SB623 - Automobile accidents: civil actions: transportation network companies.

Senate Bill No. 623 CHAPTER 17 An act to add Section 3333.9 to the Civil Code, and to amend Section 5445.2 of, and to add Section 5451 to, the Public Utilities Code, relating to transportation. [ Approved by Governor June 25, 2026. Filed with Secretary of State June 25, 2026. ] LEGISLATIVE COUNSEL'S DIGEST SB 623, Umberg. Automobile accidents: civil actions: transportation network companies. (1) Existing law provides that in an action for the breach of an obligation not arising from contract, the measure of damages, except as provided, is the amount that will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not. This bill, with respect to a civil case, claim, action, or arbitration against a network company, its subsidiary, or an app-based driver, as defined, arising from an automobile accident, would, except as specified, prohibit the maximum recovery of a plaintiff for damages for any medical expense for services rendered by a lien-based provider, as defined, from exceeding the 70th percentile of FAIR Health, Inc.’s billed charges, or the 70th percentile of a comparable commercially recognized billed charges database for the same or similar service in the applicable geographic area at the time the service was rendered. The bill would prohibit certain evidence from being introduced that exceeds the recoverable amount. This bill would provide that if a medical lien, as defined, receivable, or right to payment has been sold or otherwise transferred, the maximum recoverable medical expense damages shall not exceed the total consideration paid or payable in connection with the transaction to acquire the lien, receivable, or right to payment, as provided. The bill would require any agreement relating to the sale or transfer of a medical lien, receivable, or right to payment, and the consideration paid or payable therefor, to be discoverable, and would prohibit an undisclosed lien sale or transfer from being asserted against a defendant, insurer, settlement, judgment, or settlement proceeds. The bill would also require certain medical lien financial relationships and attorney referral information to be discoverable. This bill would make it unlawful for an attorney representing a plaintiff under a contingency fee agreement in a civil claim, action, or arbitration, as described above, to refer a client to a health care provider in which the attorney or a member of the attorney’s immediate family has a direct ownership interest. The bill would also make it unlawful for an attorney to fee split or receive other specified compensation in connection with the furnishing of lien-based provider medical treatment for a plaintiff and would make it unlawful for an attorney or law firm to provide specified compensation for referrals of clients to lien-based providers for lien-based treatment. The bill would also make other actions related to the reduction of a medical lien unlawful, as specified. This bill would provide that these provisions are severable. (2) The Passenger Charter-party Carriers’ Act defines a transportation network company as an organization, whether a corporation, partnership, sole proprietor, or other form, operating in California that provides prearranged transportation services for compensation using an online-enabled platform to connect passengers with drivers using a personal vehicle. Existing law requires a transportation network company to conduct, or have a third party conduct, a local and national criminal background check for each participating driver, as specified, and prohibits a transportation network company from contracting with, employing, or retaining a driver if the driver, among other things, is currently registered on the United States Department of Justice National Sex Offender Public website, has been convicted of any of certain terrorism-related or human trafficking felonies or a violent felony or, within the previous 7 years, has been convicted of any misdemeanor assault or battery, any domestic violence offense, driving under the influence of alcohol or drugs, or any of a specified list of felonies. A violation of the act is a misdemeanor punishable by a fine, imprisonment, or both a fine and imprisonment. This bill would additionally prohibit a transportation network company from contracting with, employing, or retaining a driver if the driver has been convicted of specified offenses or, within the previous 7 years, has been convicted of other specified offenses, including driving under the influence of an alcoholic beverage or drug. The bill would require the background check to be performed prior to the activation of a driver’s account and once annually thereafter, as provided. By expanding the scope of a crime, the bill would impose a state-mandated local program. (3) Existing law, the Unruh Civil Rights Act, provides that all persons within the jurisdiction of this state are entitled to full and equal accommodations in all business establishments of every kind whatsoever, regardless of their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status. This bill would provide that notwithstanding that act, a transportation network company or charter-party carrier of passengers, as defined, may allow a woman passenger on its online-enabled application or platform or a participating woman driver to indicate a preference to be matched with a woman driver or woman passenger, respectively, and facilitate passenger-driver matches based on such preferences. The bill would make these provisions apply retroactively, as provided. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 3333.9 is added to the Civil Code, to read: 3333.9. (a) (1) This section applies to any civil case, claim, action, or arbitration against a network company, its subsidiary, or an app-based driver, as those terms are defined in Section 7463 of the Business and Professions Code, arising out of an automobile accident occurring on or after January 1, 2027, in which a claimant obtained medical treatment by a lien-based provider. (2) This section shall not apply to medical services rendered, liens created, receivables assigned, or contractual rights or obligations arising before January 1, 2027. (3) This section shall apply notwithstanding any other provision of law. (4) Nothing in this section applies to or alters existing law except as to recovery for damages for past medical expenses from lien-based providers, and as otherwise provided by this section. (5) Nothing in this section abrogates the collateral source rule. (b) (1) (A) The maximum recovery of a plaintiff for damages for any medical expense for services rendered by a lien-based provider shall not exceed the 70th percentile of FAIR Health, Inc.’s billed charges, or the 70th percentile of a comparable commercially recognized billed charges database for the same or similar service in the applicable geographic area at the time the service was rendered. No plaintiff may recover past medical expense damages in excess of that amount. (B) Nothing in this section shall be construed to establish entitlement to any particular amount for any medical service, or to preclude a defendant from