In the first two articles of this series, we examined why SB 623 matters and how it became law.

Now comes the question every healthcare provider should be asking: What exactly does this law do?

If you’ve only read headlines, you’ve probably heard phrases like “medical lien reform,” “rideshare safety,” or “transparency.”

Those descriptions are accurate, but they barely scratch the surface.

SB 623 is much more than a transparency and rideshare safety bill.

It changes how medical charges are capped yet can be reduced further, whether liens or medical and surgical procedures will now be financed, the extent law firms are referring clients to a particular provider or physician, what information becomes discoverable, and what new responsibilities providers themselves have now assumed.

Whether you support or oppose these changes, every provider treating personal injury patients should understand them before they begin affecting daily practice.

Let’s walk through the most significant provisions in more of a general overview and questions you should be asking, with a deeper dive on specific areas as this series moves forward.

Because I will be citing the exact language from the bill, this particular article will be much longer than the others. Regardless, I want you all to “see” the wording so, again, you can decide if my interpretation in this article and the rest of the series is correct, or if you disagree with my analysis.

I welcome the debate.

And please refer back to this article as we move through the series as I won’t be repeating the actual legislative language generally. You will want to keep this one handy as a reference.

1. The Law Applies to Covered Transportation Network Company Cases

The first thing to understand is what patients the statute covers.

SB 623 is not currently a statewide rewrite of all California personal injury law.

Instead, it applies to civil app-based rideshare personal injury lien cases occurring on or after January 1, 2027.

Here’s the specific wording:

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.

Based upon the wording, existing treatment relationships before that date appear unaffected under the current statutory language.

It’s also significant that the bill chose to add after the effective date of January 1, 2027 the wording: “in which a claimant obtained medical treatment by a lien-based provider.” Whether that further limits the application of this law to only “lien” situations will be one question.

The start date of car crash medical lien cases that take place on or after January 1, 2027, matters. You have time to get your processes compliant, and any 2026 or early patient cases are unaffected.

But providers should also recognize that significant legal reforms often begin in a narrower context before broader adoption is debated. Whether that happens here remains to be seen.

Think about it. If you are a Judge and you have two different PI cases before you, one a rideshare case and one a non-rideshare case, are you going to apply different standards?

In my experience, some Judges will apply the rideshare limitations across the board and assert “If you don’t like my decision, you have the right to appeal.”

Right now, SB 623 only applies to rideshare personal injury lien car crash cases. Will you know if the personal injury case was a rideshare-involved claim when the patient walks in your door? Will your office staff correctly apply requirements for rideshare cases and something different for non-rideshare car crash patient matters?

Like in all things, practical effects follow legal effects.

2. FAIR Health Becomes the Benchmark

One of the most discussed provisions establishes the 70th percentile of FAIR Health billed charges (or a comparable recognized database) as the benchmark for recoverable medical expense damages in covered cases.

Here’s the specific language from the bill in this area:

(a)(1)(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.

There is a later part of the bill that expands upon this trial evidentiary limitation:

(b)(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.

The first sentence is noteworthy. The Uber ballot initiative sought to alter the collateral source rule to limit medical expenses submissions to the actual cost of medical payments to be required or for a percentage of Medicare rates to be used. The Legal Lobby didn’t want that.

What did the Legal Lobby do? Negotiated with Uber to keep the collateral source rule as it currently exists, a win for them. Yet, affect medical charges, as a win for Uber.

So, at this point, the law is seeking to impose a trial limitation that is a ceiling, or cap, at the 70^th percentile of FAIR Health, or per (b)(2)(4), the actual amount paid, whichever is less.

Again, these are trial evidentiary limitations.

Let’s get back to the FAIR Health ceiling.

That’s the 70^th percentile which FAIR Health lists, not 70% of billed charges. On FAIR Health, various percentiles are listed which can range from the 50^th percentile to the 90^th percentile.

The bill does allow non-FAIR Health billing databases to be used, but if what is needed to be accessed to ascertain the standard for each code billed, what else but FAIR Health will be used?

