Medical Staff Governance & Leadership

HALM CORE CONTENT:

3.3 Health system physician leadership roles

3.4 Medical staff structure and its relationship to governing bodies (e.g., board oversight of credentialing, privileging, employed vs. voluntary models, and disciplinary process)

3.5 Medical staff call obligations and compensation

CASE SCENARIO:

Dr. JS is a seasoned vascular surgeon hoping to move his practice to the hospital. Although he has been in practice for many years across town at a competing hospital system, he has had two partners retire recently, so he is closing that practice and joining an existing practice at the hospital.

He applies for privileges through an online application that performs criminal and malpractice background checks; verifies his medical school, residency, and fellowship credentials; and ensures his specialty board certification is current.

His application is approved by the Credentials Committee, Medical Executive Committee, and community board. After a provisionary review of a specified number of procedures through a focused professional practice evaluation (FPPE), he is granted full privileges and begins his clinical work at the facility.

Dr. JS enjoys several years of active practice and becomes a respected member of the medical staff. This year, several complaints surfaced through the variance reporting system that his clinical skills are “slipping,” as evidenced by long operating room times and several cases with complications. Simultaneously, a review of his ongoing professional practice evaluation (OPPE) metrics by the department chair shows a slightly higher operative mortality rate and higher than predicted “return to the operating room in 24 hours” than his peer vascular surgeons. How does the hospital evaluate and manage this situation to ensure quality care is provided to its patients and it prevents any risk of harm to patients?

The practice of medicine in the United States is a privilege earned by years of education and training. For physicians, that unique and privileged status as a profession means the profession must self-regulate its quality and professional behaviors.(1) The AMA’s code of ethics describes it as,

Peer review by medical societies, hospital credentials and utilization committees, or other bodies, has long been established by organized medicine to scrutinize professional conduct. The peer review process is intended to balance physicians’ right to exercise medical judgment freely with the obligation to do so wisely and temperately. Medicine has a long tradition of self-regulation, based on physicians’ enduring commitment to safeguard the welfare of patients and the trust of the public. The obligation to report incompetent or unethical conduct that may put patients at risk is recognized in both the ethical standards of the profession and in law and physicians should be able to report such conduct without fear or loss of favor.(1)

This obligation to self-govern and manage the quality of its peers is formalized in medical staff structures through bylaws, policies, and the committees described in those documents.

Bylaws, Credentials, Privileges

Medical staff bylaws are the highest order of regulatory documents for the professional medical staff. They are voted on by the entire medical staff, approved by the community board or governing body, and therefore designed to be permanent. Bylaws outline the various categories of medical staff — active, affiliate, and courtesy — and typically describe the various elected offices of the medical staff, including chief of staff (or president of the medical staff), credentials committee chair, departments and their associated chairs, and the membership of the Medical Executive Committee (MEC).

Also included in the bylaws are the qualifications for these roles, the nomination and election process, and the terms of these various offices and committees.(2) The credentialing, peer review, and professionalism policies are often referenced in the bylaws, but are typically a second order of documents and fall under the purview of the Medical Executive Committee and so can be changed and revised more easily because they do not require a vote of the entire medical staff.

Often, these other important policies are assembled into the Medical Staff Rules and Regulations or may be described as the Medical Staff Polices. These documents and policies describe in detail the process and checks and balances that ensure a thorough and fair process in granting privileges and providing oversight to clinical quality.

The Credentials Policy becomes an important policy for each medical staff leader as well as the hospital administrator to understand. The Credentials Policy outlines the process and standards for appointment and reappointment to the hospital’s medical staff and the process by which privileges to do various tasks and procedures in the hospital is granted. Privilege criteria are developed by specialty. Those criteria include the required formal education, training, and prior volumes to demonstrate competence.

Under the Credentials Policy, most specialties will have a set of “core” privileges that all specialists who have completed the specified residency or fellowship training will have mastered, and a set of “special” privileges for more unique or less commonly performed procedures that must be individually granted. At the time of reappointment (typically a two-year interval), a physician must reapply for privileges.

