Question About Selling a Patient List

[Guest guest]

I am going to be moving this summer and am researching selling my

practice. I am wondering how to legally handle the selling of a

patient list? Is it okay to sell their names & numbers/address? I

would think it would be illegal to hand over a patient chart without a

signed release? Also I assume I would still have to hold onto their

charts for malpractice issues - so do you photocopy the charts?

 

And if you have sold a patient list before I'd be interested in how you

went about pricing it? I don't think, at the moment, I will sell any

of the physical aspects of the clinic.

 

Please feel free to contact me offline at cariadanam @ gmail.com (no

spaces)

 

Thank You

Julie

[Guest guest]

I am not sure whether you are selling your practice or abandoning it -

meaning separating the office space, equipment and patient files.

 

Don't know about that, but if you were trying to sell files only be

careful. Legally speaking, the files themselves (the papers, etc)

belong to the practitioner and the information contained belongs to

the patient. The information contained therein can be obtained by

merely requesting a records release. Who would buy files anyway?

 

With the sale of a practice legal documents transfer ownership of the

business and responsibility for patient care. Prevents you from

abandoning them. All are sold as one usually - for your protection

as well as the prospective buyer.

 

Besides " WAG " estimates(wild guess), Practice valuation is based on

actual tangibles (equipment, accounts receivable, assumable lease,

etc.) plus " good faith " . Good Faith covers things such as patient

business (which ones might come back to the new buyer), business

reputation, location, etc..

 

As a rule of thumb anyone buying a practice should expect to keep 30%

of the current clients. Purchase price should include a fair fee for

tangibles and about 30% of the gross average of the previous 3

years. They would also want a " restrict of trade " agreement (so you

can't set up next door and steal your patients back).

 

Anyone selling a practice would like to get as much as possible for

it. Tangibles should be valued at 50% of replacement cost. Good

faith should begin at 70% of the past 5 year average to include such

things as location, reputation building, clinic name, etc.

 

As you can see, these two points of view are at odds and negotiation

is necessary.

 

If you are planning on leaving town then you do not want to finance a

practice you can't come back and reclaim. It would be nice to " cash

out " , but who has that kind of money these days?

 

When you find the right person to care for your patients, all this

will work out. Don't be a sucker though, this is business!

 

God luck,

 

Bill

[Guest guest]

Julie,

 

You may want to consult an attorney familiar with the sale of medical

practices in your state. This is the safest route. In the meantime,

the following information may be helpful...

 

You cannot sell patient records; it is illegal. So you'll want to be

sure that the sale of your practice is structured in such a way that

avoids the perception of patient record sales. The buyer is paying

for the accrued goodwill of your practice and any furnishings,

fixtures, or equipment. Patient records may be transferred as part

of the sale as long as you avoid any implication that records are

being bought or sold.

 

As for obtaining signed releases from patients before transferring

records, this is typically not necessary. Under HIPAA, transfer of

medical records during the sale of a practice is considered " health

care operations. " Medical information, according to the HIPAA rules,

can be transferred " pursuant to the sale of a covered entity's

business as a going concern " without specific patient authorization.

If you are a covered entity under HIPAA, the buyer of your practice

must also be (i.e., you can transfer records as long as they buyer is

upholding the same level of record protection that you are required

to uphold).

 

You may want to look into any state specific laws as well. For

example, California law allows the disclosure of patient medical

records by the patient's provider to other " providers of health care,

health care service plans, contractors, or other health care

professionals or facilities for purposes of diagnosis or treatment of

the patient. "

 

Even if not legally required, many medical providers will provide a

written notice of the pending record transfer as a courtesy to

patients. Typically, this is in the form of a letter explaining that

the practice is being sold, introducing the purchasing provider, and

allowing patients that option of requesting transfer of their records

to another provider of their choosing.

 

Generally, there is no requirement that you maintain physical custody

of patient records following the sale of your practice. But you

should have an agreement in writing with the transferee that

guarantees they will be permitted access to the record in the event

of a medical liability claim, that the original record will not be

destroyed or transferred without their prior approval and that the

original record will be maintained for a specified period of time.

 

Hope this helps. Again, an hour or so of consultation time with an

attorney versed in medical practice sales is, in my view, money well

spent.

