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TITLE 14. LIEN
CHAPTER 3.5. HEALTH CARE LIENS
California Civil Code Section 3040




3040.  (a) No lien asserted by a licensee of the Department of
Managed Care or the Department of Insurance, and no lien of a medical
group or an independent practice association, to the extent that it
asserts or enforces a lien, for the recovery of money paid or payable
to or on behalf of an enrollee or insured for health care services
provided under a health care service plan contract or a disability
insurance policy, when the right of the licensee, medical group, or
independent practice association to assert that lien is granted in a
plan contract subject to the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety Code) or a disability insurance policy subject
to the Insurance Code, may exceed the sum of the reasonable costs
actually paid by the licensee, medical group, or independent practice
association to perfect the lien and one of the following:
   (1) For health care services not provided on a capitated basis,
the amount actually paid by the licensee, medical group, or
independent practice association pursuant to that contract or policy
to any treating medical provider.
   (2) For health care services provided on a capitated basis, the
amount equal to 80 percent of the usual and customary charge for the
same services by medical providers that provide health care services
on a noncapitated basis in the geographic region in which the
services were rendered.
   (b) If an enrollee or insured received health care services on a
capitated basis and on a noncapitated basis, and the licensee,
medical group, or independent practice association that provided the
health care services on the capitated basis paid for the health care
services the enrollee received on the noncapitated basis, then a lien
that is subject to subdivision (a) may not exceed the sum of the
reasonable costs actually paid to perfect the lien, and the amounts
determined pursuant to both paragraphs (1) and (2) of subdivision
(a).
   (c) If the enrollee or insured engaged an attorney, then the lien
subject to subdivision (a) may not exceed the lesser of the following
amounts:
   (1) The maximum amount determined pursuant to subdivision (a) or
(b), whichever is applicable.
   (2) One-third of the moneys due to the enrollee or insured under
any final judgment, compromise, or settlement agreement.
   (d) If the enrollee or insured did not engage an attorney, then
the lien subject to subdivision (a) may not exceed the lesser of the
following amounts:
   (1) The maximum amount determined pursuant to subdivision (a) or
(b), whichever is applicable.
   (2) One-half of the moneys due to the enrollee or insured under
any final judgment, compromise, or settlement agreement.
   (e) Where a final judgment includes a special finding by a judge,
jury, or arbitrator, that the enrollee or insured was partially at
fault, the lien subject to subdivision (a) or (b) shall be reduced by
the same comparative fault percentage by which the enrollee or
insured's recovery was reduced.
   (f) A lien subject to subdivision (a) or (b) is subject to pro
rata reduction, commensurate with the enrollee's or insured's
reasonable attorney's fees and costs, in accordance with the common
fund doctrine.
   (g) This section is not applicable to any of the following:
   (1) A lien made against a workers' compensation claim.
   (2) A lien for Medi-Cal benefits pursuant to Article 3.5
(commencing with Section 14124.70) of Chapter 7 of Part 3 of Division
9 of the Welfare and Institutions Code.
   (3) A lien for hospital services pursuant to Chapter 4 (commencing
with Section 3045.1).
   (h) This section does not create any lien right that does not
exist at law, and does not make a lien that arises out of an employee
benefit plan or fund enforceable if preempted by federal law.
   (i) The provisions of this section may not be admitted into
evidence nor given in any instruction in any civil action or
proceeding between an enrollee or insured and a third party.

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