California Medical Lien Law for Outpatient Providers (2026)

California's lien statute covers hospitals only. Chiropractors, physical therapists, pain management, orthopedic and neurology practices, imaging centers and surgery centers rely on a lien agreement signed by the patient, usually acknowledged by the patient's attorney. A new law, SB 623, caps lien-based medical damages in rideshare (Uber and Lyft) accident cases for accidents on or after January 1, 2027.

At a glance

Question	Answer
Statutory lien for outpatient providers	No. The Hospital Lien Act covers hospitals only.
Main law	Civ. Code §§ 3045.1 to 3045.6 (hospital liens); Civ. Code § 3333.9, added by SB 623 (rideshare cases)
What outpatient providers usually rely on	A lien agreement or letter of protection signed by the patient, usually acknowledged by the patient's attorney
Notice or filing	Hospitals: written notice by registered mail to the liable party and its insurer before money is paid. Contract liens: no statutory notice or filing. Rideshare cases: a sold or transferred lien must be disclosed within 30 days.
Limits on the amount	Hospital liens: payable only out of 50% of the recovery after prior liens. Contract liens: no general statutory cap. Rideshare cases (accidents on or after Jan. 1, 2027): capped at the 70th percentile of FAIR Health billed charges, or the price paid for a sold lien.
Health insurance and billing the patient	No general duty to bill health insurance was found. An insured patient may choose to treat outside the plan on a lien. A provider contracted with the patient's Knox-Keene plan may not collect from the enrollee sums the plan owes.
Billed vs. paid in the case	Insured plaintiffs recover no more than the amounts paid or still owed (Howell, 2011). A plaintiff who treats on a lien is treated as uninsured and proves reasonable value with expert testimony (Pebley, 2018).
Recent changes (2023–2026)	SB 623 (Ch. 17, Stats. 2026) added Civ. Code § 3333.9 for rideshare accident cases. It takes effect for accidents on or after Jan. 1, 2027.

Is there a lien law for outpatient providers?

No. Civ. Code § 3045.1 gives a lien to a hospital that provides "emergency and ongoing medical or other services" to a person injured through someone else's negligence or wrongful act. The lien attaches to the injured person's damages, up to the hospital's "reasonable and necessary charges." It does not apply to injuries covered by the workers' compensation provisions of the Labor Code.

The hospital lien applies whether the money comes from a judgment, a settlement or a compromise (§ 3045.2). The chapter does not apply to claims against a common carrier regulated by the Public Utilities Commission or the Interstate Commerce Commission (§ 3045.6).

We found no California statute that gives physicians, chiropractors, physical therapists, imaging centers or surgery centers a lien on a personal injury recovery. Civ. Code § 3040 deals with liens held by health plans, insurers, medical groups and IPAs that are recovering money they paid. It does not give treating providers a lien, and it says it does not create any lien that does not otherwise exist at law (§ 3040(h)).

How a lien is perfected

Hospital liens. Under § 3045.3, the hospital sends written notice to each person or company it knows of and alleges is liable, with a copy to any known insurer of that party. Notice goes by registered mail, return receipt requested, before any money is paid to the injured person, their attorney or their legal representative. The notice states the patient's name and address, the accident date, the hospital's name and location, the amount claimed, and the names of the alleged liable parties. The lien is not effective without this notice, and no county filing is required. A hospital can sue a party that paid after receiving notice, within one year after the payment (§ 3045.5).

Outpatient lien agreements. No statute sets notice or filing steps for a provider's lien agreement. Its strength comes from the signed agreement and the attorney's duties described below.

Rideshare cases. Under Civ. Code § 3333.9, if a lien is sold, assigned or transferred, the agreement and the price must be disclosed within 30 days after the transaction and before any settlement is distributed. Disclosure goes to the plaintiff, the plaintiff's attorney, the defendant, the defendant's attorney and any applicable insurer. A transfer that is not disclosed cannot be asserted against the defendant, the insurer or the settlement proceeds. (SB 623, Ch. 17, Stats. 2026)

Limits on what the provider is paid

Hospital liens. A payer who received notice is liable for the lien only "out of 50 percent" of the money due under a judgment, compromise or settlement, after any prior liens are paid (§ 3045.4). A hospital that accepted a health insurer's negotiated payment as payment in full cannot use the Hospital Lien Act to collect the difference from the patient's recovery, because the patient no longer owes that debt. Hospitals may preserve lien rights by contract. (Parnell v. Adventist Health System/West (2005) 35 Cal.4th 595)

Health plan and insurer liens. Liens under § 3040 belong to plans and insurers, not treating providers. They are capped at the amount actually paid to providers plus the cost of perfecting the lien, and further capped at one-third of the recovery when the patient has an attorney, or one-half without one. They are also reduced for the plaintiff's comparative fault and pro rata for attorney fees and costs.

Outpatient lien agreements. We found no general statutory cap. The amount depends on the agreement and on what the plaintiff can prove as damages.

