How do I exit or sell my share of an OB/GYN practice?

You exit on the terms your buy sell agreement already holds, at a value its formula produces, with one OB/GYN specific bill settled before anything else: the tail on your years of practice. Your share carries its malpractice history out the door with you. A buyer, whether your partners, a hospital system, or an incoming physician, is purchasing equity in a practice whose past includes your deliveries, and the negotiation that matters is who funds the coverage for those years after you leave. Settle the valuation, the tail, the restrictive covenants, and the payout schedule in that order, in writing, before you give notice, because notice starts clocks in most agreements and clocks remove leverage.

Part of the OB/GYN hub.

What the share is worth, and who decides

Most established partners do not negotiate a price at exit. They executed a formula at entry: a multiple, a book value method, or an appraised value process written into the buy sell agreement, and the exit runs on that paper. Read it before you model anything, because the formula you signed as a new partner is the price mechanism now, and surprises here are almost always reading failures rather than bad faith. The value generally reflects the practice's tangible assets, its receivables, and whatever goodwill the formula admits, which is often less than the departing partner hopes, because the patients attach to the physicians who remain. A hospital system purchase prices differently, with its own counsel and a longer timeline. Either way, the household side needs the same honesty. The case household, Lisa and Mark, holds investable net worth of about $400,000 beside a mortgage of about $800,000 on a $1,200,000 home, with about $25,000 of reserves against about $25,000 of monthly spending. Model the payout schedule against the mortgage and the reserve before treating the buyout as retirement money. Payouts arrive over time in most agreements, and the household plan has to bridge the schedule as written.

The tail at exit, priced with real arithmetic

If your years ran under claims made coverage, your departure terminates the policy as to you, and the tail is a one time lump sum priced at the common band of 150 to 200 percent of the mature annual premium, billed generally within about two months of cancellation. Run the arithmetic from the AMA table. In Florida, with a mature premium of $243,988, the tail at 150 percent comes to $243,988 times 1.5, which equals $365,982, and at 200 percent it comes to $243,988 times 2, which equals $487,976. In Philadelphia, at a premium of $135,974, the band comes to $203,961 at 150 percent and $271,948 at 200 percent. In California, at a premium of $49,804, the band comes to $74,706 at 150 percent and $99,608 at 200 percent. Who pays is a document question: your partnership terms may assign it to you, to the group, or to a buyer who carries your prior acts, and some policies waive the tail at retirement. The reason the bill is so large is the exposure behind it. In many states the malpractice clock for a child does not start running until the patient turns 18, so the tail buys protection against claims that may not exist for nearly two decades. An exit that ignores the tail is priced wrong by six figures in the high premium states.

Sequencing the exit well

Sequence the work in the order that protects you. First, read the full document set in a quiet season: the buy sell agreement, your employment terms, the restrictive covenants, the retirement plan documents, and your policy declarations page with its retroactive date. Second, price the tail with your carrier in writing and confirm whether a retirement waiver or a buyer nose coverage offer can carry the years instead. Third, settle the practice side conversations: valuation timing, payout schedule, call duties during the notice period, and how patient transition is handled, because a clean clinical handoff is part of what the remaining partners are paying for. Fourth, run the household plan at the post exit income: gynecology only practice, part time work, or full retirement each changes the reserve target and the insurance set. Refresh the estate documents in the same season, because the practice interest was likely named in them. The exits that go badly are the ones compressed into a single season by a resignation letter written before the paper was read.

Follow up questions

Can the buyer pay my tail instead of me?

Yes, and it is one of the most valuable terms you can win. A buyer may agree to carry your prior acts under its own coverage, nose coverage honoring your retroactive date, or to fund the tail purchase outright. Either arrangement removes a bill that runs from $74,706 to $99,608 in California up to $365,982 to $487,976 in Florida. At the top of the Florida band, a buyer funded tail is worth more than many partners' full year of distributions, and it should be traded knowingly against the share price.

What happens to my retirement accounts when I sell?

Your 401(k) balance is yours and moves with you, generally rolled over under the plan rules at separation. A cash balance benefit you have accrued stays yours under the plan terms and can generally be rolled into an IRA as a lump sum or taken as an annuity at exit, as the plan allows. What changes is the future: no new deferrals into the group plan and no new pay credits. Read the plan distribution and vesting terms during the document review, because the sale conversation is the wrong place to discover a schedule.

How much notice should I give beyond what the agreement requires?

Give the agreement notice as the floor and the practice reality as the guide. Obstetric practices run on call pools and booked deliveries; a departure announced early enough for the group to recruit and rebalance call protects your relationships and your goodwill. A group planning around your exit negotiates the tail and the payout as business. A group surprised by a departure negotiates them as a dispute. The documents set the minimum. Professionalism sets the actual number.

Related questions

• When does dropping obstetrics and keeping gynecology make financial sense?
• What does buying into an OB/GYN practice with a malpractice history cost?
• Should an established OB/GYN group add a cash balance plan?

Sources

• American Medical Association, Policy Research Perspectives, medical liability premiums (reported $1M/$3M OB/GYN premiums of $243,988 in Florida, $135,974 in Philadelphia, and $49,804 in California, accessed October 2026)
• Physician Side Gigs, malpractice tail insurance coverage (tail coverage at 150 to 200 percent of the mature annual premium as a one time lump sum, retirement waivers, and the child limitations clock, accessed October 2026)
• Today's Hospitalist, tail coverage before you take that job (carriers generally bill tail coverage within about two months of cancellation, accessed October 2026)
• Lisa and Mark, Financial Health Assessment case (an established OB/GYN household with investable net worth of about $400,000 and about one month of reserves, accessed October 2026)

Takeaways

• You exit on the buy sell formula you signed at entry, so read the documents before notice starts any clocks.
• The share carries its malpractice history: the exit tail prices at 150 to 200 percent of the mature premium, from $74,706 in California to $487,976 in Florida.
• A buyer funded tail is a concession worth six figures in high premium states. Price it and trade it knowingly.
• Sequence the exit: documents, tail price, practice terms, then the household plan.