Cigna, a major health insurance company, faces a federal lawsuit alleging the improper rejection of over 300,000 patient claims using an algorithm called PXDX. The lawsuit claims that claims were rejected without proper examination, leaving patients without coverage and facing unexpected bills. Cigna denies the allegations, stating that the process is meant to expedite physician reimbursement and does not result in denials of care. The lawsuit seeks damages and a jury trial.
A recent federal lawsuit has surfaced, accusing the health insurance giant Cigna of improperly handling patient claims through the use of a computer algorithm. The lawsuit, a class-action filed in federal court in Sacramento, specifically claims that Cigna Corp. and Cigna Health and Life Insurance Co. automatically rejected over 300,000 payment claims in just a two-month period.
Cigna employed an algorithm known as PXDX (short for “procedure-to-diagnosis”) to determine whether claims met certain requirements, with an average review time of only 1.2 seconds per claim. The algorithm swiftly sorted through massive batches of claims, subsequently sending them to doctors who would then approve the denials.
According to the lawsuit, Cigna’s doctors would reject claims outright based on medical grounds without any individual examination of patient files. This left thousands of patients without coverage and facing unexpected medical bills.
The lawsuit further contends that Cigna engaged in an “illegal scheme” to systematically and wrongfully deny its members’ claims, thus avoiding payment for medically necessary procedures.
Cigna, a company with approximately 18 million U.S. members, including more than 2 million in California, faced the lawsuit on behalf of two of its members from Placer and San Diego counties. These members were compelled to pay for medical tests after Cigna denied their claims.
The crux of the lawsuit is Cigna’s alleged violation of California’s requirement to conduct “thorough, fair, and objective” investigations of submitted medical expense bills. The plaintiffs are seeking unspecified damages and a jury trial.
In response to the allegations, Cigna Healthcare released a statement, asserting that the lawsuit appeared to be based on a poorly reported article with skewed facts. The company explained that the algorithmic process was used to expedite physician reimbursement for common, relatively inexpensive procedures. Cigna claimed that the review took place after patients received treatment and did not result in any denials of care. If incorrect codes were submitted, the company stated that clear guidance was provided on resubmission and appeals.
