Physician Retirement Checklist: 8 Things Doctors Should Do Before Leaving Practice

Some patients may have been with the same doctor for years or even decades. A longtime physician may know their medical history, medications, family circumstances, and health concerns in ways that transferring an electronic medical record can't easily replace.

When a physician retires, the transition affects long-term patients, too. Some health systems and medical practices have succession plans that help move patients to another physician. Others don't fully address the issue until a doctor's retirement is getting close.

At the same time, physicians have a retirement of their own to plan. For many physicians, retirement is more complicated than choosing a final day at the office. Leaving medicine involves much more than deciding when to stop seeing patients. Doctors may have contracts and business obligations to settle, patients to transition, and plenty of decisions to make about their own finances, health, and retirement.

Ideally, those conversations should begin years before the final patient visit. Here are eight areas physicians should address before leaving their clinical practice.

1. Set Your Retirement Date and Make Sure You're Financially Ready

Start by deciding what retirement from medicine will actually mean. Some physicians stop practicing completely. Others gradually reduce their clinical hours or move into part-time work, consulting, teaching, mentoring, volunteer medicine, or locum tenens before fully retiring.

A gradual transition can provide continued income, but money isn't the only consideration. After decades of caring for patients and working demanding schedules, medicine can become central to a physician's identity. Suddenly going from a busy medical practice to retirement can be an adjustment.

Financial planning should extend beyond reaching a particular retirement account balance. Physicians may have pre-tax and Roth retirement accounts, taxable investments, pensions, deferred compensation, ownership interests in a medical practice, and other assets. If a pension offers different annuity choices, compare single-life and joint-and-survivor options carefully.

Estimate retirement spending, Social Security income, and the tax consequences of future withdrawals, including required minimum distributions. Healthcare costs deserve particular attention for anyone planning to leave practice before becoming eligible for Medicare at age 65.

2. Review Your Employment and Practice Agreements

Retirement responsibilities can be very different for an employed physician compared with someone who owns or has an interest in a medical practice. Review employment, partnership, and practice agreements well before announcing a retirement date.

Employed physicians should determine how much advance notice their contract requires. Failing to comply with contractual notice provisions could have financial or other consequences. Also review deferred compensation, vesting schedules, and any post-employment obligations.

Non-compete laws vary by state and continue to change, so physicians should obtain appropriate legal advice when necessary.

Physicians who own or have an interest in a practice should review partnership or shareholder agreements and determine how their ownership interest will be valued and purchased. The calculation may include accounts receivable, equipment, goodwill, and outstanding liabilities.

Selling, transferring, or closing a private practice can also mean dealing with leases, employees, vendors, insurance, and other business obligations. Waiting until retirement is only a few months away can make an already complicated transition more difficult.

3. Review Your Health, Long-Term Care and Estate Plans

Doctors spend their careers thinking about other people's health. As they near retirement, it's an important time to focus on their own health. Physicians retiring before age 65 may need health insurance to bridge the period between employer coverage and Medicare. Depending on the situation, options could include COBRA or individual health coverage.

HSA funds can generally be used tax-free for qualified medical expenses and COBRA premiums. However, most ordinary health insurance premiums before Medicare eligibility are not qualified HSA expenses. However, you can use HSA pre-tax funds to pay for Long-Term Care Insurance premiums at any age, per IRS age-bracketed maximums.

Once eligible for Medicare, understand enrollment deadlines and whether employer coverage qualifies you for a Special Enrollment Period. Missing enrollment requirements can result in coverage gaps or late-enrollment penalties.

• Don't Overlook Your Own Future Long-Term Care

Physicians see firsthand what can happen when chronic illness, mobility problems, dementia, or other age and health changes make it difficult to live independently. Yet their own long-term care needs can be easy to overlook while they're busy caring for everyone else.

Federal research estimates that 56 percent of people turning 65 will need long-term services at some point during their remaining lives. Long-term care is different from ordinary medical care. Medicare doesn't pay for long-term custodial care. Medicare may cover short-term skilled nursing or rehabilitation when eligibility requirements are met, but that is different from ongoing help with activities such as bathing, dressing, eating, and using the bathroom, for example.

