Health Care Agencies Articles - The Law Office of Lynnette Ariathurai Fremont, CA Business Law Firm 510-794-9290

Business legal services in Silicon Valley

Physician Compensation Models in California

Owning and operating a medical practice is complicated. Physician compensation is just one of many issues that needs to be considered. Physician compensation in California depends on how medical services are structured, billed, and regulated under state law. Compensation models must account for corporate practice of medicine restrictions, fee-splitting prohibitions, and payer reimbursement rules. These are important constraints. Attorney Lynnette Ariathurai helps medical practices navigate these challenges. In this article, our Bay Area business lawyer for medical practices provides an overview of the most common physician compensation models in California.

An Overview of Different Types of California Physician Compensation Models

Salary-Based Compensation

The most straightforward compensation model for doctors is to be paid a salary. There will typically be an employment contract that clarifies the specific terms. In California, salary-based compensation is most common in hospital systems, academic settings, and for larger group medical practices. With this type of model, the practice pays a fixed amount regardless of patient volume or collections. A key advantage of it as a compensation structure is that it reduces variability and compliance risk because compensation does not fluctuate directly with referrals or billed services. Though, it can sometimes be more challenging to attract talent.

Productivity-Based Compensation

Productivity models tie compensation to measurable output such as work relative value units (RVUs), patient encounters, or collections. These arrangements require careful structuring in California. They are lawful, but there are very strict rules and regulations in place. Compensation formulas must avoid improper fee splitting and must not incentivize referrals in a way that triggers anti-kickback exposure. A business law attorney can help.

Percentage of Collections Models

Another option in California used by some medical practices is to pay physicians a percentage of professional fees collected for their services. State law permits this structure only when the physician earns compensation for services personally rendered. The model cannot allocate a share of global revenue or facility fees in a way that violates fee-splitting rules.

Bonus and Incentive Compensation

Practices often use bonuses to reward quality metrics, efficiency, or patient satisfaction. It can be a strong option to attract more high quality physicians to join a group medical practice. In California, incentive compensation must remain detached from improper referral volume or ownership interests. Violations can lead to very serious sanctions.

Management Services Organization (MSO) and Management Structures

Finally, there are many California medical practices that operate alongside a management services organization. In these structures, physicians receive clinical compensation while the MSO receives management fees. The compensation model must preserve physician control over clinical decisions. Under the law, management fees reflect fair market value for non-clinical services only.

Contact Our California Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business law attorney who puts clients first. If you have any questions about physician compensation models in California, please do not hesitate to contact us today to set up a completely confidential, no obligation initial consultation. With an office in Fremont, we provide business law representation to medical practices throughout the Bay Area.

medical practice structure, medical professionals compensation, physician compensation models

Managing Risk When Expanding a Medical Practice to Multiple Locations in California

Are you preparing to expand your medical practice to a different location in California? If so, there are several different risks that you need to consider. Multi-location expansion changes how a California medical practice operates from day to day. Staffing models, reimbursement flow, and physician oversight become more difficult to monitor across sites. Seemingly small breakdowns have the potential to cause very big problems. Within this article, our California attorney for buying a medical practice highlights the key things to know about managing risk.

Key Risk: Corporate Practice of Medicine and Ownership Structure (California Law)

There are strict rules and regulations in our state regarding the business operations of medical practices. Specifically, California’s corporate practice of medicine doctrine restricts who may own and control a medical practice. That is a big risk to consider for medical practices that are preparing to expand to new locations. Expansion often involves new entities, real estate arrangements, or management agreements. If ownership and control blur between clinical and non-clinical parties, the regulatory risk rises. To remain in full compliance with California law, each location must preserve physician control over clinical decision-making and medical revenue.

Additional Risk: Licensing, Supervision, and Scope of Practice

There are many other risks to consider as well beyond California’s corporate practice of medicine doctrine. Each additional location increases licensing and supervision obligations. Physicians must maintain proper licensures for all locations of the medical practice. Beyond that, medical practices in California must ensure compliant supervision of physician assistants, nurse practitioners, and other clinical staff. Scope-of-practice violations can arise when oversight becomes decentralized. It is a major risk that requires attention before additional medical practices are opened.