At the time of reappointment, the department chair is tasked with reviewing a physician’s medical staff file to ensure the training and experience are in place, adequate volumes have continued to be performed, and no quality or professionalism concerns exist. If recommended by the department chair, endorsed by the Credentials Committee, and approved by the MEC and Community Board, the entire two-year cycle begins again.

A point of clarification. Membership on the medical staff and privileges in the hospital are related but technically different things. A physician has membership based on meeting the medical staff criteria — licensure, board certification, malpractice coverage, references, etc.

Medical staff membership is typically separated into active, affiliate, or courtesy staff categories based on how much volume of work is done in that hospital. Each membership category has specific rights and responsibilities with respect to committee participation, voting on medical staff business, access to continuing education, and other medical staff services.

Privileges, on the other hand, codify what type of clinical work or procedural activity can be done in the hospital where a physician has membership. Privileges are requested at each reappointment cycle and are specific to the physician’s specialty. Specific privileges are available if a physician demonstrates appropriate training and recent volume at any facility to ensure adequate competency to perform the specific procedure or clinical activity.

So, membership is about what administrative and committee functions a physician can participate in as a member, while privileges describe what clinical activity the member can perform in the hospital.

Focused Professional Practice Evaluation and Ongoing Professional Practice Evaluation

CMS requires hospital accrediting surveys, which typically are delegated to one of several accrediting organizations, including Det Norske Veritas (DNV) or The Joint Commission. CMS requires that the medical staff performs a preliminary review of physician proficiency at the time of granting privileges.(3) These accrediting surveys all have a Medical Staff portion where the reviewing entity ensures this oversight of competency and privileges is occurring. The Joint Commission refers to the initial evaluation as a focused professional practice evaluation (FPPE).(4)

CMS also requires regular, ongoing review of physician competency, which The Joint Commission refers to as ongoing professional practice evaluation (OPPE). Each hospital has some latitude in selecting what goes into those evaluations. These practice evaluations can take the form of chart reviews, procedure observation, or specific performance metrics (mortality rates, unexpected return to the operating room, readmission rates, etc.) If metrics are selected, they must be relevant to the specific specialty of the provider and measurable at the individual provider level.(5)

A focused professional practice evaluation can also be conducted on a periodic basis for a specific provider and involve a specified privileged activity when quality concerns arise. The “for cause” FPPEs must be confidential and conducted according to the hospital’s peer review policy.

Variance Reporting and Protecting Quality of Care

Hospitals invariably employ some type of confidential quality and safety reporting, referred to by terms such as incident reporting systems, variance reporting systems, unusual occurrence reporting systems, and patient safety reporting systems. To succeed, these systems need a supportive environment that protects the privacy of staff who report occurrences.

Ideally, the systems should be used by a broad range of personnel, not just physicians. The events must be cataloged, tracked, and the information disseminated in a timely fashion. And finally, a reliable process must be in place for reviewing reports and developing action plans.(6)

The professional medical staff have accountability for professionalism concerns and clinical competency concerns that are brought forward in the variance reporting system. Professionalism issues may include rude behavior, inappropriate language, privacy or HIPPA infractions, and other concerns. Clinical competency may stem from cognitive or physical impairments that influence the ability to safely deliver care. Gaps in knowledge or technical proficiency also fall under clinical competency concerns.

A process should be in place whereby concerns identified in the variance reporting system, whether professionalism or clinical competency, can be referred to the medical staff structure.(7) Typically, this referral process is codified in the bylaws, professionalism policy, and the peer review policy of the medical staff. The ideal process maintains a high degree of confidentiality, includes an opportunity for the practitioner to convey their recollection of the clinical event or circumstances, and philosophically should be oriented to encourage continuous improvement rather than punitive or disciplinary in nature.

Adverse events and clinical errors must be thought of as important learning opportunities for an entire department. That way, the process can mitigate future safety concerns for the broader medical staff rather than just an individual physician.

There are, of course, “never events” that may result in the loss of privileges or result in a practitioner losing their membership on the medical staff, but those tend to be the exception and result from intentional or egregious actions that take the practitioners far outside the standard of care or represent permanent changes in the physical health of the provider.