Medicaid can pay for long-term care for people who meet financial and other eligibility requirements, but generally requires limited income and assets, which most doctors would never qualify for because of the amount of savings and investments they typically have in place.

Long-term care can be provided at home, through adult day care, in assisted living or memory care, or in a nursing home. The cost of long-term care services can bust the best budget unless planned for in advance. The LTC News Cost of Long-Term Care Services Calculator can help you see current and projected long-term care costs where you live. Costs can vary substantially depending on location and the type of care needed.

Physicians should consider how they would pay for future care. Depending on their age, health, assets, and preferences, that could mean Long-Term Care Insurance, a hybrid policy that combines life insurance or an annuity with long-term care benefits, dedicated assets, or a combination of approaches. Often the most affordable route is LTC Insurance, but consult a Long-Term Care Insurance specialist to help you make that determination.

For physicians considering Long-Term Care Insurance, timing matters. Coverage is underwritten, and premiums are based in part on age and health. Waiting until after a significant change in health can limit options or make coverage unavailable.

Ideally, long-term care planning should happen before retirement, while a physician is still healthy enough to have more options. Qualified Long-Term Care Insurance may also provide additional asset protection through a state's Long-Term Care Partnership Program. Most states have implemented some form of Partnership program. Depending on state rules, Partnership coverage can allow policyholders to protect additional assets if they exhaust their LTC Insurance benefits.

Having enough assets to pay for care doesn't necessarily mean having a care plan. Someone still has to find appropriate care, coordinate services, and make decisions. Most LTC policies have case management to help. Physicians should talk with their spouse or family about where they would want to receive care and who would step in if they could no longer manage those decisions themselves.

Review beneficiary designations on retirement accounts, insurance policies, and other assets as well. Update wills and trusts when appropriate and make sure durable financial and medical powers of attorney and health care directives reflect your current wishes.

4. Notify Patients and Plan for Continuity of Care

Physician retirement can be a major change for long-time patients. Some people stay with the same primary care physician or specialist for decades. Their doctor may have treated them through surgeries, chronic illnesses, and other major health events. Finding a replacement isn't always as simple as choosing another name from a provider directory.

Physicians must provide adequate notice and make reasonable arrangements for continued care. Specific requirements vary by state medical board, employer, and contractual obligations, so don't assume there is one universal notification deadline.

Large health systems and medical groups may already have a process for moving patients to another physician. Independent and smaller practices may need to build that transition themselves. Either way, succession planning shouldn't wait until a few months before retirement.

Physicians who expect to retire within the next several years can start thinking about succession long before they formally notify patients, particularly if they own a practice or have a large number of longtime patients.

When possible, identify potential successor physicians early. Give active patients enough notice to make other arrangements. Communication may include letters, patient portals, office signage, and information on the practice website.

Patients should know whether another physician is assuming the practice, whether they need to choose a new doctor, how prescriptions will be handled, and how to obtain their medical records.

Before leaving, address outstanding diagnostic tests, referrals, prescriptions, and follow-up appointments. Patients with complex medical conditions, active treatment plans, or significant health risks may need a more individualized transition.

Above all, patients should know who will be responsible for their care after their doctor leaves and what they need to do next.

5. Review Your Malpractice Insurance and Tail Coverage

Professional liability exposure doesn't necessarily disappear on the final day of practice. Protection after retirement depends in part on whether malpractice coverage is occurrence-based or claims-made.

An occurrence-based policy generally covers an incident that occurred while the policy was active, even if a claim is filed later. Claims-made coverage generally requires the policy to be active when the claim is reported. Physicians leaving a claims-made policy may therefore need extended reporting, commonly called tail coverage, for claims filed after retirement.

Some malpractice insurers have retirement or mature-provider provisions that may provide tail coverage to physicians who meet specific requirements. Determine whether the physician, employer, or medical group is responsible for any required tail coverage and document the arrangement before leaving practice.

