When selling your optometry practice, most of the focus tends to land on financial negotiations, lease assignments, and equipment valuations. But one of the most important—and sensitive—aspects of any practice transition is the proper handling of patient records. These records are more than just charts and files; they contain deeply personal health information that’s protected by both federal law and state regulations. Failing to handle them correctly can result in significant legal liability, damage to your professional reputation, and a breakdown in patient trust. Understanding how to ethically and legally manage patient record transfers during a sale is a critical part of protecting your legacy and ensuring a smooth transition for your patients and the buyer.
Why Patient Records Matter in an Optometry Practice Sale
In an optometry practice, patient records are central not only to clinical care but also to the value of the practice being sold. These records represent years—sometimes decades—of history, including eye exam results, prescriptions, diagnostic images, treatment notes, and even insurance and billing information. For buyers, access to this data means a better ability to maintain continuity of care and increase patient retention. For sellers, a clean, well-organized set of records can boost the practice’s appeal and value.
However, because these records contain protected health information (PHI), they’re governed by strict privacy rules. Both HIPAA and state-level regulations dictate how records must be maintained, stored, and transferred. Mishandling the process can create exposure for both parties and may even derail the sale entirely. By treating patient records as a critical component of the transaction—not an afterthought—you can protect yourself, your patients, and the success of the deal.
1. Understand Who Owns the Records
Before a record can be transferred, you must first determine who has the legal right to do so. In most cases, especially in solo-owned optometry practices, the business entity itself owns the patient records—not the individual optometrist. However, complications can arise when there are associate optometrists involved, partners who brought their own patient base, or if the practice operates as part of a franchise or under a corporate model.
If multiple providers have contributed to a shared database, ownership of those records may be jointly held or governed by contract. In such cases, the transfer of records must be handled delicately and clearly spelled out in the sale documents. Failure to clarify ownership can lead to post-sale disputes or gaps in patient care. That’s why it’s essential to perform a detailed legal and operational review of your recordkeeping structure early in the sale process. This will help ensure all parties understand who owns what and what can legally be transferred.
2. Comply with HIPAA and State Privacy Laws
The Health Insurance Portability and Accountability Act (HIPAA) provides the federal framework for protecting patient health information, including how that information can be used and disclosed. When selling a practice, HIPAA permits the transfer of patient records as part of the sale because it's considered a "health care operation." However, this doesn’t give sellers carte blanche to hand over records without taking additional precautions. The buyer must be vetted to ensure they have the proper systems, protocols, and safeguards in place to maintain patient privacy.
In addition to HIPAA, individual states often have their own privacy laws that set further restrictions or requirements. For instance, your state may mandate that patients receive advance notice of any record transfer or that certain records (such as minors' or Medicaid recipients’ files) be handled differently. Some states even require patient consent or allow patients the option to opt out of the transfer entirely. The penalties for violating these laws can include hefty fines, legal disputes, and even loss of licensure. It’s essential to work with legal counsel who understands both federal and state-specific requirements to ensure full compliance during the transfer process.
3. Notify Patients of the Change
Perhaps the most important step in transferring patient records is ensuring patients are adequately informed and given a reasonable opportunity to make decisions about their care moving forward. Transparency helps foster trust, reduces confusion, and supports compliance with legal obligations. Notification should be clear, timely, and contain all the information patients need to understand the transition.
At a minimum, the notice should include the name and contact information of the new owner, the date the sale becomes effective, the patient's rights regarding their records (including how to request copies or transfer them elsewhere), and any deadlines or procedures for opting out. While there is no universal method for delivering this notice, best practices include mailing letters to patients' addresses on file, posting signs prominently in your office, and emailing notices when appropriate consent has been given. All notices should be documented carefully so that you can demonstrate you provided sufficient and reasonable communication in the event of any legal challenge.
4. Ensure a Secure and Organized Handoff
Patient record transfers must be handled with care, especially when transitioning from one electronic health record (EHR) system to another or managing a mix of paper and digital records. A successful transfer starts with preparation. Sellers should begin by conducting a thorough audit of their records to confirm that files are up to date, labeled correctly, and free of duplication or inconsistencies. This not only benefits the buyer but also ensures your practice doesn’t leave behind a trail of unresolved issues.
Once ready, the technical handoff should be managed in partnership with IT professionals or EHR vendors who specialize in secure data migration. All digital files should be encrypted, securely backed up, and transferred using HIPAA-compliant platforms. If physical records are involved, they should be boxed, labeled, and documented with care to avoid misplacement or loss. Moreover, both parties should agree on protocols for accessing and using the records post-sale, especially for patients with ongoing treatment needs. A clean, seamless transfer builds buyer confidence and minimizes disruption to patient care.
5. Address Record Retention Obligations
Even after the sale is complete, obligations regarding patient record retention often continue. Many states require optometrists—or the successor practice owner—to maintain patient records for a certain number of years after the patient’s last visit. These timeframes typically range from five to ten years, but may vary based on patient age or the type of care provided.
The buyer and seller must clearly decide who will retain and manage these records, especially if the seller is retiring or relocating. If the buyer agrees to assume record retention duties, the purchase agreement should spell out their responsibilities and ensure they have appropriate systems to store records securely. If records are being archived separately, the storage location, duration, and access protocols should be detailed in writing. Thinking through these details in advance prevents future headaches, particularly if a patient or regulator requests access to old records years after the transaction.