Examples of these “never events” exist in both the clinical competency and professionalism domains. Clinical competency concerns that lead to the removal of privileges include physical dexterity and cognitive changes in the physician. Examples are a physician who suffers a stroke that impairs their manual dexterity, uncorrectable loss of visual acuity, and early onset dementia.

Professionalism concerns that could lead to the loss of membership on the medical staff may include ignoring relationship and sexual boundaries with a patient, illegal use or diversion of controlled substances, or intentionally causing physical harm to a patient or caregiver. When privileges are restricted or when membership is unilaterally terminated by leadership, those circumstances are reportable to the State Board of Medicine and the National Practitioner Data Bank (NPDB).(8)

Some evaluations of clinical competency and professionalism take time, and because the decisions have a profound effect on future patient care and the career of a physician, they should not be made in haste. For these reasons, it is often necessary to ask a physician to voluntarily refrain from practice for a finite time frame to allow time for the investigation or evaluation.

When a physician voluntarily refrains from exercising a privilege, it is not considered a reportable event to the NPDB or State Medical Board. If, however, the practitioner does not willingly choose to refrain from practice, the MEC can temporarily suspend a physician’s privileges. Because this is an adverse action by the MEC, it becomes a reportable event.

In situations where there may be immediate risk to patient safety, the chief of staff, working in concert with the hospital administrator, can temporarily suspend a physician’s privileges pending a more formal decision by the MEC.

Peer Review and Performance Improvement Plans

Many concerns identified by variance reporting and other direct complaints to the medical staff office will, with further investigation, be found to have no merit. Other concerns may simply require brief education on hospital policy or a reminder of expected professional behavior. An even smaller subset will require a performance improvement plan to be put in place.

Most hospitals use a combination of hospital personnel and department chairs to do the initial data gathering and clinical circumstances review. The evaluation should include input from the physician involved. Many times, a peer specialty reviewer is needed to provide specific input when the department chair may not have direct clinical experience in a highly specialized clinical area.

Medical staff policy dictates at what time this evaluation is brought to the peer review committee to make decisions on what action is needed, if any. Confidentiality and impartiality are key fundamentals for a peer review committee to successfully carry out its work without injuring the reputation of its physician workforce. Peer review committee members may have concerns about legal action against them if they put in place a corrective action or restriction of privilege against a colleague, but all 50 states have peer review protection statutes that confer immunity.(9) If a medical staff member in a leadership role on the peer review or MEC is following their medical staff policies and maintaining confidentiality, the medical staff leader has little to worry about in this regard.

Professionalism concerns of a minor nature are best dealt with in a graduated or progressive fashion. A simple conversation between department chair and physician to alert them to the complaint, remind them of the medical staff professionalism policy, and the expectations around behavior, may be all that is necessary.

If ongoing professionalism concerns occur, the medical staff leadership has other interventions at their disposal to encourage a change in behavior. Those interventions may include requiring the physician to explain themselves to the MEC, complete an appropriate educational seminar or curriculum to address the behavior, have privileges temporarily restricted, or participate in an organized coaching or mentoring program.

In instances where the physician involved has no insight or if no improvement is noted, the medical staff can move to terminate membership. All conversations and interventions should be documented in the physician’s medical staff office file.

Clinical concerns tend to be addressed with education and retraining if possible. A follow-up focused professional practice evaluation (FPPE) is often used to ensure the intervention has resulted in satisfactory, sustained improvement. And like professionalism concerns, documentation of clinical concerns and the recommended performance improvement plan is of paramount importance to gauge improvement and to ensure future leadership is aware of prior concerns or deficits.

The “Fair” Hearing

Most medical staff bylaws have provisions to ensure due process is provided to physicians on the medical staff with respect to decisions about membership, privileges, or a performance improvement plan.

Typically, these provisions outline a process where a physician member who disagrees with a decision of the MEC that terminates their membership or impacts their ability to exercise their privileges is offered the opportunity to have a group of previously uninvolved medical staff members review the evaluation and decision-making process to assess whether the decision was made in compliance with the medical staff bylaws and policies.

