(a) This section applies only to a district created in a county with a population of more than 1.2 million that was not included in the boundaries of a hospital district before September 1, 2003.
(b) In addition to the authority to employ physicians under § 281.0281 in the manner and for the purposes provided by that section, the board of the district may appoint, contract for, or employ physicians as the board considers necessary for the efficient operation of the district.

(c) The term of an employment contract entered into under this section may not exceed four years.
(d) This section may not be construed as authorizing the board to supervise or control the practice of medicine, as prohibited by Subtitle B, Title 3, Occupations Code.
(e) The authority granted to the board under Subsection (b) to employ physicians shall apply as necessary for the district to fulfill the district’s statutory mandate to provide medical care for the indigent and needy residents of the district as provided by § 281.046.
(f) The medical executive board of the district shall adopt, maintain, and enforce policies to ensure that a physician employed by the district under this section exercises the physician’s independent medical judgment in providing care to patients.
(g) The policies adopted by the medical executive board under this section must include:
(1) policies relating to:
(A) governance of the medical executive board;
(B) credentialing;
(C) quality assurance;
(D) utilization review;
(E) peer review;
(F) medical decision-making; and
(G) due process; and
(2) rules requiring the disclosure of financial conflicts of interest by a member of the medical executive board.
(h) The medical executive board and the board of the district shall jointly develop and implement a conflict management process to resolve any conflict between a policy adopted by the medical executive board under this section and a policy of the district.
(i) A member of the medical executive board who is a physician shall provide biennially to the chair of the medical executive board a signed, verified statement indicating that the board member:
(1) is licensed by the Texas Medical Board;
(2) will exercise independent medical judgment in all medical executive board matters, including matters relating to:
(A) credentialing;
(B) quality assurance;
(C) utilization review;
(D) peer review;
(E) medical decision-making; and
(F) due process;
(3) will exercise the board member’s best efforts to ensure compliance with the policies that are adopted or established by the medical executive board; and
(4) will report immediately to the Texas Medical Board any action or event that the board member reasonably and in good faith believes constitutes a compromise of the independent medical judgment of a physician in caring for a patient.
(j) For all matters relating to the practice of medicine, each physician employed by the district under this section shall ultimately report to the chair of the medical executive board for the district.