review the covenant as if it were enforceable. Litigating a covenant, either from the employer's or the departing physician's perspective, is expensive. Don't hesitate to contact an attorney if you have any questions.

6. Secure the counsel of a health care attorney

Just as the words "cure," "remission" and "no evidence of disease" are pleasant to the ears of the treating physician and their team, "divorce" is a pleasant word for health care attorneys. Although physicians are transitioning from volume to value, attorneys are still reimbursed by the volume of cases they have, and they'll be just delighted to help you through a potentially expensive experience. That is why I suggest seeking counsel from an attorney with health care experience who has managed medical terminations on behalf of an employed doctor.

Bottom line

Most young physicians lack the knowledge and skills required to separate from a practice. Leaving a practice can be a stressful time in any physician's career. A clean departure will save you headaches, and possibly dollars, in both the immediate and long-term future. Your careful attention to these details will ensure a smooth transition to your next practice.

Sample patient notification letter

Dear [patient's name]:

It is with mixed emotion that I am [announcing my retirement from active practice; relocating my practice; etc.] as of [date]. This decision has not been made lightly, as I have enjoyed working at [practice name].

As of [date], Dr. [name] will be taking over my practice. [Describe the new physician's background in 1-2 sentences.] Dr. [name] can be contacted at the address below: [name of physician and/or clinic, address, telephone number, email].

If you prefer, you may obtain the services of another physician. If you choose to do so, I would recommend proceeding as soon as possible to ensure a smooth transition for your health care. The local health region keeps a list of physicians who are accepting new patients.

Your medical records are confidential, and a copy can be sent to another physician or released to you or another person only through your consent. I will be pleased to provide a summary of my care while you have been my patient, and with your consent, will arrange to have a copy of your file transferred to your new physician's office. Please sign the enclosed authorization form and return it to our office as soon as possible before [date] so that we may make the appropriate arrangements concerning your file.

It has been my great pleasure to provide you with health services in the past, and I am grateful to have had the opportunity to meet some wonderful people throughout my years in practice. Best wishes for a healthy future.

Sincerely,

Dr. [name], [title]

Neil Baum, M.D., is a professor of clinical urology at Tulane University in New Orleans, Louisiana. Dr. Baum is the author of several books, including the best-selling book Marketing Your Medical Practice: Ethically, Effectively, and Economically, which has sold over 225,000 copies and has been translated into Spanish.