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Ultimately, DMV or a court are the only ones who can suspend or revoke a license. Police or medical personnel can report that a person is unsafe to drive to DMV and then it is sent to DMV to make the determination.
If a person believes that they are medically safe to drive, then they are entitled to file an appeal to DMV and get a hearing and at that hearing they have to present a doctor to testify as to whether or not they are medically safe to drive. If the hearing office finds that the doctor has satisfactorily testified that the person is safe to drive, they will reinstate the license and the person will generally have to take the driver's license test all over again or at least the road test.