People and organisations to notify
This is a guide and not an exclusive list of people and organisations you may wish to contact when closing a practice.
Medical indemnity insurance organisation
A psychiatrist should notify and consult with their Medical indemnity organisation (MDO) at an early stage of the close up process to discuss practice closure and issues relating to insurance. This should include post-closure records management requirements – i.e. length of time for which they should be retained. Adequate notice of cessation of business may result in refund of relevant premiums paid.
Run off cover
Run off cover is the provision of medical indemnity insurance to health practitioners (or their representatives) in the event of their death, permanent disablement or permanent retirement from practice, to protect against any future claims. The need to purchase run off cover will be determined by the type of policy held by a practice.
Within Australia the Run-Off Cover Scheme (ROCS) came into effect on 1 July 2004. Under the ROCS the Australian Government guarantees to pay the cost of claims against eligible doctors who have left the private medical workforce. The Scheme is funded on an ongoing basis through a charge on insurers called the ROCS Support Payment, which is levied as a percentage of insurer’s medical indemnity insurance income and is shown on medical practitioners’ premium notices.
In most cases medical practitioners in private practice are eligible for the ROCS immediately on leaving the workforce, for various reasons including:
- retirement after 65 years of age
- permanent disability
- maternity leave
- departed Australia after working under visa subclass 422 (medical practitioner) or 457 (business–long stay)
For more information about ROCS refer to Australian Department of Health.
Royal Australian and New Zealand College of Psychiatrists
Psychiatrists should contact the RANZCP Head Office when they close their private practice. This is so their name can be removed from the College’s ‘Find a Psychiatrist’ database. Informing the College is also important so peer review groups and any committees and supervisor programs in which the psychiatrist is involved can be notified.
The College should also be informed of any change in contact details so the membership database can be updated. This notification becomes particularly important for potential future situations when a patient contacts the College seeking the contact details of their former psychiatrist for the purposes of obtaining their patient health record.
When a RANZCP member is completely and permanently retiring from the practice of psychiatry, they are eligible to become a retired member. Retired members are exempt from further membership fees and Continuing Professional Development requirements but have the same powers, privileges and obligations as Fellows.
Formally notify the College of your retirement. Members should also notify the College if they resume psychiatric practice after a period of retirement.
The College continues to provide professional support to its members after they have retired from practice. For example, the RANZCP is available to provide advice on the management of a subpoena that has been received post-retirement by a member.
Other professional organisations
Other professional contacts and organisations that may need to be notified of a practice closure, change of address and/or retirement. Certain organisations and legislative bodies require notification within 28 days of a change of business/practice circumstances. As such consideration should be given as to the length of advance notice a professional organisation/party may require before the date of closure of a private practice or, at the very least, of a change of address. A sample letter for all business notifications, including professional services and suppliers, can be found on the RANZCP website behind the members’ wall.
Organisations to consider notifying when closing a practice include:
- Chair RANZCP peer review group
- Medicare Australia or the Accident Compensation Corporation, Aotearoa New Zealand
- the Australian Department of Human Services will need to be contacted for the cancellation of Medicare Provider Number(s) and Pharmaceutical Benefits Scheme Prescriber Number.
- PHARMAC (New Zealand)
- Australian Health Practitioner Regulatory Agency (Ahpra) for registration retirement options
- Medical Council of New Zealand (MCNZ) regarding changes to CPD and Annual practising certificates
- hospitals where psychiatrist has admitting rights, if relevant
- national, state or territory health department, if applicable
- local general practitioners
- local community health centres
- local pharmacies
- WorkCover, if applicable
- professional associations, e.g. AMA, NZMA, ASMS
AMA members who are retiring from practice are advised to contact the AMA to determine financial responsibilities as a retired medical practitioner.
- professional subscriptions
The publishing company of professional publications, which are received in hard copy and mailed to the practice address, will need to be advised of the change of address.
- Other regular clinical/professional commitments.
