Cigna, a Connecticut-based health insurer, is currently facing a legal challenge in California, as two of its members have filed a lawsuit against the company. The plaintiffs claim that Cigna utilizes a tool known as PXDX, which enables the insurer to reject numerous claims in bulk.
The lawsuit centers around two specific cases where the plaintiffs’ claims were denied through the PXDX system. One claim pertained to an ultrasound required for diagnosing ovarian cancer, while the other was for a vitamin D test.
Claims and PXDX Lawsuit Against Cigna in California
- Lawsuit alleges Cigna uses PXDX tool to reject multiple member claims in a sweeping manner.
- Bulk-denied claims sent to physicians for approval, potentially without proper patient file examination.
- Average processing time for claim rejection through PXDX is approximately 1.3 seconds.
- California regulations require thorough investigation of claims by medical professionals.
- Use of PXDX allowed Cigna to reject over 300,000 payment requests in just two months in 2022.
Algorithm’s high speed hinders individual claim evaluation, potentially violating state law.
By relying on the PxDx system to investigate claims, the lawsuit argues that Cigna has deceived its members into believing that their claims are individually assessed, leading to payment for necessary medical procedures.
The plaintiffs are seeking class-action status for the lawsuit, potentially enabling over 2 million members covered by Cigna in California over the past four years to join the legal action.
Cigna previously faced criticism for its use of the PxDx program when ProPublica published an article on the matter in March. This led to investigations by state and federal regulators, as well as the House Energy and Commerce Committee.
According to Cigna, the PxDx algorithm functions by identifying discrepancies between a diagnosis and the tests and procedures that the company deems appropriate for that specific condition. The system primarily targets 50 specific diagnoses where claims are often deemed medically unnecessary, such as vitamin D tests, dermabrasion, and chemical peels.
Cigna clarified its position, stating that the technology is used to verify the accuracy of codes for common, low-cost procedures based on publicly available coverage policies.
The insurer maintains that the review process is an industry standard, similar to what CMS and other peers have been employing for years.
Aside from Cigna, other insurance providers like United Healthcare and Medicare Advantage have also been known to use AI to reject claims. This approach proves lucrative for payers as it reduces the number of claims that insurers need to pay. The Senate Permanente Subcommittee on Investigations has scrutinized the use of AI in the case of Medicare Advantage plans.
