Cigna faces a lawsuit accusing it of using an algorithm called PxDx to deny hundreds of thousands of patient health insurance claims in violation of California state law. The class-action suit claims the algorithm saves the insurer money by rejecting claims and reduces labor costs by circumventing individual case reviews. Cigna defends its technology as ensuring correct billing and physician reimbursement. The case highlights the debate on whether algorithms can deliver “thorough, fair, and objective” decisions compared to human medical professionals. ProPublica’s investigation also raised similar concerns about payment denials to Cigna customers.
Cigna is facing a class-action lawsuit that claims the company utilizes an algorithm to assess and frequently deny hundreds of thousands of patient health insurance claims. The suit alleges that this approach violates California state law, which mandates insurers to conduct a “thorough, fair, and objective” investigation into each claim. Instead, Cigna allegedly relies on an algorithm called PxDx, purportedly designed to save money by denying claims and reducing labor costs by cutting the time doctors spend on reviewing each case.
The lawsuit highlights the growing trend of using algorithms and artificial intelligence to handle tasks that were traditionally done by human workers. The key concern in the healthcare industry is whether a computer program can make “thorough, fair, and objective” decisions comparable to those made by human medical professionals when evaluating patients’ claims.
The complaint includes specific instances of claim denials. For example, one woman with Cigna health insurance had an ultrasound due to concerns about ovarian cancer. Cigna denied her claim for the ultrasound and a follow-up procedure, stating they were not medically necessary, leaving her with a bill of $723. Another customer had a vitamin D test ordered by her doctor, which Cigna also denied without explaining.
The case was brought by the Clarkson Law Firm, which previously sued Google-parent Alphabet over its use of AI, alleging the company stole data from millions of users to train the program.
In response to the lawsuit, Cigna defended its use of PxDx, stating that the claims review process does not result in denials of care and is primarily used to ensure proper billing and expedite physician reimbursement.
However, the lawsuit’s claims echo a recent investigation by ProPublica that highlighted similar payment denials to Cigna customers. According to one doctor formerly employed by Cigna, the denials from PxDx were signed off in batches without individual claim review, taking mere seconds to process multiple denials.
The plaintiff, Suzanne Kisting-Leung, appealed her denials, but the ultrasounds have not been reimbursed, according to the suit. The lawsuit seeks damages and an injunction to halt Cigna from continuing its alleged improper and unlawful claim-handling practices.