Denying medical staff privileges based on economic credentials.

• Author: Difranco, Sandra
• Position: Competitor physicians - Ohio

1. INTRODUCTION

   A hospital should be able to deny a competitor physician medical staff privileges. The hospital administration, governing body, and peer review committee are qualified to determine whether a physician should be denied medical staff privileges. These three entities are able to consider the qualifications of the physician, the need for additional medical staff at the facility, and whether another staff member is in the hospital's best "business" interest. The hospital administration oversees the performance of the executive duties of a hospital. (1) A governing body is the term that the Joint Commission on Accreditation of Healthcare Organization [hereinafter "JCAHO"] uses to describe who exerts the ultimate control and represents ownership of the facility. (2) The peer review committee consists of physicians on the medical staff; it is an evaluation of a physician's performance by other physicians, usually within the same geographic region and medical specialty. (3)

   Under Ohio Revised Code ([section]) 4731, a physician who is licensed may lawfully practice medicine, thus, the professional license is a legal prerequisite to practice medicine. (4) Physicians are unable to build a successful practice without the ability to exercise hospital staff privileges. (5) Likewise, physicians are extremely important to a hospital because without its medical staff, a hospital would not be able to care for its patients. (6) A physician without hospital staff privileges would find it difficult to compete with those physicians who have been granted privileges and can offer patients a wide variety of services.

   Although a physician needs staff privileges in order to provide his services to patients, a hospital cannot permit all physicians access to hospital facilities. The hospital has a duty to review the credentials of all the physicians who desire staff privileges and to allow privileges only to those deemed competent. (7)

   Health care costs are continuing to rise. This forces hospitals to consider the cost and efficiency of each physician when making privileging decisions. However, hospitals cannot deny a competitor physician staff privileges strictly based on economic factors. (8) If this is the only consideration that the hospital utilizes, a denial or restriction of privileges based solely on competitive considerations may expose the hospital to liability under federal antitrust as well as state tort claims. (9)

   This Note will focus primarily on Ohio laws and statutes. A comparison with other jurisdictions also will be analyzed. This Note will illustrate the complexities and ambiguities that exist regarding how a physician and hospital are associated with each other. This Note attempts to accomplish the following: (1) discuss what medical staff credentialing entails, (2) discuss what constitutes economic credentialing, (3) analyze the current law regarding medical staff credentialing, (4) analyze the current law regarding economic credentialing, and (5) propose a solution to the current system regarding the vague "relationship" that exists between a physician and a hospital. This solution would encourage hospitals to manage their affairs similar to a business operation. There would be an employer/employee relationship between a hospital and all physicians with medical staff privileges. This Note will explain why a hospital should be able to deny a competitor physician medical staff privileges.

2. DEFINING MEDICAL STAFF CREDENTIALING IN OHIO

   1. Ohio Hospitals

      In order for a hospital to operate in Ohio, it must either be accredited by the JCAHO, the American Osteopathic Association [hereinafter "AOA"], or certified by Medicare. (10) The JCAHO and AOA each require a hospital, that seeks accreditation, to have a single organized medical staff. (11) A hospital seeking certification from Medicare, a federal payment program, must also have an organized medical staff. (12) The JCAHO and AOA have detailed requirements as to what needs to be included in the medical staff bylaws. (13)

      The Ohio Revised Code provides that each hospital must have a mechanism for determining who may obtain medical staff privileges. (14) This is the only statutory provision that Ohio has regarding who is eligible for medical staff privileges. Therefore, each hospital individually determines the mechanisms that it will employ regarding medical staff privileges. The statute requires the governing body of every hospital to set standards and procedures in considering applications for staff membership and staff privileges. (15) For example, the governing body of a hospital must consider the applicant's respective state licensure in considering a physician for its staff. (16)

   2. Medical Staff Bylaws

      Medical staff bylaws are legal documents that hospitals use as a means of governance for the facility. (17) Although the medical staff drafts policies and procedures, the governing body assumes legal responsibility for the hospital and thus is ultimately responsible for approving bylaws, policies, and procedures. (18) The bylaws create a framework within which the medical staff can act with a degree of freedom in order to accomplish their tasks. (19)

      A description of the medical staffs organization is found in the hospital bylaws. Each hospital has its own set of bylaws that the medical staff must follow. The JCAHO provides in part that the hospital bylaws must define the method of selecting officers for medical staff membership; the qualifications and responsibilities of officers; the conditions and mechanisms for removing officers from their positions; the requirements for frequency of meetings and for attendance; and a mechanism to provide for effective communication among the medical staff, hospital administration, and governing body. (20)

   3. Medical Staff Membership

      The medical staff is a group of physicians and other health care professionals permitted by state law and a hospital to function as a group and manage different aspects of the hospital's business. (21) The medical staff is one of the three components of hospital governance, along with the governing body, and the hospital administration. One responsibility of the medical staff under the hospital bylaws is to review applications for medical staff membership and privileges. (22) The medical staff then makes its recommendations regarding the applicants to the governing body that makes the final determinations. (23)

      The medical staff is self-governing and is responsible for the for the quality of the professional services provided by individuals with clinical privileges. (24) Physicians at the hospital who have obtained medical staff privileges must adhere to the medical bylaws, rules and regulations, and policies that are implemented as part of the medical staffs performance-improvement activities. (25)

   4. Hospital Credentialing

      The medical staff is largely responsible for the credentialing process. Physician credentialing is the process of gathering relevant data regarding a physician's qualifications for membership to a particular medical staff. (26) This data will serve as a factor in determining whether a physician is granted or denied staff privileges. (27) The specific data that is evaluated is at the discretion of the institution. Credentialing is usually a two-pronged process, which involves establishing requirements and evaluating individual qualifications for entry into medical staff membership. (28) First, credentialing involves considering and establishing the professional training, experience, and other requirements for medical staff membership. (29) Second, credentialing involves obtaining and evaluating evidence of the qualifications of individual applicants. (30)

      A hospital has specific mechanisms which it utilizes when deciding whether to deny or grant a physician medical staff privileges. Based on medical staff recommendations and the hospital bylaws, the governing body has the final decision in staff privilege decisions. (31) If a physician has been denied staff privileges and feels that the decision was made in a discriminatory manner or was an adverse decision he is entitled to a fair hearing and an appeal process. (32) Decisions to deny a physician medical staff privileges must consider criteria that is directly related to the quality of patient care. (33)

      A physician who desires membership at a hospital fills out an application for the medical staff; the physician is then given a written copy of the hospital bylaws, rules and regulations, and policies. (34) The applicant then signs an agreement, if granted medical staff privileges, the physician will be bound to the bylaws, rules and regulations, and policies. (35) In the hospital bylaws, there is a section that indicates the criteria that the medical staff and hospital board will evaluate. (36) The hospital then verifies this information from the primary sources. (37)

      The credentialing process includes information regarding a suspended or pending suspension of the applicant's license. (38) It also inquires as to whether the applicant was denied or had privileges revoked at another organization. (39) Applicants consent to the hospital verifying any of the information that they have disclosed. (40) The credentialing is made for a period of not more than two years. (41)

      The applicant applies for privileges for which he has documented experience in performing. (42) Clinical privileging determines the minimum training and experience necessary for a clinician to competently carry out a particular procedure. (43) It also entails whether the credentials of the applicant meet the requirements of the hospital and its bylaws. (44) Finally, privileging allows authorization to carry out the procedures that a physician has requested. (45) According to JCAHO's 1998 Comprehensive Accreditation Manual for Hospitals, each hospital should have professional criteria as the basis for granting initial or reviewed/revised...