Cigna uses algorithm that auto-denied 300,000 claims, alleged in lawsuit

Cigna was hit with another consumer class action after its algorithm to evaluate medical claims allegedly automatically denied more than 300,000 requests without review.

The plaintiff, Nevada resident Andrew Sachs, brought the action against Cigna Corp. and Cigna Health and Life Insurance Co. in Connecticut federal court on March 11.

“This action arises from Cigna’s illegal scheme to systematically, wrongfully, and automatically deny its insureds the thorough, individualized physician review of claims guaranteed to them by law and, ultimately, the payments for necessary medical procedures owed to them under Cigna’s health insurance policies,” the complaint alleged.

Cigna, a Connecticut-based health insurance company, created and uses an algorithm called PxDx, or procedure-to-diagnosis, which identifies “discrepancies between diagnoses and what Defendants consider acceptable tests and procedures for those ailments and automatically deny claims on those bases,” the complaint said.

The plaintiff alleged that once the algorithm denies claims, Cigna’s medical doctors confirm the denials without checking the patients’ medical history. The plaintiff claimed that under Connecticut law, Cigna’s doctors are required to “examine patient records, review coverage policies, and use their expertise to decide whether to approve or deny claims to avoid unfair denials.”

The complaint argued that the defendants breached the implied covenant of good faith and fair dealing, committed intentional interference with contractual relations and benefited from unjust enrichment.

Cigna denies any wrongdoing.

“This suit is baseless and seems to erroneously assume that every claim goes through Cigna’s ‘Procedure to Diagnosis’—also known as PxDx—review, when in reality, only a small subset of services do. Based on the allegations included in the complaint, this lawsuit also appears to involve only pre-service requests for prior authorization that would not be subject to PxDx review,” Cigna spokesperson Justine Sessions said in a company statement.

“To be clear: Patients are not denied care through PxDx because the review takes place only after they receive treatment, and most do not experience any additional costs even if a claim is denied,” Sessions said. “Procedure to Diagnosis is a simple process that helps accelerate payments to clinicians for common, relatively low-cost tests and treatments, and it is not powered by AI. This is similar to processes that have been used by CMS and our peers for years.”

Related: Cigna sued (again) for allegedly using software the ‘automatically’ denies claims

Consumer class actions alleging the same claims in this case have already been filed in the Eastern District Court of California, the Southern District Court of California, and two others in Connecticut District Court.

In addition, Cigna was sued in the Delaware Court of Chancery on Sept. 12 by a Cigna shareholder seeking access to records to determine if there was mismanagement of breaches of fiduciary duty.