Another Additional Risk: Billing, Reimbursement, and Payor Compliance

Expansion complicates billing and reimbursement controls. Practices must confirm that payor contracts permit services at each location. Credentialing delays or location mismatches can result in recouped payments or even denied claims, resulting in significant revenue losses. It is crucial that billing practices get careful attention.

Proactive Planning Helps to Reduce Risk When Opening New Medical Practice Locations

For medical practices that are planning to expand to a new location(s) in California, a proactive approach is the best approach. Advanced planning can go a long way towards reducing the risk of problems. Medical practices that grow without tightening their structure often discover problems through enforcement rather than planning. You do not want that to happen to your business. A risk-managed expansion aligns ownership, clinical authority, and operational controls before opening new doors. An experienced business attorney for medical practices in California can help.

Speak to Our California Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business attorney with extensive experience working with medical practices. If you have any questions about managing risks when expanding to a multi-location medical practice, please contact us today for a completely confidential, no obligation case review. With offices in Fremont, we handle business law matters for medical practices across the Bay Area.

medical practice expansion, medical practice risk management, Multi-location medical practice California

What Medical Practices Should Know Before Terminating a Physician, Nurse, or Practice Manager in California

Employment law is complicated. Before a medical practice takes the big step of terminating a physician, nurse, practice manager, or other key player, it is important to have a proper plan in place. There are a wide range of legal, logistical, and business issues that need to be addressed. Here, our California business lawyer for employers highlights key considerations that medical practices should know before terminating a doctor, nurse, or practice manager.

Start With an Employment Contract (If there is One)

California is an at-will employment law state (CalChamber). The relationship between an employer and employee is fully voluntary and can be ended by either party at any time. That is unless there is an employment contract that holds otherwise. It is an important consideration for medical practices because many doctors and nurses work under a contract. If there is a contract, it needs to be carefully reviewed before a termination moves forward.

Evaluate the Potential Wrongful Termination Risk

Even in an at-will employment state, a termination decision must comply with California law. No employee can be removed for illegal reasons. In other words, a medical practice employer cannot terminate a physician, nurse, or practice manager for a reason that violates statutory protections or clearly established public policy. California courts recognize claims for wrongful termination when an employee is discharged for refusing to engage in unlawful conduct, reporting regulatory violations, or exercising protected legal rights. If you have any questions about a potential wrongful termination claim by an employee, a California employment lawyer for medical practices can help.

Continuity of Patient Care

The most important consideration of the medical practice is the continuity of care for the patients. A plan should be put in place for patients to ensure their continuity of medical care following the employee leaving the medical practice.

Follow Established Internal Procedures and Be Sure Everything is Properly Documented

Before terminating a key healthcare employee, a medical practice should ensure that it has followed consistent internal disciplinary procedures. Employers should review performance evaluations, written warnings, and any prior disciplinary measures. Proper documentation helps demonstrate that the termination decision is grounded in legitimate business reasons rather than discriminatory or retaliatory motives. Practices should also coordinate the termination process with human resources policies, compliance officers, and their outside legal counsel.

Ensure Full Compliance With Medical Staff and Licensing Rules in California

When terminating a physician, medical practices must also consider professional licensing and credentialing implications. Physicians often hold clinical privileges, contractual obligations, or professional relationships that extend beyond the employment agreement. A termination may sometimes lead to reporting obligations under certain circumstances. That is particularly true if the termination involves allegations of professional misconduct and/or quality-of-care issues. Medical practices should evaluate whether the situation requires reporting to the California Medical Board, hospital credentialing committees, or national practitioner reporting systems.

