October 2001 Bulletin

Safeguard records when closing practice

Medicare requires retention for five years; many hospitals, 10 years

By Michael W. Paddock

Of the multitude of considerations and questions that often arise when a physician or group of physicians close a practice is, what should happen with the patients’ medical records?

Because physicians remain liable for certain disclosures of health information after closing a practice—and because the proper, future care of patients will certainly require past medical records—physicians must take great care in preserving medical records. Whereas various federal and state laws touch on the transfer and retention of medical records, these laws are primarily aimed at hospitals and health facilities. Medicare, which requires participating physicians to retain medical records for at least five years, forms a starting basis. State laws vary, but often require hospitals to retain medical records for at least 10 years.

Physicians employed by hospitals will be required to follow not only the aforementioned laws, but also any more stringent policies of the employing hospital. While independent physicians and physician groups may be indirectly impacted by these laws via any agreements they may have with hospitals, e.g., ‘physician agrees to abide by all hospital policies’, any direct regulation would come from either state boards of medical examiners or state boards of professional regulation.

However, the regulatory scope of these state boards generally does not reach the transfer and/or retention of medical records. Thus, the duties of an independent physician or physician group will arise either from contractual obligations, membership obligations or general principles of property and tort law. For instance, it is not uncommon for independent physicians to contract with an assortment of private third party payers, such as employee health plans and large health insurers. Often, the agreements between these payers and physicians will include provisions dictating the steps and procedures that must be taken in transferring or retaining medical records. While plodding through each provider agreement may be cumbersome, it may be necessary to make an effective and proper transfer. A physician’s malpractice policy may shed light on the issue, as well.

The American Medical Association has promulgated policy statements regarding medical record transfer and retention. For example, a retiring physician should notify and inform his or her patients that they may either obtain their records or authorize the physician to send the records to a new physician. Records that are not transferred accordingly should be retained by the physician.

If a group practice will be sold or will be closed, the group should first notify and inform the group’s patients of their rights. The medical records of patients that do not authorize any transfer should be transferred either to another physician or another entity held to the same standards of confidentiality as the initial group. If another provider is not amenable, a thorough, written contract with a commercial storage firm experienced in handling medical records may suffice.

Regardless, patients should be notified that their medical records are being transferred accordingly. Some states’ health departments store the medical records of closed health facilities, and may be amenable.

Physicians should also consider the applied principles of property and tort law. Generally, physicians own the physical aspect of a patient’s medical record, e.g., the paper or the database onto or into which information is entered. The patients, however, ‘own’ the information within the actual record. Clearly, patients may need to rely on that information in the future for a variety of reasons.

One potential use that directly impacts proper record transfer and retention is any potential malpractice and/or subrogation causes of action. Because these lawsuits must be brought within a prescribed period of time, i.e., a statute of limitations, physicians should ensure the preservation of medical records until that prescribed period of time expires. Of great importance in this regard is the statute of limitations for pediatric malpractice; because a minor often has at least two years after his or her twenty-first birthday to file a lawsuit, physicians may have to preserve medical records for up to 23 years.

If a physician has a question regarding proper methods and timelines for medical record transfer in any regard, he or she should contact the local or state medical society, the local or state board of medical examiners, and/or private counsel.

Michael W. Paddock, JD, is a Chicago attorney specializing in health care matters for physicians, hospitals and other providers.

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