The Patient Data Questions Doctors Don’t Think to Ask Before a Sale
Before you sell your medical practice, or get involved in a private equity transaction, you need to understand what questions to ask about patient data. Many physicians focus on the compensation, valuation of the practice, and other terms more than thinking about patient data. However, New York’s Corporate Practice of Medicine (CPOM) laws and other regulations greatly impact the ownership and protection of patient data. Your deal must properly account for and focus on this important aspect.
The medical transaction attorneys at Daniels, Porco & Lusardi, LLP are ready to help you protect patient data and comply with the complex laws surrounding them.
Who Legally Owns the Patient Records Under New York Law?
New York is clear that medical records belong to the provider or practice, not the patient. However, patients have strong rights of access. Ownership becomes more complicated in a sale, especially when private equity or a management services organization (MSO) is involved.
Before signing a letter of intent, physicians should understand:
- Whether the professional entity (P.C. or PLLC) is the legal custodian of records
- Whether any MSO agreements already grant rights to access or use patient data
- Whether the buyer expects full ownership, shared ownership, or custodial control
- Whether the seller will retain any rights to access legacy records after closing
How Will the Buyer Handle EHR Migration and Integration?
EHR transitions are one of the most underestimated risks in New York healthcare deals. Large consolidators often require practices to migrate into their enterprise EHR system, which can trigger:
- Significant data mapping and validation work
- Export fees charged by the legacy EHR vendor
- Temporary downtime or dual-system workflows
- Data integrity issues that affect billing and clinical operations
Physicians should ask:
- Will the buyer migrate all patient data into a new EHR, or only active patients?
- Who pays for migration, extraction, and vendor termination fees?
- How long will the seller retain access to the legacy system?
- What happens if the EHR vendor refuses to release data without additional fees?
In New York, where payers frequently audit documentation, losing access to historical records can create real exposure.
What Are the Rules for Retention and Access After Closing?
New York requires physicians to retain adult patient records for at least six years and minor patient records for longer. Even after selling the practice, the physician may still need access to legacy charts for:
- Malpractice defense
- Payer audits
- Regulatory investigations
- Responding to patient complaints
A common mistake is assuming the buyer will automatically provide access. In reality, many buyers limit or charge for post-closing access unless the purchase agreement addresses it.
Key questions include:
- How long will the seller have access to legacy records?
- Will access be read-only or full access?
- Who pays for storage and retrieval?
- What happens if the buyer later switches EHR systems?
How Will HIPAA and New York Privacy Laws Be Handled During the Transition?
HIPAA rules are complex, and apply nationwide. New York adds additional complex privacy laws you must comply with during a sale. Both parties must ensure:
- Proper execution of Business Associate Agreements (BAAs)
- Secure transfer of protected health information (PHI)
- Compliance with New York’s breach notification requirements
- Proper handling of specially protected categories such as mental health, HIV, and substance-use records
Physicians should ask:
- Who is responsible for HIPAA compliance during data migration?
- How will specially protected records be segregated or transferred?
- What safeguards will be in place to prevent unauthorized access?
Ask the Right Patient Data Questions Before You Complete a Sale
Selling your practice can be exciting, but don’t jump into it too quickly. Ask the right questions first. Doing so can save you a significant regulatory headache down the road, or worse, the threat of litigation. Instead, consult a healthcare transaction lawyer that will ensure compliance.
The attorneys at Daniels, Porco & Lusardi, LLP are ready to help. Contact us today for a consultation.