Notifying colleagues early in the process of the intention to close up is advisable. Consideration should be given to publishing a notice advising of the practice closure in a relevant professional publication (e.g. AMA, NZMA newsletter).
Notice of closure in a circular
Currently, NSW, Victoria and the ACT require health care professionals, by law, to publish a notice in a local newspaper when their business is about to be sold, transferred or closed and that they will no longer be providing a health service from that practice. The notice should set out details of the proposed sale, transfer or closure and whether patient health records will be kept. Generally, the length of notice will depend on the practice location and how easily patients will be able to access other health care professionals for their required care.
Informing employees about the decision to retire, sell or transfer ownership of the psychiatric practice is important. The manner in which an employee can be advised, the amount of notice that must be given, and their entitlements owing (e.g. redundancy payments) should be in accordance with the relevant jurisdictional law.
If the practice ownership is being transferred, and the intent of the new owner will be to maintain the current employees, it is wise to keep all parties informed throughout the transfer phase to help facilitate a smooth transition. Keeping staff informed about the sale process aids in offsetting unsubstantiated rumours, and maintaining staff morale and customer service.
Irrespective of the reason for the closure of a practice, seeking expert industrial relations advice about employees’ entitlements is recommended. Refer to:
- Australia: Fair Work Ombudsman
- Aotearoa New Zealand: Employment New Zealand
All professional and financial service providers for the practice should be notified of the practice closure. A sample letter for all business notifications, including professional services and suppliers, can be found on the RANZCP website.
A psychiatrist should discuss their intention to close their practice with their accountant to determine what steps need to be taken from an accounting perspective.
Usually, business records should be kept for at least five years after the end of the financial year in which the practice is sold or closed. The period for retention of business records may be longer for the purposes of capital gains tax.
Refer to the ATO.
In New Zealand The Companies Act 1993 requires a record retention period of 7 yrs.)Company owners who are winding up should be aware of business tax obligations such as final GST, employer taxes and income tax.
The need to dissolve the legal entity of the practice (business name and registration) should be discussed with one’s legal adviser and accountant.
The Australian Taxation Office (ATO) will need to be notified of the cessation of a business to cancel registrations, such as the Australian Business Number (ABN), Goods and Services Tax (GST) and Pay as You Go (PAYG). Refer to:
Australian Securities and Investment Commission
In Aotearoa New Zealand, Inland Revenue – Ti Tari Taake will need to be contacted when winding –up a business to cancel GST and PAYE registrations. An IR315 form for Business Cessation will need to be completed.
|Lawyer/contracts||Discussing with a lawyer the need to dissolve the legal entity of a practice (business name and registration) and the cessation of contractual arrangements is recommended.|
|Financial adviser||Financial advice post-closure of practice should be considered.|
The date of retirement is important for superannuation funds.
In Aotearoa New Zealand if you contribute to Kiwisaver you may wish to check the regulations about accessing funds.Superannuation requirements for employees need to be considered.
Practice insurance is usually in addition to medical indemnity insurance and covers practices for claims that may be triggered by the actions or omission of staff (vicarious liability). A psychiatrist should check with their insurer as to whether any run-off cover is required for such claims.In Aotearoa New Zealand, Liability Insurance provides protection for the insured from third party claims arising from the insured's negligence causing loss or damage to a third party's property, business, reputation or a liability for an unintentional breach of a Statute or a professional mistake when providing advice. A psychiatrist should check with their insurer regarding suitable notice periods for cancellation.
|Property damage and general liability insurance for the office should not be cancelled until the physical assets for the office have been disposed of or the premises vacated.|
Practice services and suppliers
Commercial contracts usually apply to a defined period of time. Contacting a supplier to request permission to break a contract may be necessary. Final statements should be requested from and outstanding debts paid to suppliers.
