Are you taking risks that will affect your retirement?

Eric C. Marine is Vice President of Claims for the American Professional Agency, Inc. and a frequent writer on topics or risk management in the mental health field. O. Brandt Caudill, Esquire is a prominent defense attorney with the firm of Callahan, McCune and Willis in southern California. He attended the “Ramona” trial as an observer. Mr. Caudill has published numerous articles on mental health care issues and the law. Sylvan Schaffer, J.D., Ph.D. is both a practicing psychologist and a lawyer in the greater New York City area. He serves as Legal Counsel for the New York State Psychological Association and has written extensively on risk management topics.

One cold day in February, about four years ago, Oliver Cromwell, PhD. finally retired from the practice of therapy, after a career of almost 50 years. During that time Dr. Cromwell had seen many changes in his practice. His career began before the advent of insurance reimbursement. He had prospered during the time when there was little interference with his practice by insurance companies. At this time he was in partnership with no one. When managed care arrived he was in the autumn of his career. He was able to get by without having to become a preferred provider. When he finally retired he was satisfied with the way his career had gone. He had helped many people and was proud of that.

On the personal side, he had married well. His wife of many years was happy with the life and family they had shared. Their children had all grown, left and found lives of their own. In retirement, Dr. Cromwell and his wife looked forward to a peaceful and long life together enjoying the fruits of their labors.

Unfortunately, this was not the case. Oliver Cromwell, PhD. died unexpectedly only one year into retirement. His wife and children survived him. He had left them in good shape financially. The survivors would be able to handle continuing financial obligations.

About one year after his death, the estate of Oliver Cromwell, PhD. was served with a lawsuit. A former patient had decided to bring a claim for alleged malpractice, which was to have occurred about five years prior to the passing of Dr. Cromwell. When Mrs. Cromwell received the legal paperwork, she went into a state of shock. The fact that a former patient would even consider bringing a lawsuit against her deceased husband was devastating. This proved to be only the opening chapter of a nightmare she was ill prepared to handle.

Although the names used in this essay are fictitious, the facts are not. A widow faced this very scenario within the past five years. Some of the problems she faced were monumental. The first was locating any insurance coverage her late husband may have had. Because she did not participate in his psychotherapy practice, she had little information to go on. The first thing she did was contact a lawyer. Although the lawyer sympathized with her predicament, he still charged for his services.

Dr. Cromwell did not have a lawyer with whom he had a working relationship; therefore, the attorney retained by the widow had to spend time trying to review the fragmented records of the practice in order to provide assistance to the survivor. Mr. Cromwell and the lawyer never found the records that contained insurance information. It was only serendipity that they located valid insurance coverage.

One of the problems that arose was that when the doctor retired he neglected to obtain “tail” coverage for the final years of his malpractice insurance policies. This meant there were years where the insurance coverage had stopped and the estate created by the death would be responsible for any claim arising out of that time period. This oversight jeopardized the financial well being of the heirs of the good doctor. An oversight of this nature meant that his wife and potentially his children might have to respond to any claim filed without the assistance of an insurance company. Regardless of the actual amount of the claim, the legal fees alone can be staggering.

Once insurance records were found, Mrs. Cromwell and the lawyer faced the next hurdle. Locating the clinical records of the former patient was difficult. Dr. Cromwell had always meant to consolidate and merge all his remaining records but had not gotten around to it before he passed on. He had not even left a list of locations where the records were stored. Because he had been in practice for such a long time, the volume of records were such that he did not have the space to keep them in one location. Although a situation such as this is not an insurmountable problem, it certainly makes for a difficult reconstruction process.

Concurrent with the lawsuit papers was a demand for a copy of the therapy records, which included a “release of information”, form signed by the former patient. The state law required the provision of those records within 10 days. The condition and location of the records made it impossible to meet this requirement. In actuality, it took almost three months to find and copy the file and provide it to the plaintiff. In this matter, the attorney for the plaintiff was an understanding individual in that no procedural challenges were instituted. There could have been and most probably, the plaintiff would have prevailed.

