How to close a private pracitce

Closing a therapy practice is a complex process that requires careful planning to ensure a smooth transition for clients, colleagues, and business operations. Whether you are retiring, changing careers, or closing due to personal circumstances, taking the right steps will ensure compliance with ethical and legal obligations while protecting your professional reputation. Below, we outline key activities therapists must carry out when closing a practice, followed by considerations for unexpected closures.

Steps for Closing a Therapy Practice

1. Establish a Closure Timeline

✔ Determine your last day of seeing clients.

✔ Set deadlines for notifying clients, colleagues, and relevant organizations.

✔ Allow time for referrals and record management before officially closing.

2. Notify Clients in Advance

✔ Provide ample notice to clients in writing and during sessions.

✔ Offer referrals to other therapists or mental health services.

✔ Ensure continuity of care by discussing transition plans with clients.

3. Provide a Written Practice Closure Letter

✔ Clearly state the practice closing date.

✔ Express gratitude for the therapeutic relationship.

✔ Offer options for accessing records and referrals for continued care.

✔ Maintain a professional and supportive tone.

4. Handle Client Records in Compliance with HIPAA

✔ Review state laws on record retention (typically 7+ years for adults, longer for minors).

✔ Provide instructions for clients to request their records.

✔ Arrange secure storage or transfer of records after closure.

5. Notify Licensing Boards & Professional Organizations

✔ Inform your state licensing board of your practice closure.

✔ Update professional directories (e.g., Psychology Today, TherapyDen) and remove your listing.

✔ If applicable, resign from insurance panels and notify EHR software providers.

6. Address Financial & Business Matters

✔ Close business accounts and cancel practice-related services (phone, website, insurance, etc.).

✔ Notify the IRS and state tax authorities of your business closure.

✔ Pay outstanding business expenses and submit final insurance claims.

✔ If you have a leased office, provide proper notice and fulfill lease termination terms.

7. Communicate with Colleagues & Referral Partners

✔ Notify colleagues and referral sources of your practice closure.

✔ Offer guidance on transitioning clients who need continued care.

✔ Express gratitude to professional contacts who have supported your practice.

Unplanned Practice Closures: The Importance of Contingency Planning

While many therapists have the opportunity to close their practices in a planned manner, some may face unexpected closures due to illness, incapacitation, or death. Without a plan, clients may be left without guidance, and critical business and legal matters may go unresolved.

To prevent this, therapists should create a Professional Will and designate a Practice Executor to handle practice matters in case of sudden incapacity or death.

Challenges of DIY Professional Wills & Using Colleague Executors

✔ Legal & Ethical Risks – Self-created Professional Wills often fail to comply with HIPAA, licensing board rules, and state laws.

✔ Burden on Colleagues – Appointing a fellow therapist as an executor places a heavy administrative and ethical burden on them, potentially impacting their own practice.

✔ Record & Client Management Issues – Without a structured plan, client records may be lost, mishandled, or improperly stored, leading to confidentiality risks.

How TheraClosure Solves These Problems

TheraClosure is a professional executor service designed to manage therapy practice closures efficiently and ethically. Their services include: ✔ Legally Sound Professional Wills – Ensures compliance with ethical and state-specific requirements.

✔ Experienced Executors – A professional team, rather than a single overwhelmed colleague, handles practice closure duties.

✔ Client & Record Management – Ensures clients are notified, provided referrals, and that records are securely maintained.

✔ Business & Financial Closure Support – Manages administrative tasks such as final billing, lease termination, and notifying licensing boards.

Final Thoughts

Closing a therapy practice is a significant transition that requires careful attention to ethical, legal, and financial responsibilities. Whether planning ahead or preparing for unexpected circumstances, having a structured plan ensures a responsible and smooth closure. By establishing a Professional Will and using a service like TheraClosure, therapists can protect their clients, colleagues, and professional legacy, ensuring peace of mind for all involved.