And yes, the bill expressly provides a right to contest and apply for a higher value. Here’s what SB 623 states:

(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 attorneys’ fees and costs incurred in connection with opposing the motion. Absent such a court order, the limitation provided in subparagraph (A) applies.

Well… kind of. It’s a higher standard with “clear and convincing”, you must spend on experts, it needs to be “exceptionally rare or highly specialized treatment” and who knows what falls within that framework, and no other “reasonably comparable provider or service” could have been an option. What’s the chance of meeting that standard? Sometimes, yes. But it will be rare.

There’s a larger practical effect. If you lose, the other side gets their attorney’s fees for opposing the motion. So why would a patient’s attorney bring such a motion now?

But then again, if this is only an evidentiary limitation for purposes of trial, that’s the attorney’s issue to address and doesn’t have a direct effect on medical providers and physicians. Right?

Wrong. Unfortunately, SB 623 didn’t stop there.

3. Consequential Language Limiting Medical Bill Charges

(5)(b) of SB 623 sets the 70^th percentile limit. By itself, saying “No plaintiff may recover past medical expense damages in excess of that amount” would be a trial evidentiary limit. By itself, that would then have no impact on medical providers.

It’s later language of the bill that transforms the bill from one seeking to limit medical expense evidence to lessen the risk of nuclear and thermonuclear verdicts, to a bill that directly impacts medical billing itself. Here’s the later wording:

(b)(1)(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.

“Void and unenforceable.” Meaning that’s all you can get, and you can’t bill more.

This should become one of the most closely watched impacts in the statute. And this raises several practical questions:

Why the 70th percentile?

Why FAIR Health as the primary new legal measuring standard?

How accurate is the FAIR Health database?

Is it even proper to have a national dataset that has no oversight and was originated by an insurer to now be placed in charge of pricing controls?

Is FAIR Health even okay with its database even being used?

Might FAIR Health have liability exposures by this use?

If billing more than allowed, am I exposed to medical billing fraud claims?

If I bill and seek to collect more by mistake, have I violated the federal and state Fair Debt Collection Practices Act?

How and to what extent will my business and malpractice insurance cover missteps in this area?

For some providers, the FAIR Health benchmark may align reasonably well with current charges.

For others, particularly those providing specialized or high-risk services, it may not.

The larger issue is not simply today’s number. It is that an unsupervised, unregulated external benchmark now plays a central role in determining recoverable billed healthcare charges.

It’s also the liability exposure that comes with violating statutes and rules.

Of note, the FAIR Health 70^th percentile for each billed code is a cap, or ceiling, given the limitations on seeking a higher amount. So, for compliance and practical purposes, it’s now the most a healthcare provider or physician should charge for a rideshare patient, presumably.

That doesn’t mean that you will be paid at the 70^th percentile or that the 70^th percentile will be admitted into evidence at trial.

So while there is a charge ceiling, there is no floor.

There is a significant difference between limiting what may be presented as damages in court, compared to affecting the enforceability of a provider’s bill outside of the personal injury case.

Providers should understand why this provision should generate a lot more discussion.

It reaches beyond trial evidence which was one of the centerpieces of the Uber ballot initiative, and raises questions about financial risk, billing practices, and willingness to continue treating certain lien-based patients.

We’ll devote an entire article to this issue later in the series because of its importance.

4. The Right To Pay Less Than The 70^Th Percentile of a Bill or Charge

As noted above, the statute also limits what medical billing evidence may be presented to the trier of fact when charges exceed the statutory benchmark.

This reflects a broader trend in several jurisdictions seeking to standardize or limit recoverable medical expense evidence to those actually incurred.

Supporters argue this creates greater consistency.

Critics will question whether standardized benchmarks adequately reflect the realities of specialized personal injury care and limit just compensation for injured consumers.

At the same time, the right to challenge any bill, even at trial, whether in compliance with the 70^th percentile or even actual charges, was affirmed as a right for anyone to bring. As SB 623 states:

(c)(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.