Contact Our Bay Area Employment Lawyer for Medical Practices Today

Lynnette Ariathurai is a California employment lawyer for employers. If you have any questions about terminating a physician, nurse, or practice manager, we can help. Contact us today for a fully confidential initial consultation. With an office in Fremont, we provide employment law representation to medical practices throughout the Bay Area.

terminating doctor, terminating nurse, Terminating physician, terminating practice manager

Succession Planning for California Medical Practices

The owners of California medical practices should have a comprehensive, well-considered succession plan in place. If something happens to any owner of the medical practice without a plan in place, it can create some very serious challenges. Navigating the transition is a lot easier with a proper business succession plan. Here, our California business law attorney for business owners provides a guide to succession planning for Bay Area medical practices.

Background: What is Business Succession Planning?

The United States Small Business Administration (SBA) explains that business succession planning is the process of preparing for the transfer of ownership and management of a business when an owner retires, becomes incapacitated, or passes away. Along with other things, a comprehensive business succession plan for a medical practice identifies future leadership, establishes a transition timeline, and addresses key legal, regulatory, and financial issues tied to the change in control.

Physician Ownership Restrictions in CA are Key to Medical Practice Succession Planning

Succession planning for a California medical practice must always begin with the state’s corporate practice of medicine doctrine. California law restricts ownership of professional medical corporations to licensed physicians and certain other licensed healthcare professionals. These rules appear in the Moscone-Knox Professional Corporation Act. A transition plan must ensure that ownership always remains compliant with these requirements. If a physician owner dies, becomes disabled, or retires, the practice must transfer the ownership interest to a qualified licensed professional. That needs to be addressed within your business succession plan.

Buy-Sell Agreements for Medical Practice Ownership

A comprehensive succession plan for a medical practice will often include a buy-sell agreement governing ownership transfers. It is this type of agreement that establishes the legal mechanism for transferring shares when a triggering event occurs. The most common “triggers” are death, disability, retirement, voluntary departure, or the loss of a professional license of an owner.

A buy-sell agreement must be properly drafted. It should clearly define the valuation methodology used to determine the purchase price of the departing physician’s ownership interest. It should also identify the funding mechanism used to complete the purchase. Many medical practices rely on disability insurance or life insurance policies to fund ownership buyouts.

Full Compliance With California’s Corporate Structure Rules is a Must

Most physician groups in California operate as professional medical corporations (PCs). Succession planning must address the governance and ownership rules that apply to these entities. Only individuals licensed to practice medicine may hold shares in a medical corporation, though limited exceptions exist for certain allied professionals. When a physician shareholder leaves the practice, the corporation must ensure that the shares transfer to a properly licensed successor. A California business lawyer for medical practices can help.

Contact Our Bay Area Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business law attorney who has extensive experience working with medical practices. If you have any questions or concerns about succession planning strategies for a medical practice in California, please do not hesitate to contact us today for a fully confidential consultation. With an office in Fremont, we work with medical practices throughout the entire San Francisco Bay area.

business planning, business succession plan, healthcare agency succession plan

Legal Considerations Before Opening a New Medical Office Location in California

Opening a new medical office location is a major step for any California medical practice. A second or additional location can create new opportunities for growth, patient access, and revenue. At the same time, it can also create new legal, employment, lease, licensing, and operational risks. Before opening a new office, a medical practice should review its structure, contracts, employees, insurance, and compliance obligations. Here, our California business lawyer for medical practices highlights key legal considerations before opening a new medical office location.

Review the Medical Office Lease Before Signing

A new location usually starts with a commercial lease. Medical office leases should be reviewed carefully before they are signed. The lease should address permitted use, build-out obligations, tenant improvements, parking, signage, assignment rights, maintenance responsibilities, option to extend lease or early termination, and responsibility for compliance with applicable laws.

Medical practices should also consider whether the space is suitable for healthcare use. The lease should allow the specific services the practice intends to provide. A general office lease may not be enough if the practice needs exam rooms, specialized equipment, medical waste handling, imaging equipment, or other healthcare-specific uses. A California business attorney can help review the lease before the practice commits to the new location.

