Denying Medical Staff Privileges Based on Economic Credentials

By Difranco, Sandra | Journal of Law and Health, Summer 2000 | Go to article overview

Denying Medical Staff Privileges Based on Economic Credentials


Difranco, Sandra, Journal of Law and Health


I. 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.

II. DEFINING MEDICAL STAFF CREDENTIALING IN OHIO

A. 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. …

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