The ABCs Of Records Retention
With the beginning of every new year, when file cabinets and storage rooms are bulging and begging to be decluttered, dental teams often have questions about the retention and release of patient records and business tax records. Guidelines for records retention vary widely, depending on who you talk to, which state you reside in, and your unique tax situation. The purpose of this article is to give you some general guidelines. It is imperative that you review your state laws before discarding patient records and consult with your accountant regarding retention of business records.
The length of time that a dental practice is required to retain patient records varies widely from state to state. Most states require dentists to retain records for at least six years from the date of the patient’s last appointment. If the patient is a minor, records may need to be retained for at least six years after the age of majority/adulthood. However, be aware that some states require dentists to retain patient records longer. Some require dentists to retain patient records for seven years; others require ten years. To know your specific requirements, check your state’s dental regulations (see page 4). If your state has no patient records retention mandate, contact your risk liability carrier to ask its preference.
As an example of the type of information that may be found in state dental regulations, the New Jersey Board of Dentistry requires providers to retain patient records for a period of seven years from their last date of treatment. Original records must be retained by the office and should not be released. After the seven-year period, it is up to the provider how long he/she wishes to retain patient records.
A patient may request a copy of his/her records by doing so in writing with specific instructions as to where to send the record. Under New Jersey regulations, the records must be provided to the patient within fourteen days of the written request. Other states require dentists to provide records within five days of the patient’s written request. Others allow up to thirty days.
In New Jersey, a dental practice is permitted to charge a fee up to $1 per page, not to exceed $100 for the entire record plus an additional charge of up to $10 to cover the cost of retrieving the records. (Keep in mind, however, that HIPAA's Privacy Rule does not allow covered entities to charge a fee for retrieving records.) The amount dentists are allowed to charge for copying records also varies widely from state to state and is often updated annually or bi-annually to reflect inflation.
If dental x-rays are requested, New Jersey allows dentists to charge a reasonable fee for the cost of duplicating the x-rays. Dentists are not permitted to withhold records because of a balance due on the patient’s account. This is consistent with the ADA’s Code of Ethics. However, in New Jersey, state law allows dentists to withhold records for initial diagnostic services if the fee has not been paid. Also note, in New Jersey, if your office has terminated a patient from your practice, you may not charge for duplication of the patient’s records.
Dental teams often ask how long they need to keep third party explanation of benefits (EOBs). This is often defined in your state’s dental regulations. If not defined in your state laws, the American Dental Association’s publication, Dental Records*, recommends that EOBs be kept for seven years.
Business and Tax Records
In general, the IRS requires a business/dentist to keep tax returns and records for at least three years. However, in the event of an audit, the IRS may go back to the prior year’s tax returns. For fraudulent returns, there is no period of limitations—which means that the Internal Revenue Service can go back any number of years to audit your books. As such, maintaining copies of your tax returns and documentation permanently is often recommended.
Dentists should keep records pertaining to asset purchases (dental equipment, furniture, leasehold improvements) for at least three years after disposal of the property. Some accountants recommend they be kept permanently. Keep all business incorporation records in a permanent file that is easily accessible.
Advice for the retention of employment records may vary from state to state as well. Our firm recommends that employment applications for current employees be kept at least seven years after the employee is terminated from your office. We recommend that applications for employees who were rejected for hire be kept for at least one year. Dental Records advises dentists to keep employment applications at least three years for those who were not hired. In keeping with IRS requirements, you must maintain employment tax records for at least four years after the date that the tax becomes due or is paid, whichever is later. Many dental practices have a payroll service that maintains their records. If a business is terminated or there is a change in payroll services, be sure to verify that there will be access to the prior year’s employment records.
In today’s electronic age, an increasing number of dental practices are “paperless” and as such, it is easier to maintain records for longer periods of time. It is imperative that electronic records be backed up regularly and a copy of the back-up be kept off-site so that it can be easily retrieved, if necessary.
*The ADA publication, Dental Records, can be found at here . If you would like a copy of our recommended tax records retention guidelines, please send an email to: Healthcare@nisivoccia.com with “Records Retention” in the subject line