Confirm the Entity Structure Supports the New Location

Before opening another office, a California medical practice should confirm that its current business structure supports the expansion. Many physician practices operate as professional medical corporations. If the same entity will operate the new location, the practice should review its corporate documents, shareholder agreements, management authority, insurance coverage, and financial obligations.

If a separate entity will be used, the practice must consider whether that structure is legally appropriate. California’s corporate practice of medicine doctrine restricts who may own and control a medical practice. Ownership and management structures should be reviewed carefully so that the practice does not create compliance issues while trying to expand. California’s fictitious name permit rules may also apply when physicians or medical corporations practice under a name other than the name on the physician’s license or professional corporation name.

Update Employment Policies for Multiple Locations

Opening a new medical office can change how employees are managed. Medical practices should review employee handbooks, wage and hour practices, meal and rest break policies, timekeeping procedures, supervisor responsibilities, and reporting channels. California employment law is strict, and multi-location operations can create inconsistent practices if policies are not clearly documented.

The practice should also decide whether employees will work at one location or move between offices. If employees travel between locations during the workday, the practice should evaluate wage, mileage, scheduling, and timekeeping issues. Managers at each location should understand the same policies so that employment decisions are applied consistently.

Review Patient Records, Privacy, and Access Procedures

A new location can create patient record and privacy issues. Medical practices should decide how patient records will be accessed, stored, transferred, and protected between offices. If the practice uses an electronic health record system, it should confirm that access permissions, staff roles, and privacy safeguards are properly set up for the additional location.

The practice should also consider how patient communications, appointment scheduling, billing, and medical record requests will be handled. Inconsistent procedures between offices can lead to confusion and risk. Before opening, the practice should have clear internal procedures for records, privacy, and patient access.

Evaluate Insurance, Liability, and Vendor Contracts

A new medical office may require updates to insurance policies and vendor contracts. The practice should review professional liability coverage, general liability insurance, employment practices liability insurance, cyber coverage, workers’ compensation coverage, and property insurance. The practice should confirm that the new location is covered before seeing patients there.

Vendor agreements should also be reviewed. Billing companies, management services organizations, IT providers, cleaning services, medical waste vendors, equipment lessors, and supply companies may all need updated contracts. The practice should understand who is responsible for compliance, confidentiality, data protection, service failures, and termination rights.

Confirm Licenses, Permits, and Public-Facing Information

Depending on the practice and services offered, a new office may require updates to public-facing business information, permits, payer contracts, credentialing, signage, or professional listings. Medical practices should confirm whether any filings or updates are required before opening the new location.

This is especially important if the practice will operate under a trade name, brand name, or professional corporation name. The Medical Board of California explains that a fictitious name permit may be needed when a licensed physician, professional corporation, partnership, or group practice uses a name other than the physician’s licensed name in public communications, advertisements, signs, or announcements.

Contact Our Bay Area Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business law attorney with experience advising medical practices, physicians, and healthcare businesses. If you have any questions about opening a new medical office location in California, reviewing a medical office lease, or structuring a medical practice expansion, we can help. Contact us today for a fully confidential consultation. With an office in Fremont, we work with medical practices throughout the San Francisco Bay Area, including Newark, Union City, Hayward, San Leandro, Milpitas, San Jose, Santa Clara, and the East Bay.

California medical practice expansion, healthcare business attorney, medical office lease, medical practice attorney, new medical office location

Succession Planning for California Medical Practices

Background: What is Business Succession Planning?

Physician Ownership Restrictions in CA are Key to Medical Practice Succession Planning

Buy-Sell Agreements for Medical Practice Ownership

Full Compliance With California’s Corporate Structure Rules is a Must

Contact Our Bay Area Business Lawyer for Medical Practices Today

business planning, business succession plan, healthcare agency succession plan

Defending Employers in Medical Practices: What to Do Before an Employee Claim is Filed

Owning and operating a medical practice is complicated. A wide range of issues can arise. Employee complaints have the potential to be amongst the most damaging to employers. A fair, unbiased and proactive approach is a must. Lynnette Ariathurai is a California business lawyer who helps medical practices protect their interests before claims are filed. Here, our California employment attorney for preventing claims provides a step by step guide to what medical practices can do before an employee claim is filed.