The defense and really anyone retains the right to say a provider’s bill should be less or even improper altogether.

5. Greater Billing Detail and Documentation is Required

SB 623 requires itemized medical bills using recognized coding systems such as CPT, HCPCS, ICD, or successor coding methodologies. Here’s the specific language in SB 623:

(b)(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.

This does not represent a major operational change because those coding systems are already widely used and are the center of standardized medical billing.

For others, particularly where services extend beyond conventional coding frameworks or involve complex treatment protocols or a protocol not falling squarely within one of these coding systems, careful compliance review will now be appropriate.

What happens if a questionable code or a billed service doesn’t fall into a generally accepted coding standard? SB 623 provides their answer here:

(b)(5)(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.

So the patient’s attorney can still challenge the limitation, but the provider now has to provide additional information within 30 days, and likely uncompensated for that extra time, cost and resources used to comply.

Documentation and coding has always mattered. It matters even more now.

6. Medical Lien Financing Changes Significantly

The legislation also addresses medical lien sales, assignments, financing, factoring, and other transfers.

The focus is on transparency so the defense in a personal injury case can apprise a Judge or jury what is happening in the world of medical financing and medical procedure funding for the purposes of, again, stopping or limiting nuclear and thermonuclear jury verdicts.

That’s fine. The problem is when legislation goes further. SB 623 states:

(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.

(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.

Few will argue with the need for transparency in the area of medical financing and medical procedure funding as outlined in (c)(2) and (d)(1). Or that these provisions are being broadly applied to try to fend off those who will try to be creative to get around this law as addressed in (c)(4).

One issue is the reporting requirement within 30 days of that financing act or before settlement and distribution as required by (c)(2) is “who” that burden falls upon.

You would view that as applying to the funding or financing entity. Maybe the law firm where the plaintiff law firm is involved.

However, it can also be read to put that burden on the medical professional. That’s then an additional burden upon healthcare providers and physicians.

Yet there’s another part of the above more concerning.

SB 623 (c)(1) is saying whoever finances a medical lien or receivable or surgical procedure can no longer get in repayment more than the amount they paid. Meaning, making a profit is prohibited.

If an entity can’t make a profit, why would they fund or finance? That makes no sense.

Why does this matter in an even broader sense?

Because financing often provides liquidity for the medical provider, physician or surgical facility who may have to wait years to be paid to manage cash flow, as their overhead, operations and staff can’t wait to be paid.

Because patients may desperately need the procedure but the physician, medical facility and healthcare providers they trust either do not take lien patients or won’t risk not being paid on such a large bill. So only because of this type of medical funding will the patient get access to the care they need.

Supporters argue these provisions reduce speculative investment.

Rideshare companies want lower medical costs so that plaintiff attorneys have less to present to juries and lessen the chance for higher jury verdicts against them.

That practical effect deserves a close review of its impact on patient access to needed care.

7. More Financial Relationships Become Discoverable

SB 623 expands discoverability regarding certain lien arrangements and financial relationships involving providers and attorneys.

Transparency is increasingly becoming part of personal injury litigation nationwide.

Here, if a provider’s office is partnered directly with an attorney, or is a family member of an attorney, that referral is now prohibited. SB 623 states:

(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.

Does that law also apply to the attorney’s staff who has a family member that is a referred-to healthcare provider? The attorney’s accountant or business associate? The spirit and intent would infer yes, but given it’s not in the specific wording that remains an open question.

Supporters view greater disclosure as promoting fairness.

Providers should recognize that financial arrangements previously receiving less scrutiny will now become routine discovery subjects.

That means the magnifying glass on healthcare practices and how they do business is being enlarged. And few want to be under an enlarged magnifying glass.

8. New Provider Declaration Requirements

Among the most discussed and objectionable provisions should be the requirement that providers, upon request, must now furnish declarations “under penalty of perjury” concerning attorney referral information.

Here’s what SB 623 states:

(d)(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.

This mandates the provider attest as to the approximate volume of that law firm’s referrals, directly or indirectly, over the prior 24 months.

