News: Cigna sued for allegedly using algorithm to deny 300k claims in 2 months

Following a ProPublica article in March reporting Cigna denied 300,000 requests for payments over two months in 2022 through the PXDX algorithm, two Cigna members have now filed a class action lawsuit against the company. The lawsuit alleges the payer improperly denied members’ claims through the algorithm “in batches of hundreds or thousands at a time” which has enabled Cigna to bypass the legally-required individual physician review process, HealthLeaders reported.

The two plaintiffs claim they were both denied payment due to the PXDX algorithm, one getting rejected for an ultrasound while the other was denied receiving a vitamin D test. “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 lawsuit states. “The scope of this problem is massive.”

These claims echo the ProPublica article’s reports, which state Cigna spent an average of just 1.2 seconds reviewing each claim, and one Cigna doctor denied roughly 60,000 claims in a single month. Following the article’s publication, the House Energy and Commerce Committee began an investigation and the Senate Permanent Subcommittee on Investigations looked into the use of algorithms to deny claims in Medicare Advantage.

A Cigna spokesperson responded to the lawsuit in a statement, saying, “PXDX is a simple tool to accelerate physician payments that has been grossly mischaracterized in the press. The facts speak for themselves, and we will continue to set the record straight.” Cigna also made a post on their website explaining its claims review process and promising full transparency.

The lawsuit also uses a Kaiser Family Foundation report, which revealed only 0.2% of all denied claims by health insurers were appealed in 2021, to allege that Cigna can utilize PXDX because the payer knows few will appeal denied claims.

Editor’s note: To read HealthLeaders’ coverage of this story, click here. To read the lawsuit, click here. The upcoming September/October edition of the CDI Journal will be focused on denials management and appeals. It will release on September 1, 2023.