(a) For purposes of this section, “hospital-based services” means the following services when provided at a hospital:
(1) emergency medicine;
(2) general medicine practiced by a hospitalist; and
(3) radiology services.
(b) The board may employ physicians as the board considers necessary to provide hospital-based services at a hospital owned or operated by the district as provided by this section. The board may retain all or part of the professional income generated by a physician employed by the district for those hospital-based services if the board satisfies the requirements of this section.

(c) The term of an employment contract entered into under this section may not exceed five years.
(d) This section may not be construed as authorizing the board to:
(1) supervise or control the practice of medicine, as prohibited by Subtitle B, Title 3, Occupations Code; or
(2) employ physicians for any purpose other than the provision of hospital-based services at a hospital owned or operated by the district.
(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 and hospital care to the district’s residents, including the district’s needy and indigent residents, as provided by Sections 1053.101 and 1053.104.
(f) The medical executive committee of the district shall adopt, maintain, and enforce policies to ensure that a physician employed by the district exercises the physician’s independent medical judgment in providing care to patients.
(g) The policies adopted by the medical executive committee under this section must include:
(1) policies relating to:
(A) governance of the medical executive committee;
(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 committee.
(h) The medical executive committee and the board shall jointly develop and implement a conflict management process to resolve any conflict between a policy adopted by the medical executive committee under this section and a policy of the district.
(i) A member of the medical executive committee who is a physician shall provide biennially to the chair of the medical executive committee a signed, verified statement indicating that the committee member:
(1) is licensed by the Texas Medical Board;
(2) will exercise independent medical judgment in all medical executive committee 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 committee member’s best efforts to ensure compliance with the policies that are adopted or established by the medical executive committee; and
(4) will report immediately to the Texas Medical Board any action or event that the committee 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 shall ultimately report to the chair of the medical executive committee for the district.