Cigna Unlawfully Using Algorithm To Reject Medical Insurance Claims Featured
Cigna Healthcare is facing a federal class action lawsuit alleging the company used artificial intelligence algorithms to “deny payments in batches of hundreds or thousands at a time,” as part of an almost completely automated claims decision process.
What Happened?
A federal lawsuit was recently filed alleging that health insurance giant Cigna uses an artificial intelligence based computer algorithm to automatically reject hundreds of thousands of patient claims without examining them individually as required by California law.
According to the lawsuit, Cigna Corp. and Cigna Health and Life Insurance Co. rejected more than 300,000 payment claims in just two months last year.
The company used an artificial intelligence based algorithm called PxDx, shorthand for ‘’procedure-to-diagnosis,” to identify whether claims met certain requirements, spending an average of just 1.2 seconds on each review. Huge batches of claims were then sent on to doctors who signed off on the denials en masse.
According to the lawsuit, “relying on the PxDx system, Cigna’s doctors instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills.”
Ultimately, Cigna conducted an “illegal scheme to systematically, wrongfully and automatically” deny members claims to avoid paying for medical necessary procedures, the lawsuit contends.
The lawsuit states that Cigna “utilizes the PxDx system because it knows it will not be held accountable for wrongful denials” because only a small fraction of policyholders appeal denied claims.
Why Is This Important?
At stake is the issue of whether an algorithm can provide the individual case review required by California health insurance law, or whether only human review meets the standard set out in state law.
California law requires medical professionals to conduct “thorough, fair, and objective” reviews of insurance claims.
The suit argues that Cigna “wrongfully delegate their obligation to evaluate and investigate claims to the PxDx system” and Cigna “fraudulently misled” its California customers “into believing their health plan would individually assess their claims.”
This is a cautionary tale as artificial Intelligence purports to improve people’s lives, yet Cigna uses it to summarily reject thousands of valid claims in the name of efficiency,
Of the claim denials that were appealed by Cigna customers, around 80 percent of the initial decisions were overturned.
House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) wrote to Cigna in May suggesting the high rate of successful appeals against PxDx decisions indicates “policyholders paying out-of-pocket for medical care that should be covered under their health insurance contract.”
Class Action Seeks To Ensure Policyholder Claims Fairly Reviewed
The class action lawsuit is open to all persons who purchased health insurance from Cigna in the State of California on or after July 24, 2019 who have incurred medical expenses as a result of Cigna rejecting their claim.