Rideshare cases (accidents on or after January 1, 2027). Under § 3333.9, past medical damages for care from a "lien-based provider" cannot exceed the 70th percentile of FAIR Health billed charges (or a comparable recognized database) for the same service in the area, and cannot exceed the amount actually billed.

If the lien was sold or transferred, damages are capped at the price paid for it.
Any amount above the cap is "void and unenforceable."
Before trial, a plaintiff can ask the court to exceed the cap. This takes clear and convincing evidence and expert testimony that the care was exceptionally rare or highly specialized.
A "lien-based provider" is anyone billing under an arrangement where payment is contingent on, secured by or expected from the claim proceeds. Care paid through health insurance, government coverage or the Hospital Lien Act is excluded.

Lien agreements and letters of protection

We did not find a California statute that expressly validates or regulates provider lien agreements in general. The State Bar treats a lien or acknowledgment the client signed in favor of a provider as creating an interest in the recovery that the attorney must respect (Cal. State Bar Formal Opn. 1988-101).

In rideshare cases, § 3333.9 adds new rules for lien-based providers:

Medical liens, financing, factoring, referral, ownership and compensation arrangements are discoverable.
On request, the provider must give a declaration under penalty of perjury stating whether the plaintiff's attorney referred the patient, and roughly how many patients that attorney or firm referred in the preceding 24 months.
Every bill must be itemized at the procedure-code level (CPT, HCPCS, ICD). There is a 30-day period to fix a deficiency after written notice.
Providers may not agree to reduce a lien before services are rendered.

The attorney's duty to pay the provider

State Bar Formal Opinion 1988-101 addresses a client who signed an acknowledgment of a provider's interest in the recovery and later told the attorney not to pay. The ethics committee said paying the client may breach the attorney's duties to the provider. The "safest course" is interpleader. Alternatively, the attorney may hold the funds in trust if both sides agree.

In rideshare cases, § 3333.9(e) makes it unlawful for a contingency-fee attorney to refer a client to a provider the attorney or an immediate family member owns, or to take referral compensation. The attorney also may not charge an extra fee for reducing or resolving a medical lien. Violations can lead to State Bar discipline.

Health insurance, no-fault and billing the patient

We found no general rule requiring a provider to bill health insurance first. In Pebley v. Santa Clara Organics, LLC (2018) 22 Cal.App.5th 1266, the court held that a defendant cannot force an injured plaintiff to use health insurance, and that an insured plaintiff may choose to treat outside the plan on a lien.

Under Health & Safety Code § 1379, a provider contracted with a Knox-Keene health plan may not collect, or try to collect, from the enrollee any sums the plan owes. After accepting a plan's payment, a hospital cannot lien the difference (Parnell).

We could not confirm in a primary source whether a provider may collect its full lien amount from the patient after a lost case or a small recovery. In rideshare cases, any amount above the § 3333.9 cap is void.

Billed vs. paid medical damages

Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 held that a plaintiff whose care was paid by private insurance may recover no more than the amounts paid or still owing. The negotiated discount is not a collateral-source benefit.

Pebley addressed an insured plaintiff who chose to treat outside the plan. The court held "such a plaintiff shall be considered uninsured" for purposes of economic damages. The billed amount alone is not enough: reasonable value is proven through expert testimony, and the defense can rebut it.

In rideshare cases, § 3333.9 replaces this framework for past lien-based medical damages, and amounts above the cap cannot be shown to the jury. Care paid through health insurance falls outside the definition of lien-based care.

Recent changes

SB 623 (Ch. 17, Stats. 2026). Approved and filed June 25, 2026, SB 623 adds Civil Code § 3333.9 and amends Public Utilities Code provisions. Section 3333.9 applies only to claims against a transportation network company (such as Uber or Lyft), its subsidiary or an app-based driver, arising from an auto accident on or after January 1, 2027. It does not apply to services rendered, liens created or obligations arising before that date. (SB 623 bill text)

What this means for your practice

California's hospital lien law does not cover outpatient practices. Your claim on a recovery rests on a written lien agreement signed by the patient, ideally acknowledged by the patient's attorney.
Keep itemized, coded bills and support for the reasonable value of your charges. Under Pebley, the plaintiff proves reasonable value with expert testimony, and the defense can challenge it.
For rideshare accidents on or after January 1, 2027, the case can recover no more than the 70th percentile of FAIR Health billed charges for your past care, and the excess is void. Selling or factoring the lien caps it at the sale price, and the sale must be disclosed within 30 days.
In rideshare cases, expect discovery on referrals from the attorney over the past 24 months, and bills itemized by CPT, HCPCS and ICD code. You cannot agree to a lien reduction before treating.
If you contract with the patient's health plan, review your plan contract and Health & Safety Code § 1379 before treating on a lien.
Under State Bar Opinion 1988-101, when a client disputes a signed lien at settlement, the attorney's safest course is interpleader rather than paying the client.

Sources

How we verified: SB 623 and Civ. Code §§ 3045.1 and 3045.4 were checked on the official California Legislative Information site (leginfo.legislature.ca.gov). Other statute text was read from FindLaw's code pages, current as of January 1, 2026. Research current as of November 12, 2026.