When the clientele of a dental practice dwindles, or the owner unexpectedly dies or becomes unable to continue practicing dentistry, it may be necessary for that established dental practice to close. It is highly advisable that a dentist, while healthy, leave instructions in his will or with his attorney to indicate the wishes on how to handle a business closure in the event of his death.
Contact the landlord immediately to negotiate the termination of the lease if you do not own the building. Regardless of bankruptcy, retirement or death of the owner, the estate could be responsible for paying the remainder of the lease term (up to three years). Exceptions can be made on a case-by-case basis, depending on the landlord, court and your situation. Hire an attorney, if possible, as contract breaches are often difficult situations.
Inform all employees of the pending closure, and give notice of their final day of employment. When possible, extend a 90 day notice, or an adequate severance covering the same period to enable them to find new jobs. Employees are often the most surprised at the closure of a business.
Contact all of your active and inactive patients well in advance of the closing date, announcing your intent to close a dental practice. Invite each patient to come in and pick up a copy of their patient records, or offer to transfer them to another dental office. A newspaper announcement can suffice as notice. Keep all original records with the dentist or his estate.
Inform all patients with ongoing treatment that their cases will either be concluded by you personally during the remaining time, or refer them to a dentist who is capable of completing their treatment. Without proper referrals, patients can claim abandonment. Send a copy of the patient's record to the new office, and encourage the patient to make an appointment. Do not start any new cases that cannot be completed in a minimal number of visits.
Print out and store all business-related information. While you must legally keep some information for seven years, you are required to keep other items permanently, like insurance claims and financial statements. The American Dental Association (ADA) provides a complete list of items and length of required storage.
Find a market for the dental equipment in the practice. Newer items in good to excellent condition tend to have a high market value, and older items, regardless of condition, may have no value at all. When in doubt, contact an appraiser. What cannot be sold may be of some use to scrap metal dealers. Check your area's environmental laws regarding the disposal of chemicals and do not sell these items.
Notify the Drug Enforcement Agency (DEA) immediately, in writing, that you will close your business. Include your DEA registration. Inform the state licensing board as well as any dental societies you are a member of that the practice will be closing.
Use a Certified Public Accountant (CPA) to figure out all accounts receivables and payables. Assess ongoing payment plans to figure out what money is owed to you or refundable to the patient. Clear or write off all patient account balances. Contact all creditors, vendors and suppliers to calculate current balances, and pay them off as soon as possible. Send out billing notices for payments owed to the business, and provide them with a new mailing address.
Contact all contracted insurance companies and trace pending payments. Inform them of the date on which the contract will be terminated, and advise them of the new address of payment forwarding. Do the same for any and all insurance or payment-assisting companies who owe payments to the practice.
Terminate all work-related insurance policies like worker's compensation or business liability insurances. Make the effective date the last day of business. Verify with the insurance company, but your professional liability insurance (malpractice) should cover you for all claims that could arise in the future for work completed prior the last day of business. If not, a "tail-end" purchase may be necessary for you or your estate to remain protected.
Contact the Internal Revenue Service (IRS) and discuss any owed payments for your Employee Identification Number. Settle all past or future payments, including upcoming Social Security withholdings for your employees who are still working. Call and cancel all city permits and state licenses to avoid renewal fees.
Hiring a lawyer, accountant and a practiced transition broker may ease the entire process. Closing a business is stressful. Accept as much help as possible.
If you are a surviving spouse who is closing a dental practice due to the dentist's death, you will most likely need a death certificate, marriage certificate and the dentist's Social Security and state license number to initiate any of these procedures with external companies.