Cigna accused of using an algorithm to reject patients' health insurance claims

Cigna is using an algorithm to review — and often reject — hundreds of thousands of patient health insurance claims, a new lawsuit claims, with doctors rubber-stamping those denials without individually reviewing each case. 

The class-action suit, filed in the U.S. District Court in Sacramento, alleges that Cigna's actions violate California state law, which requires that insurers conduct a "thorough, fair and objective" investigation into each patient claim. Instead, the lawsuit alleges, Cigna is relying on an algorithm, called PxDx, that saves the insurer money by denying claims. The system also reduces the company's labor costs by cutting the time needed by doctors to look at each claim, according to the complaint.

One California woman with Cigna health insurance, Suzanne Kisting-Leung, underwent an ultrasound ordered by her doctor because of concerns about ovarian cancer. The ultrasound found a cyst on her left ovary, the lawsuit states. Cigna denied her claim for the ultrasound and a follow-up procedure, claiming neither were medically necessary and leaving her on the hook for $723 in costs for the two ultrasounds, the claim alleges. 

Another Cigna customer in California had a vitamin D test to check for a deficiency, a procedure that was ordered by her doctor. Cigna denied her claim, but didn't provide an explanation about why the test was rejected, the suit claims. 

The litigation highlights the growing use of algorithms and artificial intelligence to handle tasks that were once routinely handled by human workers. At issue in health care is whether a computer program can provide the kind of "thorough, fair, and objective" decision that a human medical professional would bring in evaluating a patient's claim. 

"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," the suit alleges.

It added, "The scope of this problem is massive. For example, over a period of two months in 2022, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of just 1.2 seconds 'reviewing' each request."

The case was brought by Clarkson Law Firm, which has also sued Google-parent Alphabet over its use of AI, claiming that the search giant stole data from millions of users to train the program.

Cigna defends PXDX

In a statement to CBS News, Cigna called the lawsuit "highly questionable."

"Based on our initial research, we cannot confirm that these individuals were impacted by PxDx at all," the insurer said. "To be clear, Cigna uses technology to verify that the codes on some of the most common, low-cost procedures are submitted correctly based on our publicly available coverage policies, and this is done to help expedite physician reimbursement."

The insurance claims review occurs after patients have received treatment and "does not result in any denials of care," Cigna added.

The lawsuit's allegations follow a recent investigation by ProPublica that flagged similar denials of payment to Cigna customers. Typically, a patient obtains treatment from a doctor or health care facility, which then submits a claim to the insurer. Cigna's statement that its process doesn't result in denials of care may be correct — the patient, after all, gets the treatment — but some customers are allegedly left with bills that they believed would have been covered under their health plan.

One doctor who had worked at Cigna told ProPublica that they sign off on the denials from PxDx in batches, without reviewing the individual claims. "We literally click and submit," the doctor told the investigative news outlet. "It takes all of 10 seconds to do 50 at a time."

Kisting-Leung has appealed her two denials, but still hasn't received payment for the ultrasounds, the suit claims. The case is asking for damages as well as an order to stop Cigna from "continuing its improper and unlawful claim handling practices," as alleged by the complaint.