While technically not a legal proceeding and usually conducted without legal representation from either side, these reviews are referred to as a hearing or a “fair hearing.” The evaluation is meant to focus on whether the peer review committee and MEC followed its process rather than to revise the recommended action against the physician.

If the hearing finds the process was aligned with all medical staff bylaws and policies, the action will stand. A physician may still sue the hospital or medical staff at this point, but as stated previously, there is broad protection and immunity here for medical staff leaders acting in good faith and according to the governing documents.

Physician Leadership Roles in the Hospital

Most hospitals have an elected leader of the medical staff designated either the chief of staff or president of the medical staff. Typically, a candidate for this position is nominated by either the medical staff or MEC and endorsed by the hospital administration before being put to a vote of the entire medical staff. Many hospitals have a process such that there are progressive roles that must be held before being eligible for the chief of staff such as department chair, secretary or treasurer of the medical staff, and even a probationary period of vice chief of staff or president-elect before they are moved to the lead role.

The chief of staff or president of the medical staff position is typically of limited tenure — often two years. This finite duration of term presents some problems in continuity with physician issues of professionalism or clinical competency that play out over many years, but it ensures mitigation against any cronyism or personal bias, and builds redundancy and depth in the hospital’s clinical leadership.

In contrast to the limited term and elected nature of the chief of staff/president of the medical staff role, most hospitals now employ a vice president of medical affairs (VPMA) or a chief medical officer (CMO).(10) Historically, the VPMA title predates the CMO title, but both are employed leadership roles that are not elected by the medical staff and that report directly to hospital administration.

The VPMA role was developed to provide corporate expertise, consistency, and longevity to the ranks of the hospital physician leadership and was often viewed as a disciplinary role that worked closely with hospital operations to ensure physician compliance with hospital policy, state and local laws, as well as regulatory and accreditation standards. The VPMA would refer physician non-compliance to medical staff committees and ensure that policy was upheld.

The limited scope of VPMA has now been largely replaced with the broader role of the CMO.(11) The CMO still has responsibility for the medical staff office and ensuring physician compliance with policy and regulatory statutes but has been given more accountability for overall hospital quality and safety performance and a host of new obligations around strategy, growth, and innovation of clinical services in the hospital.

Especially with movement toward value-based care revenue, the management of appropriate utilization and cost-effectiveness of the care model are now very important and represent areas the VPMA typically did not address.

Similar to the distinction between the elected medical staff roles of chief of staff/president and the CMO, there are elected departmental physician leadership roles that exist alongside employed medical director roles. What looks somewhat redundant on the surface actually has important distinctions when dissected more fully.

In most non-academic settings, the department chair leadership role is an elected medical staff leader for each specialty area, such as surgery, medicine, anesthesia, obstetrics, and emergency medicine. These chair positions are time-limited, elected by their peers, and for the most part concern themselves with the medical staff affairs of credentials, privileges, peer review, and professionalism issues. The chair may be engaged with quality and patient safety but primarily from the standpoint of the physician’s practice and behavior.

Contrast this with an employed medical director or service line physician leader who has responsibility for business development and administrative management of a group of employed physicians, including compensation and scheduling, cost-containment initiatives, and equipment purchasing decisions.

The Changing Nature of Hospital Call Requirements

Requirements for physicians to participate in emergency department subspecialty “call” are included in the Medical Staff Bylaws, Medical Staff Rules and Regulations, or Policies of the Medical Staff. These requirements are aligned with the hospital’s Emergency Medical Treatment and Labor Act (EMTALA) obligations and ensure the hospital can reliably provide a full complement of specialty services.

Because these policies are a requirement of a physician’s medical staff membership and privileges, there is a strong incentive to participate and take part in the specialty call coverage; otherwise, the physician risks losing the ability to admit and manage patients in the hospital. The medical staff obligation to take emergency call historically has not included any financial incentive.

With the development and spread of ambulatory surgery centers and the expanded ability to provide care in non-hospital settings, however, many medical subspecialists no longer depend on the inpatient setting for a viable practice. Consequently, specialists who do not need inpatient privileges may request a call coverage stipend from the hospital to compensate them for providing this call coverage for the hospital, or they may decide to drop their hospital privileges.

