Leaving Employed Medicine for DPC (Non-Competes, Tail Coverage, Timing and Your Patients)
Leaving employed medicine for direct primary care (DPC) comes down to four things you should sort out before you resign. Read your non-compete with a healthcare attorney (the FTC's national ban never took effect, so state law and your contract decide what it means), arrange tail coverage if your malpractice policy is claims-made, give the notice your contract requires, and handle patient notification the way your contract and state rules allow. None of it is a reason not to go, but each one is much easier to handle before your resignation letter than after.
This guide walks through each piece in the order most founders meet it. It is general information, not legal advice. Employment contracts differ a lot, and the rules on non-competes and patient notice change by state, so plan on at least one hour with a healthcare attorney who reads your actual documents.
Start with your contract, before you tell anyone
The single most useful thing you can do is pull out your full employment agreement, including any amendments, the physician compensation plan and anything you signed when your employer bought your old practice. Read it with a pen in hand and mark every clause that touches these topics.
| Clause | What to find |
|---|---|
| Non-compete | Radius, duration, which services it covers |
| Non-solicitation | Patients, staff, or both |
| Notice period | Days required, with and without cause |
| Malpractice | Claims-made or occurrence, and who pays tail |
| Liquidated damages | Buyout amount if you break a covenant |
| Records and patient lists | Who owns them, what you can request |
| Repayment terms | Signing bonus, relocation, loan forgiveness |
Many founders discover the contract is friendlier than they feared, or that a buyout option exists that is cheaper than moving. Others find a broad clause that shapes where they can open. Either way, you want to know before you sign a lease, not after. Your DPC business plan should reflect whatever you find, including any buyout cost and any months you can't practice nearby.
Ask your attorney one specific question about your non-compete. Does it restrict "the practice of medicine" in general, or only the services your employer offers? A DPC membership practice that bills no insurance can look very different from your old job on paper, but whether that matters depends entirely on your contract's wording and your state's law.
Non-competes and the FTC rule's real status
You may have heard that the federal government banned non-competes. It didn't, at least not in a way that applies to you today. The Federal Trade Commission issued a rule in 2024 that would have banned most non-competes, but a federal court in Texas set it aside before it took effect. In September 2025 the FTC voted to drop its appeal and accept that ruling, so the national ban is not in force.
That doesn't mean the FTC has stepped away entirely. In September 2025 the FTC's chairman sent warning letters to healthcare employers and staffing companies urging them to review their non-competes, and the agency has said it will look at specific clauses case by case. That's useful background, but it won't by itself release you from a clause you signed.
The rules that actually decide your situation are your state's laws. A growing number of states have limited physician non-competes in recent years, and several passed new limits in 2025 alone. Some ban them for physicians outright, some cap the radius or length, some carve out primary care or rural areas, and some leave them enforceable if they are "reasonable". Because this changes nearly every legislative session, confirm the current rule for your state with a healthcare attorney rather than relying on an article, including this one. Check your state's DPC-specific statutes at the same time.
If your non-compete is enforceable and broad, founders usually choose one of three paths. They negotiate a release or a narrower radius (some employers agree, especially for a primary care doctor whose patients aren't a big revenue line), pay a contractual buyout, or open just outside the restricted area and accept a longer drive for a year or two.
Malpractice and tail coverage
Malpractice policies come in two main types, and the difference matters a lot when you leave.
An occurrence policy covers care you gave while the policy was active, no matter when the claim is filed. If your employer insured you this way, you usually don't need anything extra when you leave.
A claims-made policy covers claims only while the policy is active. Once you leave and the policy ends, a claim filed next year about a visit from last year may not be covered. To close that gap you need one of two things.
- Tail coverage (an extended reporting endorsement), bought from your current carrier when the policy ends.
- Nose coverage (prior acts coverage), bought from your new carrier as part of your new DPC policy.
Tail can be expensive, so find out early who pays. Many employment contracts say whether the employer covers tail, splits it, or leaves it to you, and some make it depend on whether you resign or are let go. Ask your current carrier for a written tail quote and ask the carrier you plan to use for your DPC whether they offer prior acts coverage. Then compare the two before you set a resignation date. This belongs in your startup budget alongside your new policy.
Don't let your old policy lapse before your new one starts, even by a day. Line up the end date of the old coverage, the tail or nose coverage and the start date of your DPC policy on one page and have your broker confirm there is no gap.