|Utility companies and suppliers||All organisations providing the rooms with electricity, telephone services, ongoing supplies and services (e.g. software, office supplies, medical supplies) will need to notified of the final date of required services. A forwarding address to receive final statements should be arranged, if necessary.|
|Building manager||Notifying the rooms’ manager early in the process of the intention to close up is advisable.|
|If the premises are leased, notifying the landlord and examining the lease for contractual obligations early in the close up process is recommended. If the right exists to sublet the premises, it is important to be aware that his clause many not automatically release the lease holder from liability.|
|Payroll service||Payroll services will need to be notified of the final day of practice staff as an employee of the practice.|
|Business banking||Business banking arrangements need to be concluded and accounts closed.|
|Cleaning company||Final cleaning services will need to be booked once the date of closure has been established|
|Marketing services||These services should be notified of the business closure (e.g. Sensis or HealthPages.co.nz).|
|Office supplies||Destroying all unwanted letterheads, sickness certificates and practice stationery is an imperative owing to the prevalence of fraudulent behaviour by unauthorised personnel.|
Careful management of unused and excess prescription pads and computer generated prescription paper is important. These can be destroyed by secure shredding. An alternative for Australian medical practitioners is to contact the Pharmaceutical Benefits Scheme (PBS) to arrange collection of the pads/paper from the practice by post and have them delivered to PBS’s destruction source.
PBS telephone: 132 290.
Medical practitioners have legislative responsibilities for the management of excess supplies of medications, including drug samples. In Australia, the legislative requirements for disposing of drugs varies between jurisdictions and according to a drug’s national classification (Schedule) for regulating the availability of the medicine or poison for the safety of the public. For information on the scheduling of medicines and poisons refer to the Therapeutic Goods Administration’s website on Scheduling basics.
Schedule 8 (S8) drugs have strict legislative controls. When being destroyed S8 drugs are required to be done so in the presence of another doctor, pharmacist, veterinary surgeon, dentist or nurse. Both participants in the destruction of S8 drugs (New Zealand Class B drugs) are required to record the:
Disposal of medications must also meet jurisdictional environment and hazardous waste guidelines. Medications must not be discarded in regular or contaminated waste bins or their vials broken and the contents tipped out. A suitable option for discarding all unwanted pharmaceuticals is to deliver them to a local pharmacy who has the facilities to dispose of them safely.
The relevant jurisdictional legislation should be referred to when disposing of drugs. In Aotearoa New Zealand these are the Misuse of Drugs Act 1975 and the Medicines Act 1981.
A resource listing all Australian and New Zealand legislation pertaining to drugs and medicines is available on the RANZCP webpage.
Consideration will need to be given to responsibly disposing of syringes, sharps containers, swabs, suture trays and other medical equipment.
Stocks of syringes and needles may be returned to the supplier or provided to another health facility. Sharps containers should be disposed of in the usual manner according to jurisdictional regulations.Final statements should be requested from supplier(s) and outstanding debts paid.
IT equipment and photocopier
|To ensure key information is not lost or transferred inadvertently all hard drives should be cleared of data. Simply deleting records does not adequately clear data from a computer system. Other equipment, such as photocopiers and fax machines, may also have drive memory and confidential information needs to be removed before disposing of such equipment. Seeking expert assistance and advice is recommended for the decommissioning of IT equipment when there is uncertainty about how to guarantee the erasure of files.|
Communications after practice closure
Before the practice closes consideration should be given to providing some ongoing messages that inform the practice closure, contact details for any enquiries and who to contact for emergencies. These notifications should be provided for a period of at least three months from the date of closure. Possible methods for the message include:
- recorded telephone message
- sign on practice door
- practice website notice
- email (automated ‘out of office’ reply)
- text message
- website notice if applicable
A forwarding address for mail should also be arranged.
When a psychiatrist is closing up because of retirement they should give consideration to whether they wish to continue to be contactable by their patients. If not, a change of mobile phone number may also be a consideration.
For enquiries about this page, contact email@example.com.
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.