challenging the amount recoverable for any medical expense. (C) Upon motion of the plaintiff, the court may authorize recovery above the maximum recovery provided in subparagraph (A) only upon a finding, by clear and convincing evidence, and supported by expert testimony, that the service involved exceptionally rare or highly specialized treatment for which no reasonably comparable provider or service was available. Any request for recovery above the maximum recovery provided in subparagraph (A) shall be determined by the court before trial. If the court denies the motion, the party opposing the motion shall recover its reasonable attorney’s fees and costs incurred in connection with opposing the motion. Absent such a court order, the limitation provided in subparagraph (A) applies. (D) The amount billed, charged, or claimed by a lien-based provider for past medical expenses in excess of the maximum amount recoverable under this section is void and unenforceable, and no person or entity may recover, collect, enforce, assert, seek payment of, or seek reimbursement, indemnity, contribution, or subrogation for that excess amount. (2) No party may introduce, reference, disclose, or present to the trier of fact any billed charge, lien amount, invoice, statement, or claimed value for past medical expenses exceeding the recoverable amount pursuant to this section. Nor shall any party introduce evidence or argument or reference to this section, including, but not limited to, reference to the maximum amount. Such evidence shall be inadmissible for any purpose. (3) Nothing in this section precludes the admission of medical bills below the maximum amount. (4) A plaintiff shall not recover as damages for medical expenses an amount greater than the amount actually billed by the lien-based provider for that service. (5) (A) Damages for medical expenses under this section are recoverable only if supported by itemized medical bills identifying the services provided at the procedure-code level using generally accepted health care billing and coding standards, including applicable Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), International Classification of Diseases (ICD), or successor coding systems. (B) A party challenging compliance with this paragraph shall provide written notice to the plaintiff’s attorney identifying the alleged deficiency with reasonable specificity, and the provider or party offering the bill shall have 30 days to cure, supplement, or clarify the billing records. (c) (1) Where a medical lien, receivable, or right to payment has been sold, assigned, financed, factored, or otherwise transferred, the maximum recoverable medical expense damages, the maximum amount recoverable by the assignee, and the maximum amount for which the plaintiff may be liable shall not exceed the total consideration paid or payable in connection with the transaction to acquire the lien, receivable, or right to payment, and in no event shall exceed the maximum amount recoverable under paragraph (1) of subdivision (b). (2) Any agreement relating to the sale, assignment, financing, factoring, or transfer of a medical lien, receivable, or right to payment, and the consideration paid or payable therefor, including any contingent, deferred, recourse-based, or future payments, shall be discoverable and shall be disclosed to the plaintiff, the plaintiff’s attorney, the defendant, the defendant’s attorney, and any applicable insurer within 30 days after the transaction and, in all events, before any settlement or distribution of settlement proceeds. No undisclosed lien sale, assignment, financing, factoring arrangement, or transfer may be asserted against a defendant, insurer, settlement, judgment, or settlement proceeds. (3) Subject to subparagraph (B) of paragraph (5) of subdivision (b), nothing in this section shall preclude any party from challenging the reasonableness of any charge, the medical necessity of any treatment, or the accuracy of any billing, coding, or causation. (4) Any agreement, arrangement, or transaction by which a lien-based provider transfers the economic risk of noncollection of a medical lien to a third party in exchange for immediate or deferred compensation, regardless of whether the transaction is denominated as a sale, assignment, loan, factoring arrangement, management agreement, servicing agreement, or otherwise, shall be treated as a lien assignment subject to this section. (d) (1) Medical liens relating to the lien-based provider treatment at issue, including any assignment, financing, factoring, referral, ownership, investment, lending, or compensation between a lien-based provider and an attorney, law firm, or affiliated entity relating to the treatment, lien, or recovery shall be discoverable. (2) Upon request, a lien-based provider shall provide a declaration under penalty of perjury stating whether the plaintiff was referred by the attorney, law firm, or any person acting on their behalf and the approximate number of patients referred by that attorney or law firm to the provider during the preceding 24 months. The declaration shall be discoverable. (e) (1) It is unlawful for an attorney representing a plaintiff under a contingency fee agreement to refer a client to a health care provider in which the attorney or a member of the attorney’s immediate family has a direct ownership interest. (2) It is unlawful for an attorney representing a plaintiff to fee split, receive kickbacks, rebates, or referral compensation in connection with the furnishing of lien-based provider medical treatment for that plaintiff. (3) It is unlawful for an attorney or law firm to provide bonuses, incentives, or compensation for referrals of clients to lien-based providers for lien-based treatment. (4) An attorney shall not charge any additional contingency fee, administrative fee, management fee, or similar fee based upon the reduction, compromise, or resolution of a medical lien. Nothing here shall prevent an attorney from retaining a third party to negotiate any lien reductions at a cost with client consent. (5) A lien-based provider shall not enter into any agreement or understanding to reduce a medical lien before medical services are rendered. A violation of this paragraph may subject the provider to professional discipline. (6) A violation of this subdivision may subject the attorney to professional discipline by the State Bar. (f) The following definitions apply for purposes of this section: (1) “Automobile accident” means any accident, collision, incident, or occurrence arising out of, resulting from, or involving the ownership, operation, maintenance, use, loading, unloading, parking, or storage of a motor vehicle. (2) “Lien-based provider” means any health care provider or other person or entity that renders, furnishes, bills for, finances, or seeks payment for health care-related goods or services provided pursuant to an agreement under which payment is contingent upon, secured by, or expected from, the proceeds of the patient’s legal claim. The term includes any facility, hospital, ambulatory surgery center, imaging center, supplier, affili [Text truncated for display. Full text available on Congress.gov.]