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Chapter 23 Medical Staff






CONCLUSION……….. 23:7



In hospitals and other institutional health care settings, physicians may admit or treat patients only if they have admitting or clinical privileges at that facility. Traditionally, health care institutions operated as “physician’s cooperatives” wherein the physician exercises considerable if not complete control over patient health care administration. Present-day concerns over cost-containment coupled with increased competition in the health care industry has dramatically altered these traditional professional relationships, although physicians continue to assert the dominant role in decisions affecting health care delivery. Some hospitals are restricting privileges by department or directly contracting with providers for services. Alternatively, medical staffs, once the exclusive domain of medical doctors, are becoming diluted. Other health care professionals who are not physicians, such as dentists and occupational therapists, may be granted some form of staff and clinical privileges that carry similar rights and entitlements as those granted to physicians.

In general, in order to provide patient care services independently within a hospital, a physician or other professional must be a member of the hospital staff. The medical staff with hospital privileges represent a unique relationship between the doctor and hospital: the medical staff is considered to be an unincorporated association, and the hospital is not necessarily an employer. A physician with staff privileges may not even be considered an agent of the hospital.

Each staff member is considered a wholly independent contractor with certain obligations to the hospital.

Typically, the hospital medical staff, administration and governing board make staff membership determinations according to procedures outlined in the hospital by-laws. This triad, staff, administration, and board, is known as the “three-legged stool” of hospital organization and remain the predominant form of structure for acute care facilities in the United States. This chapter will consider issues affecting the grant, limitation, and revocation of staff privileges in the Nevada health care organizational setting.



Traditionally, physicians have exercised considerable control over administrative matters in the facilities at which they had privileges because they were, according to one view, customers who could easily take their business elsewhere if they weren’t satisfied with the conditions at a particular institution. In many respects, the common law, Nevada statutory law, and the Joint Commission on Accreditation of Health Organizations (“JCAHO”) reinforce the medical staff as a self-governing entity, collectively operating independently within the physical and administrative structure of a facility.

Hospitals and certain other health care facilities in Nevada must be accredited by the JCAHO in order to be licensed. The JCAHO is an independent non-profit organization, and the nation’s oldest and largest standards‑setting and health care accrediting body. Currently, the JCAHO evaluates and accredits more than 18,000 health care organizations in the United States, including hospitals, health care networks, managed care organizations, and health care organizations that provide home care, long term care, behavioral health care, laboratory, and ambulatory care services. The JCAHO’s express goal is to improve the quality of health care for the public by providing accreditation and related services that support performance improvement in health care organizations. JCAHO determinations have significant effect on the viability of a health care facility: JCAHO accredited hospitals are automatically deemed to be in compliance with Medicare conditions for participation and thus are able to participate in Medicare and Medicaid. Moreover, the JCAHO endorses the staff privileges arrangement by which physicians and other health care professionals offer medical services at custodial hospitals administered as a business.

Ideally, a hospital administration aspires to fill their staff role with the best physicians available. In theory, this results in maximum profitability with minimum liability through the highest quality health care. The law grants substantial deference to institutional judgment and, absent an egregious public policy violation such as discrimination, staff privilege decisions will rarely be disturbed on judicial review. In fact, a physician who resorts to the courts without exhausting internal procedures will likely find his complaint dismissed in summary judgment. However, a decision challenged for discriminatory basis (e.g., privileges denied because of the applicant’s race) in a federal action is not subject to the requirement to exhaust internal remedies.

Nevada law requires that various health care organizations establish a medical staff as a self-governing entity. Health care organizations subject to the Nevada administrative code provisions regulating medical staff include hospitals, emergency care facilities, extended care facilities, nursing homes, and centers for ambulatory surgical care. According to JCAHO, the medical staff has overall responsibility for the quality of professional services, and as such, controls physician staff appointments, reappointments, delineation of privileges, and many peer review processes.

The Nevada code reiterates the broad JCAHO mandates. For example, the medical staff at all Nevada health care facilities is responsible to the facility’s governing body for the quality of all medical care provided to patients and for the ethical and professional practices of its members. NAC 449.358. The law further provides that staff appointments in hospitals must be made by the hospital governing body, taking into account recommendations by the active members of the staff. However, the active staff has almost sole responsibility to self-govern its conduct including the organization of the staff, the adoption of written rules for its governance, election of officers, delineation of staff privileges, and maintenance of proper quality of all medical care and treatment in the hospital.

Nevada law requires that a hospital establish a credentials committee to review applications for staff privileges. The committee reviews applications and then makes recommendations for appointments and reappointments to all categories on the staff.

Nevada law also requires that a hospital establish a joint conference committee that is composed of members of the medical staff, the governing body, and the administrative staff. This committee must meet regularly and is responsible for creating and maintaining liaisons and proper communications within the hospital.



Nevada law expressly enumerates certain responsibilities that are the exclusive domain of the medical staff. For example, the hospital medical staff is responsible to ensure the maintenance of medical records at the required standard of completeness.



Many hospitals have developed policies which allow for closed departments, or have entered into exclusive contracts for specialty services. At least one Ninth Circuit court decision has held that “direct contracting,” whereby the hospital and a physician engage in exclusive and direct contractual relations, is not per se illegal or anti-competitive. Hospitals close a department or engage in direct contracting because these arrangements are often more efficient and provide a more consistent, closely supervised level of care because services are provided by only a few static physicians. Physicians who are party to such arrangements benefit financially from either a per diem or salaried employment, and the stability of regular work. Other practitioners abhor the arrangements because they stifle the marketplace and tend to shift staffing decisions to the hospital administration or governing body. These arrangements have been challenged in court under claims that they violate due process rights, constitute a breach of contract, are anti-competitive, or constitute a tortuous interference with practice. The challenges have failed.

