facebook

Guidelines for Closing or Relocating a Florida Medical Practice

By Ashley Lockett

Throughout the career of a healthcare practitioner, there may arise a multitude of reasons that can prompt the closing or relocation of their healthcare practice. These reasons may vary from retiring, moving, deciding to pursue another opportunity, or illness/death of the practitioner. Despite the various reasons one may have for closing or relocating a medical practice, there are guidelines that dictate the proper procedures to follow for a smooth process.

The Guidelines

Record Keeping

Fla. Stat. §456.057(13) of the Florida statutes states that “records owners shall notify the appropriate board office when they are terminating practice, retiring, or relocating, and no longer available to patients, specifying who the new records owner is and where medical records can be found.”

As defined in the statute, a records owner means:

  • Any health care practitioner who administers treatment, dispenses drugs, or generates a medical record after making a physical or mental examination of any person.
  • A health care practitioner to whom records are transferred by a previous record’s owner.
  • Any health care practitioner’s employer provided that the agreement designates the practitioner’s employer as the records owner.

Notification of Changes

In addition to notifying the appropriate board office when retiring, closing, or relocating their practice, a record’s owner must also place an advertisement in the local newspaper or notify the patients in writing of the change, pursuant to Fla. Stat. §456.057(12). The patients of the practitioner must have the opportunity to request a copy of their medical record. According to Fla. Stat. §456.057(14), when a new records owner has been appointed, the new owner is responsible for providing a copy of the complete medical record to a patient or a patient’s legal representative who has requested the record.

Outside of notifying the appropriate board office and patients, practitioners may need to notify the Centers for Medicare & Medicaid Services and the U.S. Drug Enforcement Agency to comply with the appropriate disposal of the drugs within the practice. If the practitioner holds a license from the Department of Health for their use of medical equipment, they must notify the department and keep a record of the transfer or disposal of the equipment. Other establishments that may need to be notified include the Florida Agency for Health Care Administration, the hospital where the practitioner worked if applicable, other vendors whom the practitioner may have received supplies or equipment from, and the practitioner’s medical malpractice insurance carrier.

Failure to Follow the Guidelines

Under Fla. Stat. §456.057(15), a licensee shall be subject to discipline by the appropriate licensing authority if they are found to be in violation of the guidelines set. A healthcare practitioner is among those who are deemed a licensee.

Among those unlicensed, Fla. Stat. §456.057 states that “the Attorney General is authorized to enforce the provisions of this section for records owners not otherwise licensed by the state, through injunctive relief and fines not to exceed $5,000 per violation.”

Non-Compete Agreements

For individuals who plan to continue practicing after closing or relocating their practice, any non-compete agreements that may have been signed when initially onboarding are important to keep in mind. Non-compete agreements are restrictive covenants that restrict an employee from competing with their employer after the employment period has ended. Although terms of non-compete agreements vary depending on the employer, restrictive covenants are required to be reasonable in regard to “time, area, and line of business,” under Fla. Stat. §542.335(1).

A restrictive covenant is not enforceable unless it is in writing and signed by the individual whom the enforcement is seeking to effect. Furthermore, the person seeking enforcement must prove the existence of a legitimate business interest that justifies the need for the restrictive covenant.

Legitimate business interests are defined under Fla. Stat. §542.335 as:

  • Trade secrets.
  • Valuable confidential business or professional information.
  • Substantial relationships with specific prospective or existing customers, patients, or clients.
  • Customer, patient, or client goodwill associated with:
    1. An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
    2. A specific geographic location; or
    3. A specific marketing or trade area.
  • Extraordinary or specialized training.

When an employee enters a valid non-compete agreement, it is crucial to thoroughly understand the terms of the conditions or serious consequences for violating it can occur. In Alonso-Llamazares v. Int’l Dermatology Rsch., Inc., a former employee was sued after violating their non-compete agreement. The non-compete agreement listed several stipulations that prohibited the employee from competing with the company during the time of their employment and two years after the expiration of it. Although the agreement listed the employment as ending on December 31, 2017, the employee worked for the company until November 1, 2019. Thereafter, the employee began working elsewhere on January 2, 2020. Despite the employee arguing that the agreement ended in 2017, the court found that the language of the agreement intended for the covenant to survive the expiration or termination of the agreement.  

Key Points

Whether a practitioner plans on retiring or chooses to work elsewhere, the requirements for closing or relocating the practice are important to abide by. Consulting with an attorney on the necessary steps may provide ample support in the process. For practitioners choosing to work elsewhere, the exit of a medical practice may mean the start of a non-compete agreement.

*****************************************************

It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice, it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services, please contact me using the contact information listed above.

All information and references made to laws, rules, regulations, and advisory opinions were accurate based on the law as it existed at this time, but laws are constantly evolving. Please contact me to be sure that the law which will govern your business is current. Thank you.