Step 1: Accept the Complaint, Evaluate it, and Ensure Patient Care Does Not Suffer

Medical practices should start by classifying the complaint. Does it allege harassment, discrimination, retaliation, wage and hour violations, leave, safety violations, or another type of issue? It is important to understand what is being alleged. Medical practices should flag anything that could involve protected activity, protected leave, or protected class status. They should also flag anything that could implicate patient records, EMR access, or patient communications. Patient care cannot be allowed to suffer while the complaint is being addressed.

Step 2: Make Sure that Sensitive Patient Information is Protected

The Health Insurance Portability and Accountability Act (HIPAA) strictly protects the confidentiality of patient medical information. If the employee complaint involves charts, messages, photos, recordings, or access logs, restrict access on a need-to-know basis. Medical practices should not circulate screenshots and they should not “share for context” in group chats. Instead, they should preserve audit trails for EMR access and messaging systems. If you use outside HR or counsel, plan how you will disclose records as appropriate.

Step 3: Consider a Litigation Hold Tailored to Medical Systems

Medical practices facing an employee complaint in California may want to send a written preservation notice. Among other things, it can include email, texts, scheduling platforms, EMR audit logs, call recordings, camera footage, and patient messaging tools. You should coordinate with your EHR vendor if the system overwrites logs on a short cycle.

Step 4: Implement Interim Measures as Appropriate Without Punishing the Employee

You can adjust schedules, supervision, or patient assignments to reduce conflict while you investigate. However, medical practices should strictly document the business reason for doing so. It is important to avoid any appearance of retaliation. Things like pay cuts, hour reductions, or punitive reassignments could be an independent violation of the law. In other words, retaliation could give an employee the ability to bring an additional claim.

Step 5: Choose an Investigator Who Understands Medical Operations

A fair, comprehensive, unbiased, proactive investigation of an employee complaint is required. Medical practices should pick someone who is fair and reasonable, and can interview clinicians and staff without getting pulled into clinical debates. If the complaint involves a physician owner, a lead MA, or a practice manager, it is strongly recommended to consider an outside investigator.

Step 6: Be Ready to Get Professional Legal Representation

Employee complaints are complicated. Knowing what to do before a complaint is formally filed can go a long way to protecting the best interests of the medical practices. An experienced California employment lawyer for employers can review your case, answer your questions, and help you develop a strategy to resolve the matter most effectively.

Contact Our California Employment Lawyer for Medical Practices Today

Lynnette Ariathurai is a California employment attorney who has the knowledge and experience that medical practices can rely on. We put employers first. If you have any questions about what to do before an employee claim is filed against your medical practice, please do not hesitate to contact us today. With an office in Fremont, we provide employment law services to medical practices throughout the Bay Area of California.

Employee claims, employee discrimination claim, employee harassment claim, employee retaliation claim

MSAs for Medical Practices in California: Uncover Hidden Costs and Minimize Risk

Do you own and/or operate a medical practice in California? If so, you may be considering entering into a medical services agreement (MSA). Broadly explained, these are contracts between a professional practice and a third party company that offers administrative/business services. An MSA can be a useful tool for a medical practice in California, but it needs to be properly structured. Here, our Fremont business lawyer for medical practices provides a guide to MSAs in California.

What is a Medical Services Agreement (MSA)?

An MSA is a contract between a licensed medical practice and a third party management and/or administrative services company. The agreement allows the non-medical entity to handle business functions such as billing, human resources, accounting, marketing, facilities management, and technology systems. At the same time, the professional medical corporation (PC) retains control over all clinical decisions.