Notice periods and timing your exit
Physician contracts commonly require several months of written notice. Read the clause closely, because some contracts treat notice differently for resigning "without cause", and some trigger repayment of a signing bonus or loan forgiveness if you leave before a set date.
Good timing usually means your notice period overlaps with the last stretch of launch work. During those months you can register the business, apply for licenses and DEA changes, set up your EMR and membership billing, finish your Medicare opt-out decision and line up space, all while you're still paid. Founders often find a 6-month runway comfortable, and our launch checklist lays the tasks out month by month.
A few practical steps help the last months go smoothly.
- Keep your work and your launch separate. Don't use your employer's computer, email, phone or patient data for your new practice. Keep your planning on personal devices and personal time.
- Leave on good terms. Finish your charts, hand off open results and help your employer arrange coverage. A clean exit protects your reputation and often makes later conversations about records and referrals easier.
- Update your credentials. Plan for your DEA registration address, state controlled-substance registration, NPI details and hospital privileges, since each has its own forms and timing.
Telling patients, the right way
This is the part founders feel most strongly about, and it's also where contracts and state rules matter most. Your patients deserve to know you're leaving and how to get their records, and some states have medical board rules about it. Texas, Ohio and Alabama, for example, each have board rules on a physician's responsibilities when leaving a practice. Other states handle it through general ethics guidance. Who has to send the notice, what it can say and who pays for it varies, so confirm the rules for your state with a healthcare attorney.
Your contract adds another layer. In most employed settings the employer owns the medical records and the patient list, and many contracts include a non-solicitation clause. Never contact patients to recruit them to your new practice in a way that breaches your contract, and don't take or copy patient lists or chart data. Besides the legal risk, it can create HIPAA problems and a messy start to the practice you're building.
What usually works is simpler. A neutral departure notice (often sent by the employer, sometimes jointly) tells patients you're leaving and how to request their records. After that, patients can find you on their own, through your public website, your Google listing and the community work described in our guide to your first 100 DPC patients. When a former patient joins, they sign a records release and your new practice requests their chart the normal way.
A simple order of operations
If you're early in the decision, this sequence keeps you out of most trouble.
| When | Step |
|---|---|
| 9 to 12 months out | Read your contract and meet a healthcare attorney |
| 6 to 9 months out | Get tail and nose quotes, build your plan and budget |
| 6 months out | Give notice, start the formal launch work |
| During notice | Finish charts, agree on patient notice, update credentials |
| Last day | Confirm malpractice coverage has no gap |
| Opening day | Request records only with signed patient releases |
Leaving a job you've held for years is a big step, and it's normal to feel uneasy about the legal pieces. The good news is that thousands of physicians have made this move, the hard parts are well understood, and almost all of them are easier with an attorney's review and a few months of lead time. If you haven't yet, start with our step-by-step guide to how to start a DPC.
The part most guides skip
Every tool in a DPC clinic is good at its own job, and none of them were built to talk to each other. A patient text turns into a refill in the chart, which needs a review, which needs a reply, and the follow-up lives in someone's head. That isn't anyone's fault. The tools just don't share a to-do list.
That's the job Tabflows does. Tabflows is a dedicated tech team for DPC clinics. We connect the tools you already chose and give your team one place for chat, tasks and patient context, with managed workflows for the repeat work like refills, lab follow-ups and onboarding. You keep every tool you picked.
Frequently asked questions
Does the FTC non-compete ban apply to physicians?
No. The FTC's 2024 rule was set aside by a federal court in Texas before it took effect, and in September 2025 the FTC dropped its appeal and accepted that ruling. Physician non-competes are now governed by state law and your contract, though the FTC has said it will pursue individual cases and has warned healthcare employers about overly broad clauses.
Do I need tail coverage when I leave my employed job?
If your malpractice policy is claims-made, yes, unless your employer's contract says they will buy it or your new carrier will cover your prior acts (called nose coverage). Without one of those, a claim filed after you leave about care you gave while employed may not be covered.
Can I tell my patients I'm leaving to start a DPC practice?
Patients generally need to know you are leaving and how to get their records, and some states have medical board rules about that notice. What you can say, who sends it and whether you can mention your new practice often depends on your contract, so have a healthcare attorney review it before anything goes out.
How much notice should I give before leaving to open a DPC?
Give at least what your contract requires (physician contracts commonly ask for several months), and check whether leaving early or without cause triggers penalties. Many founders time their resignation so the notice period overlaps with the last few months of launch preparation.