There is also recognition that, depending on the volume of specialty call requests, this commitment can be disruptive for a physician’s practice, and especially in essential specialties like general surgery, orthopedics, neurosurgery, and urology, the hospital may want to provide a per-day stipend to secure predictable coverage of specialty call and consultation.

Third-party “fair market value” assessments by specialty are available regarding what a hospital can pay for these call services and not run the risk of overpayment and an anti-kickback statue violation. As a result, most hospitals now have a complicated list of arrangements for emergency call coverage. Some of that coverage is non-reimbursed medical staff obligations and some includes a daily stipend that is negotiated each year and varies in amount across specialties.

Chapter Summary

The functional processes and committees of the professional medical staff remain an important component in hospitals across the United States to ensure quality and clinical competency in the physician workforce is maintained. Even with the advent of physician-owned hospitals, integrated hospital systems associated with insurers, or hospitals with fully employed physician models, the framework of the professional medical staff is often used to organize the routine review and monitoring of competency and professionalism. A firm understanding of these basic governance structures is necessary background for all hospital administrators.

Excerpted from Healthcare Administration, Leadership, and Management (HALM) — The Essentials , American Association for Physician Leadership, 2025).

REFERENCES

1. American Medical Association. Chapter 9: Professional Self-Regulation. AMA Code of Medical Ethics. American Medical Association. Accessed November 1, 2024. https://code-medical-ethics.ama-assn.org/chapters/professional-self-regulation .

2. Credentialing Resource Center. What Should Be Covered by Medical Staff Bylaws? Credentialing Resource Center Digest. January 29, 2024. Accessed November 1, 2024. https://credentialingresourcecenter.com/articles/what-should-be-covered-medical-staff-bylaws .

3. Federal Register. Title 42, Chapter IV, Subchapter 6, Part 482.12 Conditions of Participation: Governing Body. Accessed November 1, 2024. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-G/part-482 .

4. The Joint Commission. Focused Professional Practice Evaluation (FPPE)—Understanding the Requirements. What Are the Key Elements Organizations Need To Understand Regarding the Focused Professional Practice Evaluation Requirements? The Joint Commission. Accessed November 1, 2024. https://www.jointcommission.org/standards/standard-faqs/critical-access-hospital/medical-staff-ms/000001485/ .

5. Makary MA, Wick E, Freischlag JA. PPE, OPPE, and FPPE: Complying with the New Alphabet Soup of Credentialing. Arch Surg. 2011;146(6):642–644.

6. Reporting Patient Safety Events. PSNet. Rockville, MD: Agency for Healthcare Research and Quality, 2019. Accessed November 1, 2024. https://psnet.ahrq.gov/primer/reporting-patient-safety-events#:~:text=Institution%20must%20have%20a%20supportive%20environment%20for%20event,place%20for%20reviewing%20reports%20and%20developing%20action%20plans .

7. Macrae C. The Problem with Incident Reporting. BMJ Quality & Safety 2016;25:71–75.

8. National Practitioner Data Bank. What You Must Report to the NPDB. US Department of Health & Human Services. Accessed November 1, 2024. https://www.npdb.hrsa.gov/hcorg/whatYouMustReportToTheDataBank.jsp#:~:text=The%20NPDB%20collects%20information%20and%20maintains%20reports%20on,by%20private%20accreditation%20organizations%20and%20peer%20review%20organizations .

9. Protect Peer Review Privileges, or Risk Serious Consequences. Healthcare Risk Management. February 1, 2022. Accessed November 1, 2024. https://www.reliasmedia.com/articles/149011-protect-peer-review-privileges-or-risk-serious-consequences#:~:text=To%20protect%20patient%20safety .

10. Olszyk MD. The Chief Medical Officer’s Essential Guidebook. Washington, DC: American Association for Physician Leadership; 2023. https://shop.physicianleaders.org/products/the-chief-medical-officers-essential-guidebook-olszyk

11. Hoffman R. I Want to be a Chief Medical Officer, Now What? Washington, DC: American Association for Physician Leadership; 2024. https://shop.physicianleaders.org/products/i-want-to-be-a-chief-medical-officer-now-what-hoffman