In California, these arrangements must be carefully structured to comply with the state’s Corporate Practice of Medicine (CPOM) doctrine. The law prohibits non-physicians or unlicensed entities from owning, managing, or influencing medical decision-making. The Medical Board of California enforces strict boundaries to ensure that only physicians direct patient care.

Why Medical Practices in California Enter into MSA

Many professional medical practices in California enter into MSAs. At their best, these agreements can help to make business operations more efficient and reduce administrative burdens. Running a compliant and profitable practice in California requires substantial time and resources unrelated to patient care. A management company can provide economies of scale by handling functions such as insurance credentialing, revenue cycle management, and payroll. MSAs also allow smaller practices to access advanced systems (such as electronic health records (EHR) management) that they may not be able to reasonably afford independently.

Be Prepared: Know the Hidden Costs and Risks of MSAs

Despite their benefits, MSAs carry significant legal and financial risks. The most common problem arises when an agreement crosses the line into impermissible control over medical decision-making. If an MSO sets physician compensation, directs clinical staffing, or influences patient scheduling, regulators may find a CPOM violation. Here are key points to know:

Hidden financial risks: In many cases, MSAs can conceal substantial costs. Flat fees, revenue-sharing provisions, and performance bonuses tied to patient volume may violate federal and state anti-kickback or fee-splitting rules.
Data privacy and HIPAA liability: Because MSAs often manage patient billing and records, they may become business associates under HIPAA (45 C.F.R. §160.103). A proper business associate agreement (BAA) must accompany the MSA.
Unfavorable contract: Some MSAs include restrictive termination clauses or automatic renewal terms that leave the physician practice trapped in a long-term agreement. It is imperative that any MSA is drafted and/or reviewed by an attorney.

Speak to Our Fremont Employment Lawyer for Employers today

Lynnette Ariathurai is a California business attorney who has considerable experience representing medical practices. If you have any questions or concerns about MSAs, we can help. Contact us today for your completely confidential consultation. From our Fremont office, our team provides business law services to medical practices throughout the Bay Area.

business associate agreements, medical services agreements, MSA costs, MSA risk

Medical Practices – Protection

Building, growing, and operating a successful medical practice in California is complicated. It is imperative that your professional practice has the right legal structure in place. Lynnette Ariathurai is a top-rated business law attorney for medical practices. If you have any questions about legal protections for medical practices in California, we can help. Contact us at our Fremont law office for a fully confidential, no commitment initial case evaluation.

Our Business Lawyer Helps California Medical Practices Protect their Interests

Structuring a New Group Medical Practice

All group medical practices in California need the right legal foundation. Otherwise, they could face serious issues. Setting up a group medical practice requires more than clinical expertise: It demands careful legal planning to protect your investment and define roles. Our Fremont business lawyer for medical practices helps practitioners choose an appropriate business entity, determine ownership shares, and establish compensation and control rights. We also guide clients on exit mechanisms and dispute resolution processes so transitions happen smoothly.

Incorporating a Medical Practice

In California, doctors and medical professionals face unique rules for structuring a practice under the state’s professional entity laws. Incorporation as a professional corporation often provides liability protection for business obligations and may offer tax advantages when qualified for S corporation status. There are strict rules and regulations under state law for professional corporations (PCs), especially related to ownership of the entity.

Buying or Selling a California Medical Practice

If you are considering buying or selling a group medical practice in the Bay Area, it is imperative that you have strong, experienced legal representation. Buying or selling a medical practice is a high-stakes transaction that blends business strategy with legal compliance. Our business law attorney assists clients from initial due diligence to closing, negotiating terms, drafting or reviewing letters of intent, and evaluating whether an asset sale or a stock sale best suits your objectives. We can examine liability exposure, contract terms, continuity of care obligations, and transition requirements such as patient notices and license transfers.

Restructuring a Medical Practice When Adding New Partners

If you are preparing to add another partner to your medical practice in California, you may need to do some restructuring of the business. Adding partners to a medical practice changes the business’s legal and operational dynamics. We help practices clearly define ownership interests, including voting and non-voting classes. That is key so that the equity and control rights align with partners’ contributions. Careful negotiations and documented agreements prevent later conflicts among owners.

