According to a federal lawsuit filed in Sacramento, California, health insurance provider Cigna has been accused of violating California law by using a computer algorithm to automatically reject hundreds of thousands of patient claims without proper individual examination. The lawsuit claims that Cigna’s use of this algorithm has resulted in the wrongful denial of coverage for many patients.
A class-action lawsuit was filed on Monday in federal court in Sacramento, alleging that Cigna Corp. and Cigna Health and Life Insurance Co. automatically denied over 300,000 payment claims in a span of just two months in 2022. The lawsuit implies that this action by Cigna was in violation of California law, as the claims were not examined on an individual basis, leading to the wrongful denial of coverage for many patients.
PXDX
As per the lawsuit, Cigna used a computer algorithm called PXDX, which stands for “procedure-to-diagnosis,” to evaluate whether claims met specific criteria. The company spent an average of only 1.2 seconds per review using this algorithm, failing to examine each claim individually as required by California law. Following this, large sets of claims were sent to doctors who allegedly approved the denials without proper scrutiny.
The lawsuit states that Cigna’s doctors use the PXDX system to reject claims based on medical grounds without even reviewing the patient files. This system has led to the denial of coverage for thousands of patients, leaving them with unexpected bills and no access to necessary medical treatment.
The lawsuit alleges that Cigna engaged in an illegal scheme to automatically deny claims, without proper individual review, in an effort to avoid paying for necessary medical procedures. This systematic denial of claims has allegedly caused significant harm to many patients who have been wrongfully denied coverage for their medical treatments.
Cigna, a Connecticut-based health insurance provider, has more than 18 million members across the United States, with over 2 million members residing in California. The lawsuit was initiated on behalf of two Cigna policyholders in Placer and San Diego counties who had their claims for medical tests denied and were subsequently left with no other choice but to pay for these tests out of their own pockets. The lawsuit seeks to hold Cigna accountable for allegedly violating California law by automatically denying claims without proper individual review, leading to the wrongful denial of coverage for many patients.
The lawsuit alleges that Cigna violated California law, which mandates that the company conduct “thorough, fair, and objective” investigations of medical expense bills submitted by patients. The lawsuit seeks unspecified damages and a trial by jury to hold Cigna accountable for its alleged failure to properly review and process medical claims, leading to the wrongful denial of coverage for many patients.
The lawsuit claims that Cigna uses the PXDX system because it believes that it won’t face accountability for wrongfully denying claims, given that only a small percentage of policyholders typically appeal denied claims. The company allegedly takes advantage of this low appeal rate by automatically denying claims without proper review, leading to the denial of coverage for many patients who are unable to appeal or are wrongfully denied upon appeal.
Cigna Statements
Cigna Healthcare released a statement in response to the lawsuit, stating that it finds the allegations to be highly questionable and based on a poorly reported article that misrepresents the facts.
According to Cigna Healthcare, the PXDX system is used to facilitate prompt payments to physicians for common, relatively inexpensive procedures through an industry-standard review process that is similar to those used by other insurers for many years. The company claims that their process aims to streamline the review process, and that they comply with all relevant laws and regulations.
Cigna Healthcare’s statement further noted that the company utilizes technology to ensure that the codes on some of the most common, low-cost procedures are accurately submitted based on their publicly available coverage policies. This is done to facilitate prompt reimbursement to physicians and to avoid any unnecessary delays.
According to Cigna Healthcare’s statement, the review process takes place after patients have received treatment, which means that the process does not lead to any denials of care. In cases where codes are submitted incorrectly, Cigna Healthcare claims to provide clear instructions on how to resubmit and appeal the claim.