 

--Bill.

 

 

 

 

 

On Apr 14, 2008, at 1:07 PM, cariadanam wrote:

 

> I am going to be moving this summer and am researching selling my

> practice. I am wondering how to legally handle the selling of a

> patient list? Is it okay to sell their names & numbers/address? I

> would think it would be illegal to hand over a patient chart without a

> signed release? Also I assume I would still have to hold onto their

> charts for malpractice issues - so do you photocopy the charts?

>

> And if you have sold a patient list before I'd be interested in how

> you

> went about pricing it? I don't think, at the moment, I will sell any

> of the physical aspects of the clinic.

>

> Please feel free to contact me offline at cariadanam @ gmail.com (no

> spaces)

>

> Thank You

> Julie

>

>

[Guest guest]

Thank you Bill for you very helpful response. I don't really have a desire

to sell the furnishings of the practice since I will open a practice where I

move, I don't kinow that it makes sense to re-buy everything unless I can

make alot off of the sale. Again thank you for the info!

Julie

 

On Wed, Apr 23, 2008 at 1:34 PM, Bill Mosca <mosca wrote:

 

> Julie,

>

> You may want to consult an attorney familiar with the sale of medical

> practices in your state. This is the safest route. In the meantime,

> the following information may be helpful...

>

> You cannot sell patient records; it is illegal. So you'll want to be

> sure that the sale of your practice is structured in such a way that

> avoids the perception of patient record sales. The buyer is paying

> for the accrued goodwill of your practice and any furnishings,

> fixtures, or equipment. Patient records may be transferred as part

> of the sale as long as you avoid any implication that records are

> being bought or sold.

>

> As for obtaining signed releases from patients before transferring

> records, this is typically not necessary. Under HIPAA, transfer of

> medical records during the sale of a practice is considered " health

> care operations. " Medical information, according to the HIPAA rules,

> can be transferred " pursuant to the sale of a covered entity's

> business as a going concern " without specific patient authorization.

> If you are a covered entity under HIPAA, the buyer of your practice

> must also be (i.e., you can transfer records as long as they buyer is

> upholding the same level of record protection that you are required

> to uphold).

>

> You may want to look into any state specific laws as well. For

> example, California law allows the disclosure of patient medical

> records by the patient's provider to other " providers of health care,

> health care service plans, contractors, or other health care

> professionals or facilities for purposes of diagnosis or treatment of

> the patient. "

>

> Even if not legally required, many medical providers will provide a

> written notice of the pending record transfer as a courtesy to

> patients. Typically, this is in the form of a letter explaining that

> the practice is being sold, introducing the purchasing provider, and

> allowing patients that option of requesting transfer of their records

> to another provider of their choosing.

>

> Generally, there is no requirement that you maintain physical custody

> of patient records following the sale of your practice. But you

> should have an agreement in writing with the transferee that

> guarantees they will be permitted access to the record in the event

> of a medical liability claim, that the original record will not be

> destroyed or transferred without their prior approval and that the

> original record will be maintained for a specified period of time.

>

> Hope this helps. Again, an hour or so of consultation time with an

> attorney versed in medical practice sales is, in my view, money well

> spent.

>

> --Bill.

>

> On Apr 14, 2008, at 1:07 PM, cariadanam wrote:

>

> > I am going to be moving this summer and am researching selling my

> > practice. I am wondering how to legally handle the selling of a

> > patient list? Is it okay to sell their names & numbers/address? I

> > would think it would be illegal to hand over a patient chart without a

> > signed release? Also I assume I would still have to hold onto their

> > charts for malpractice issues - so do you photocopy the charts?

> >

> > And if you have sold a patient list before I'd be interested in how

> > you

> > went about pricing it? I don't think, at the moment, I will sell any

> > of the physical aspects of the clinic.

> >

> > Please feel free to contact me offline at cariadanam @ gmail.com (no

> > spaces)

> >

> > Thank You

> > Julie

> >

> >

>

>

 

 

 

--

Julie Ormonde, L.Ac.

Rowan Clinic for Women

1524 W. Hays, Suite 102

Boise, Idaho 83702

www.rowanclinicforwomen.com