As you approach the time when you feel comfortable with the thought of your own retirement, keep in mind that you have some final duties to perform. These duties ultimately will benefit your former clients and protect your heirs from the potential anxiety a lawsuit can bring.

The following is a short list of suggested activities that can help reduce the possibility of problems arising after you retire from the profession:
1. Terminate the treatment of patients who are ready to be terminated. If it is possible to end therapy with an individual formally, please take the opportunity to do so. Inform them that after a certain date you will not be available. Discuss alternatives to your services, should they become necessary. End the professional relationship on a positive note.

2. Allow sufficient time to facilitate the transfer of patients who will need continuing care This time should include consideration of the amount necessary to assist even the most resistant patients, which may prove to be your biggest challenge. Some patients may be resistant to change. Others will have a difficult time dealing with the separation and look on it as abandonment. When evaluating your caseload, pay close attention to the aforementioned individuals. They will present the biggest challenge to your planned retirement.

If you have a forensic type of practice, be realistic in your assessment of how long it will take to end your practice. Court testimony or appearance before official panels will extend the time before you actually retire. Although most of the elements of your practice will be over, future reporting and testimony will require you to maintain insurance coverage for a longer time.

3. On a specified date, stop taking new patients. If it is your intention to retire, this day is the first day of that period. You know what your average treatment period for clients has been during your career. Let that be your guide as to when to stop taking new clients. This will help you focus on the actual date when your retirement begins. As you get closer to the actual date, inform all your patients of the event.

4. Allow your practice to reduce gradually, rather than to end abruptly, if possible. This can ease the transition from a fulltime practice to the fulltime retirement. The change involved in retirement can be dramatic. Preparation for that time can make it more fulfilling and enjoyable.

5. Be mindful of the obligations you have to the contracts you have signed (HMO, lease, PPO, hospital, university, etc.). Contracts may contain specific procedures that must be adhered to. Consider the contractual obligations when you start to wind down your practice. Each contract will contain provisions for your termination of the agreement. You need to be aware of the specifics of the contract and follow the process you have previously agreed to.

As a suggestion, you might develop a spreadsheet to chart out the date of notification requirements of the various contracts, which will help develop a plan to follow in the closing of your practice. Adhere to the plan and the process will go as smooth as possible.

6. Develop and implement a plan to deal with the records your practice has generated over the years. During your years in practice, you have become the custodian of the therapy records of all your clients. Your clients are aware that you possess their most intimate secrets. Some of those secrets may be necessary to them in the future. It is your responsibility to see that they can get their records, if the need arises.

7. Know your individual state’s requirements for record keeping. Each state has varying requirements for records and their retention. Develop a plan to maintain the records that conform to your state’s requirements. In this endeavor, an attorney may be quite useful. It may take some research to develop a plan to meet the statutory requirements. All help is good in this area and it will prove well worth the cost.

8. Do not make your plan for your records a secret. Make sure someone else is always able to find your records, should you not be available. It will remain your responsibility, even in your absence, to have the client records available for the client. This duty can pass on to your estate. Make it possible for the survivors to comply with the law.

9. Make sure your professional and general liability insurance policy history is available and accessible to yourself and your designated representatives, now and in the future. In the time prior to your actual retirement, it is your responsibility to make sure that any insurance coverage you have will continue to provide protection even after you stop paying for it. Make sure you contact your insurance broker and take the steps necessary to make sure your protection continues.
If you were covered by an “Occurrence” type policy throughout your career, simply having your policies organized and accessible will suffice. If a “Claims-Made” type of coverage covered you at any time during your career, make sure you obtain the unlimited extended reporting endorsement upon retiring. Some policies offer this endorsement for free upon permanent retirement. You may not be alive to face the potential litigation, but you should be aware that your heirs could be.

If you have not been keeping a file all during your career that is a compendium of your insurance coverage, start today. It is always smart to keep this information together and accessible. It can never be predicted when this information will be needed, but you can bet the situation will be time critical when it is.

10. Enjoy your retirement! You have earned it. It is your reward for all the good work you have done during your career. No one deserves it more than you do.

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