In public or state-managed hospitals, the denial, revocation or limitation of staff privileges has been argued to constitute a deprivation of a property interest and therefore a violation of due process. There is no such constitutional due process requirement applicable to private health care facilities, unless there is state action in the credentialing decisions. In Nevada, the Board of Hospital Trustees is responsible for establishing necessary regulations for medical staffs at county hospitals. NRS 450.180. Nevada law establishes some minimum procedural requirements for accreditation procedures which, if followed, satisfy the constitutional mandate.

Private hospital accreditation determinations are presumed valid if produced in substantial compliance with the medical staff by-laws and any other relevant internal procedures. Additionally, applicants may voluntarily waive specific procedures during the course of review proceedings. Some courts have even upheld a release of liability executed as a part of the application for staff privileges. In general, courts are very deferential to the expertise and autonomy of the active staff and their accreditation decisions. This reluctance to disturb private accreditation decisions is consistent with Nevada statutory law granting limited immunity to participants in peer review.

Staff privileges decisions are most commonly based on traditional notions of merit – competency, experience, and quality of care.   Courts have upheld accreditation decisions based on a variety of other factors when the hospital can demonstrate that such factors are reasonably related to the quality of medical care. These factors may include the inability to work with others, failure to maintain a license, failure to comply with hospital policy, or failure to maintain membership in a professional association.

Perhaps the most widely disputed practice is known as “economic credentialing.” Economic credentialing reviews a candidate’s practice for over-utilization of medical and diagnostic procedures. The House Delegates of the AMA has opposed economic credentialing, arguing that the practice relies on factors unrelated to quality.

Many states prohibit private hospitals from denying clinical privileges based on specialty or type of practitioner, such as an M.D. over a D.O. Nevada law only prohibits hospitals from automatically granting or denying clinical privileges to a Dentist because he or she is licensed as a Dentist. Otherwise, Nevada law requires that the medical staff devise rules and procedures for making adverse privilege determinations. In general, courts review adverse determinations to ensure that the rules and procedures are not entirely arbitrary or capricious, and then to ensure the decision was made in compliance with such rules and procedures.

Staff privileges do constitute an employment arrangement, or promise of employment. Absent an employment contract or a contract specifying a term of employment, the physician or other practitioner is employed at-will. It has been argued that credentialing creates an enforceable employment agreement between a physician and hospital, but termination or restriction of privileges is subject to the same bylaws provisions that gave rise to the implied contract. So as long as the staff abides by its own by-laws, adverse determinations will be enforced. Moreover, the Nevada Supreme Court has held that district courts lack jurisdiction and therefore the right to review the decisions of the governing boards of private hospitals. Lakeside Community Hospital, Inc. v. Levenson, 101 Nev. 777 (1985). Previously, the courts had engaged in such a review and applied the arbitrary and capricious standard mentioned earlier. Moore v. Board of Trustees of Carson-Tahoe Hospital, 88 Nev. 207 (1972). Presently, the Nevada Supreme Court prohibits judicial review of staff privilege decisions reasoning that:

The weight of judicial authority in this country denies judicial review of decisions of governing boards of private hospitals to appoint or remove members of their medical staffs. The action of hospital trustees in refusing to appoint a physician to its medical or surgical staff, or declining to renew an appointment that has expired or changing the requirements for staff privileges, is not subject to judicial review. The action of the board of trustees is final in such matters. A court may not substitute its judgment for that of the hospital trustees’ judgment. Lakeside Community Hospital, Inc. v. Levenson at 778.



As mentioned earlier, a physician with staff privileges at a hospital is not necessarily an employee or agent of the hospital. The privileges represent a provisional bundle of mutual obligations, rights and entitlements between the practitioner and the institution. However, patients who pursue medical malpractice claims against physicians have attempted to hold liable the hospitals at which the physicians maintained staff privileges. These plaintiffs have argued that even though there is no employment relationship between the hospital and the physician, the elaborate procedures by which privileges are granted and the degree to which the hospital and its staff supervise a physician with privileges, gives rise to an agency relationship between the two and creates vicarious liability in the hospital for the physicians wrongful acts.

Two recent cases in Nevada have confronted this proposition and held that the hospital staff privileges do not create an agency relationship between the hospital and physician and therefore there is no vicarious liability in the hospital. Schlotfeldt v.Charter Hospital of Las Vegas, 112 Nev. 42 (1996); and, Oehler v. Humana, Inc., 105 Nev. 348 (1989). However, the hospital remains liable for any negligent or wrongful acts committed by a bona fide employee or agent.




Physicians and other practitioners have traditionally practiced at hospitals and other health care delivery institutions through the grant of staff privileges. Such privileges do not per se constitute an employment, or even agency relationship, between the hospital and practitioner. Nevada law requires that private hospitals, emergency care facilities, extended care facilities, nursing homes, and centers for ambulatory surgical care establish and organize a medical staff under the institution’s governing body. Furthermore, the institution must craft policies and procedures to govern the provision of staff privilege to applicants, and to credential acceptable applicants. Similar to many other important developments in health care services, economics and increased competition have spurred changes in the traditional staff privileges regime. Direct or exclusive contracts for critical care or specialized procedures are becoming increasingly more common, and reduce from the marketplace certain opportunities previously available for practice.