6. Include Clear Terms in the Purchase Agreement
The Asset Purchase Agreement (APA) or Stock Purchase Agreement (SPA) is the legal backbone of any practice sale—and it should contain detailed terms regarding patient records. Too often, sellers assume this aspect will be handled informally or that standard language will suffice. In reality, the APA should specifically address who owns the records, how they’ll be transferred, and what the buyer can and cannot do with the information.
Other important clauses to include are representations that the records are complete and compliant, warranties that the seller has the legal right to transfer them, and indemnification clauses that assign liability in the event of a data breach or regulatory violation. If any third-party vendors are involved in the transfer (like scanning companies or cloud storage providers), their roles and responsibilities should be defined, and proper Business Associate Agreements (BAAs) should be signed. Comprehensive language in the APA reduces ambiguity and protects both parties from costly legal issues down the road.
7. Avoid Common Pitfalls
Despite the importance of patient record transfers, many sellers unintentionally overlook critical steps that could expose them to legal or financial risk. One common mistake is failing to notify patients in a timely manner or assuming the buyer will handle it. Others forget to review and update their recordkeeping systems before the transfer, which can result in the buyer inheriting disorganized or incomplete files. Sellers also sometimes assume HIPAA is the only law they need to comply with, when in fact, state-specific laws may require additional steps like obtaining patient consent or maintaining records for specific durations.
Another mistake is neglecting to address record terms in the Letter of Intent (LOI), which can lead to last-minute disputes during the drafting of the final agreement. By involving legal counsel early and prioritizing patient record issues from the outset, optometrists can avoid these pitfalls and help ensure a successful, legally compliant transition.
Final Thoughts: Protecting Patient Privacy and Practice Integrity
The transfer of patient records during the sale of an optometry practice is not a mere administrative task—it is a legally sensitive and ethically important component of the entire transition. Properly handling this process demonstrates your commitment to patient care, your respect for privacy laws, and your desire to leave your practice in good standing. It also helps preserve the trust and confidence that patients have placed in you, which, in turn, strengthens the goodwill the buyer will be inheriting.
With careful planning, expert legal guidance from an optometry lawyer, and open communication with patients and the buyer, the transition can be both seamless and compliant—ensuring that the legacy of your optometry practice continues long after the sale is complete.
Contact Dental & Medical Counsel for Help Selling Your Optometry Practice
At Dental & Medical Counsel, we have years of experience guiding optometrists through the legal complexities of selling a practice, including the sensitive handling of patient record transfers. Whether you're preparing for retirement, transitioning to a new opportunity, or selling to a corporate group, we’re here to ensure your sale is legally sound, fully compliant, and protects your professional legacy. Contact us today to speak with our team about how to prepare your optometry practice for a successful transition.
Frequently Asked Questions
Q: Do I need patient consent to transfer their records when selling my optometry practice?
A: In most cases, HIPAA permits the transfer as part of a healthcare operation, but some state laws may require notification or consent. Always check with a healthcare attorney.
Q: Who owns the patient records—the optometrist or the practice?
A: Typically, the legal entity that owns the practice also owns the records, not the individual provider. This can vary depending on business structure and agreements.
Q: What’s the best way to notify patients about the sale and record transfer?
A: Written letters, in-office signage, and email notices (when permitted) are common methods. Notifications should include the buyer’s info, the transfer date, and patients’ rights.
Q: How long do I need to keep patient records after the sale?
A: Record retention laws vary by state but usually require keeping records for 5–10 years. The purchase agreement should state who is responsible for ongoing storage.
Q: Can I take a copy of my patient records with me if I join another practice?
A: Generally, no—not without specific patient consent or legal arrangements. Patient records typically remain with the selling entity unless otherwise agreed upon.
Q: What if my records are a mix of paper and electronic files?
A: Both should be inventoried and transferred securely. Use encrypted digital transfers for EHR and properly document and box physical files to avoid loss or disorganization.
Q: Is the buyer automatically responsible for HIPAA compliance once the records are transferred?
A: Yes, once the buyer assumes custody of the records, they must maintain HIPAA compliance. However, the seller can still be liable for how the transfer was handled.
Q: Should the transfer of records be addressed in the purchase agreement?
A: Absolutely. The agreement should clearly state who owns the records, how they’ll be transferred, and outline each party’s responsibilities for privacy and retention.
Q: Can a buyer refuse to take on the responsibility of old patient records?
A: In some cases, yes—which is why this should be discussed early and detailed in the agreement. If not transferring, the seller may need to retain and manage them.
Q: What happens if a patient doesn’t want their record transferred to the new owner?
A: Depending on your state, patients may have the right to opt out or request that their records be transferred elsewhere. You must honor those requests in a timely, compliant way.
About the Author
At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every optometrist deserves the best advice and service so optometrists can do what they do best, treat their patients. We make their lives easier by providing expert guidance, so they can focus on their personal and professional aspirations. We are optometry attorneys.
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About Ali Oromchian, Esq.
Your Optometry Lawyer
In addition to being a optometry lawyer for almost 20 years, Ali is also a renowned speaker, throughout North America, on topics such as practice transitions, employment law, negotiation strategies, estate planning, and more! Ali has helped hundreds of optometrists realize their professional goals and looks forward to aiding you in navigating the legal landscape.
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