Contingency planning for emergency closure of a practice

The emergency closure of a psychiatric practice because of sudden death, illness or incapacity raises immediate problems, particularly with regards to clinical coverage of patients, management of medical records and practice administration. As part of risk management, it is wise for a psychiatrist to have a contingency plan prepared for the sudden and unexpected closure, either temporary or permanent, of their practice. The contingency plan should include essential information for the persons who will be involved in managing the closure of the practice on their behalf. The compilation of such information will also be useful for the psychiatrist at the time they choose to close up.

Nomination of an individual to manage the practice closure

As part of a contingency plan, psychiatrists may like to consider nominating an individual who can oversee and administrate/ensure the orderly execution of their practice closure on their behalf, should the need arise. Ideally, any such nominated individual should be a psychiatrist. If this is not possible, other parties to consider in assuming the role include those who are readily available, such as a staff member from the practice, a relative, a colleague or a business associate.

Importantly, the chosen party needs to be someone whom the psychiatrist feels will be able to perform the tasks involved in closing down a practice. They should be able to manage any unforeseen events, responsibly and effectively and without feeling overwhelmed. The nominated party should also have a clear understanding of, and capability to carry out their responsibilities commensurate with the privacy requirements of the relevant jurisdiction.

When a practice has to be closed because of the unexpected death of a psychiatrist, consideration should be given to how the individual charged with the responsibility of closing the practice connects with those of the executor of the deceased psychiatrist’s will. These roles – which require different resources, skills and time – may or may not be undertaken by the same person. For example, a psychiatrist’s will may stipulate that the executor takes control of the deceased psychiatrist’s assets but the executor may not be experienced with medical practices generally and psychiatric practices specifically. In such circumstances, the individual nominated to close the practice will need to educate the executor about the clinical and administrative aspects of the practice and the psychiatrist should incorporate this in their contingency plan.

Compiling key information to facilitate the practice closure

Psychiatrists should consider compiling information that will assist the individual who is administrating the closure of the practice. Such information should be reviewed about once per year. The psychiatrist should inform their nominated person of where the information can be found and they may wish to discuss details with them. The lawyer, practice staff and/or the family of the psychiatrist should also hold a copy of the information, which may include:

Documentation stating the name of the nominated individual to close the practice on behalf of the psychiatrist (if this has been prepared in advance).
Refer to: Emergency closure of a private psychiatric practice: nominated representative form [MS Word; 22 KB]

• Information about keys, passwords, security codes and for accessing the practice’s patient health records.
• Names of active and inactive patients. This list should be kept up-to-date.
• Staff names, their position titles and contact details. Refer to: RANZCP template: Contact details of practice staff and service providers
• Names of business affiliations and contact details (e.g. accountant, lawyer, MDO). 
• Names of service providers, account numbers and contact details (e.g. utilities). 
• Names of professional affiliations, account numbers and contact details (e.g. RANZCP, AMA, hospitals with admitting rights). Refer to: Contact details of professional/clinical associations (template)

Posthumous medical negligence claims (Australia)

Psychiatrists should be aware that, if death is the reason for the closure of their practice, under certain circumstances their estate or heirs may still be liable for any posthumously filed medical negligence claims against the psychiatrist. Accordingly, the retention of the patient health records for an indefinite period is a contingency measure for the preparation of the defence of such lawsuits. Several companies offer file storage services for patient health records. Psychiatrists may wish to consider nominating a health records storage company to which their patient health records can be transferred.

Possible accident compensation claims or investigations by the HDC (Aotearoa New Zealand)

Psychiatrists should be aware that, if death is the reason for the closure of their practice, under certain circumstances patient health records will need to be retained if their patient has a claim underway with the Accident Compensation Corporation or has made a complaint to the Health and Disability Commissioner. Psychiatrists may wish to consider nominating a health records storage company to which their patient health records can be transferred.

Contact

For enquiries about this page, contact policy@ranzcp.org

Disclaimer

This information is intended to provide general guide to practitioners, and should not be relied on as a substitute for proper assessment with respect to the merits of each case and the needs of the patient. The RANZCP endeavours to ensure that information is accurate and current at the time of preparation, but takes no responsibility for matters arising from changed circumstances or information or material that may have become subsequently available.