Compare options to find the best medical malpractice insurance for their specialty, location, policy structure, coverage limits, and retirement needs. Physicians moving into part-time practice, consulting, or locum tenens should also make sure those activities remain appropriately covered.

6. Make a Plan for Patient Medical Records

Retirement doesn't eliminate responsibility for patient records. Determine how medical records will be securely maintained and how patients can obtain them after you leave practice. Retention requirements differ by state and type of record, and additional requirements may apply to records involving minors. Verify the rules that apply to your practice rather than relying on a single national retention period.

Identify who will become the formal custodian of the records. If another physician or organization is taking over the practice, responsibilities for custody and patient access should be documented. If the practice is closing, make appropriate arrangements for maintaining electronic and physical records.

HIPAA privacy and security requirements continue to apply. Patients should know where their records are going and whom to contact when they need copies. Good record planning also preserves documentation that could become important during a future audit, insurance issue, or malpractice claim.

7. Update Licenses, Credentials, DEA Registration and Payors

Don't automatically surrender a medical license simply because you're leaving full-time clinical practice. Physicians considering future volunteer work, consulting, locum tenens, or occasional clinical practice should determine whether maintaining an active license makes sense. Reinstating a surrendered or retired license can sometimes be more difficult than maintaining the appropriate status.

Contact hospital medical staff offices to address privileges and credentialing. If you will no longer prescribe controlled substances, follow current DEA requirements for discontinuing professional practice or surrendering a registration.

Physicians leaving Medicare should also follow CMS procedures for withdrawing enrollment when applicable. Medicaid requirements vary by state. Notify commercial insurers and other payors and comply with contractual termination requirements.

Medical associations and other professional organizations may offer retired or reduced-dues membership categories for doctors who want to maintain professional connections after leaving practice.

8. Close Out the Remaining Business Details

Employed physicians generally have fewer practice-closing responsibilities than owners. For doctors who own a practice, retirement can involve many of the same tasks as winding down another business, with the added responsibility of protecting patients and their medical records.

Develop a timeline for notifying employees and completing payroll and other employee obligations. Review office leases, equipment leases, service contracts, technology vendors, and insurance policies. Determine how outstanding accounts receivable will be billed and collected and establish a timeline before closing business bank accounts. Work with accounting, tax, and legal professionals to address final business obligations.

If the practice isn't being sold or transferred, ensure the legal entity is properly dissolved, and the required documents are filed with the appropriate state agencies. Coordinate the business closing with patient notification and medical record planning. The office shouldn't disappear before patients know where to turn.

Final Retirement Check

Before the last day of clinical practice, physicians should confirm that they have:

• Established retirement income, health care and tax plans.
• Reviewed their personal long-term care and estate planning, including Long-Term Care Insurance.
• Completed employment, partnership and contractual obligations.
• Developed a succession or transition plan for patients.
• Notified patients and coordinated continuing care.
• Addressed pending tests, referrals, prescriptions and follow-up care.
• Arranged secure custody and patient access to medical records.
• Confirmed malpractice insurance and any required tail coverage.
• Addressed medical licensing, DEA registration, and hospital credentialing.
• Updated Medicare, Medicaid, and commercial payor relationships as necessary.
• Completed remaining practice dissolution and business responsibilities.

Planning for Life After Medicine

Physicians spend their careers helping patients make decisions about their health. Eventually, they have to make some of those decisions for themselves. Starting retirement planning early gives you time to transition longtime patients, settle professional and business obligations, and prepare financially for life after medicine.

Long-term care should be part of that planning. Where would you want to receive care if you needed help later in life? How would you pay for it? Who would help arrange it? Would your spouse or adult children be expected to provide care? Don't assume that because you practiced medicine, you are immune to aging and the consequences thereof.

Those are much easier questions to address before a health crisis. Retirement marks the end of a physician's clinical career, but it doesn't have to be a rushed exit. With enough preparation, doctors can leave their patients in good hands, protect what they have built financially, and enter retirement knowing they have also planned for their own future needs.