Professional Contract Review for Medical Practices

Contracts are essential for the legal protection of medical practices in California. Medical practices rely on a range of contracts that shape daily operations and long-term stability. Our Fremont, CA business law attorney reviews and negotiates business formation agreements, commercial leases, supplier and vendor contracts, employment agreements, and independent contractor arrangements to protect your legal and financial interests. Customized, professionally-drafted contracts give medical practice owners the clarity and legal protection that they need.

Get Help From Our California Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business attorney with extensive experience working with medical practices. If you have any questions about protecting a medical practice, we are here to help. Contact us to arrange your completely confidential consultation. From our Fremont office, we provide business law services to medical practices throughout the Bay Area.

medical practice protection, physician practice protection, structuring medical practices

Attorney for Closing a Medical Practice in California

There are more than 75,000 actively licensed physicians in California who work across thousands of different medical practices (California Health Care Foundation). Of course, medical practices do not always last forever. New practices are being formed every month and many existing practices are being sold or even being closed down.

If you are a doctor in the Bay Area who is preparing to close your medical practice, it is imperative that you have a comprehensive understanding of your responsibilities. Within this article, our Fremont business lawyer for medical practices highlights the key things to know about closing down a medical practice in California.

Know Your Responsibilities When Closing Down Your Medical Practice

You Must Provide Adequate Written Notice to All Current Patients

There are strict rules regarding “patient abandonment” in California. Your practice does not want to be in violation as it closes down. The California Medical Board emphasizes that physicians must give sufficient advance notice—usually defined as somewhere between 30 and 60 days—so patients have time to secure alternate care and obtain their records. Written notices should be sent in writing either or both mail and email, and they should include the closure date and instructions for obtaining records.

You Must Maintain, Transfer, and Retain Medical Records

One of your big responsibilities when closing a medical practice in California is ensuring that medical records are properly handled. California requires physicians to keep medical records at least seven years from the last date of service for adults and, for minors, until age 25. You must either retain the charts yourself or designate a licensed custodian and disclose that custodian’s contact information in the patient‑notification letter.

You Must Safely Dispose of or Transfer Controlled Substances and Return DEA Forms

There are also strict rules for managing controlled substances. You should conduct a final inventory of Schedule II‑V drugs, cancel unused DEA 222 order forms by writing “VOID,” and mail them—along with your registration certificate—to the local Drug Enforcement Agency (DEA) office. Destruction of controlled substances must meet the federal “non‑retrievable” standard.

You Must Coordinate Continuing/Emergency Care as Appropriate

As a best practice, all medical practices in California should set up a proper system for coordinating continuing care and emergency care through their closure date. To do right by your patients, it is crucial that you take a proactive approach—especially if your practice has vulnerable patients.

You Must Notify Licensing Boards, Payers, and Credentialing Entities

Another requirement is to file a change‑of‑status form with the Medical Board, relinquish hospital privileges, and update your NPI profile. Medicare, Medi‑Cal, TriCare, and private plans generally require 30‑90 day’s notice to terminate provider agreements and to redirect electronic funds or capitation payments. Failure to cancel contracts in the proper manner can cause big problems.

You Must Properly Wind Down Business Operations

Finally, you need to develop a plan for the orderly wind down of your business operations. What this entails will depend, in part, on the specific nature of your medical practice. With that being said, there are many employment requirements. You should ensure that you give all employees written notice that meets California Labor Code requirements, pay final wages (including unused PTO) on the last day, and issue COBRA or Cal‑COBRA election forms.

Our California Business Lawyer Can Help You Close Down a Medical Practice

Lynnette Ariathurai is a California business attorney with the skills and experience to help physicians wind down their medical practice. If you have any questions about your responsibilities, please do not hesitate to contact us today. With an office in Fremont, we work with medical practices throughout the Bay Area.

close medical practice California, medical office closing, physician practice closure