This provision raises practical questions.

How should practices accurately track referral sources?

Can the identity of the patients with the law firm be forced for turnover so the requesting party can confirm the information and does that violate privacy laws?

What systems should offices implement to comply and how address the increased time and cost?

How should providers document referrals when patients arrive through multiple channels or third parties?

Does this apply only to referrals from the law office to the medical office, or also to the reverse—where the healthcare provider or physician refers a patient to the law firm?

The statute doesn’t require exactness, but what latitude does “approximate” allow?

Those are legal and operational questions every practice should begin considering now, and ones healthcare attorneys who advise medical offices will be wrestling with to advise them.

Supporters view the volume of patient referrals by law firms as a weapon for the defense, going to attorney-directed medical care, medical bias, and other credibility attacks to challenge the propriety of the medical care and scope of care a patient receives.

Critics should be looking at why this declaration burden and legal exposure of “penalty of perjury” is being placed upon the healthcare office and not the referring law firm, and whether it risks invading consumer privacy rights.

We’ll examine this issue in detail later in the series.

9. Attorney and Healthcare Provider Conduct Receives Additional Attention

Finally, SB 623 addresses certain attorney conduct involving referral compensation, fee splitting, kickbacks, and related financial arrangements.

In this area, SB 623 states:

(e)(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.

That impacts the law firm. It also protects their clients as some firms actually add an extra layer of fees to get even more money out of a settlement for resolving medical liens, with some of that work being outsourced to third party companies. Now that can’t be separately charged.

And law firms violating SB 623 do have larger repercussions as it also states:

(e)(6) A violation of this subdivision may subject the attorney to professional discipline by the State Bar.

This law then expanded State Bar ethics rules in California to include the provisions of SB 623 that apply to attorneys.

There is also a provision targeting medical providers who are often called by law firms with an opening line, something like: “We will send you our clients if you promise to reduce all your medical bills when it comes time to pay by 50%, but we want you to still send us your full billed amounts.”

SB 623 addresses that also from the provider and physician standpoint with licensing exposure:

(e)(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.

Some of these prohibitions reinforce concepts already addressed elsewhere in professional responsibility rules and existing law. Yet, it’s being spun as “new law.”

Others reflect the Legislature’s continuing emphasis on transparency and conflicts of interest.

Regardless of perspective, the message is clear: The relationships among attorneys, physicians and providers, patients, and financial entities will likely receive greater scrutiny going forward.

Looking at the Entire Picture

Each of these nine changes matters individually. Taken together, however, they represent something larger.

They reshape personal injury treatment in rideshare crash cases, and in my belief, all personal injury cases when SB 623 is expanded as I expect it to be, to apply to all PI cases, from slip and fall, to dog bite, to product defect, and the rest.

Some providers may determine these changes primarily require operational adjustments.

Others may conclude the financial and administrative burdens substantially alter the risk associated with lien-based treatment and limit or stop altogether treating personal injury patients, which also impacts patient access to care they need and medical provider and physician insurability areas.

Time and judicial interpretation will ultimately answer many of these questions in California and those determinations may well have a nationwide impact.

But one conclusion is already clear: Healthcare providers and physicians who understand these changes today will be better prepared than those who wait until the first affected case arrives in their office.

Knowledge is no longer optional. It is becoming part of practice management.

And no one else is laying out the actual facts to you.

I expect all you have received is political spin by Uber, the Legal Lobby and the Governor’s Office, all to make them look good and to hide the impact and repercussions of SB 623 as new law.

I’m setting the record straight so that you get full knowledge and full disclosure, and can make up your own minds.

Next in the Series

Part 4: Three Words That Could Change Personal Injury Medicine

We’ll examine the phrase “void and unenforceable” and why many providers view it as the most consequential language in SB 623, how it differs from ordinary evidentiary limitations that have been part of tort reform in a number of other states, and the practical questions it raises for physicians, surgeons, imaging centers, ambulatory surgery centers, chiropractors, physical therapists, and every provider considering whether to continue treating lien-based personal injury patients.