Cigna faces second class-action suit over automated claims denials

Cigna faces second class-action lawsuit: ©Yavdat - stock.adobe.com

Insurance giant Cigna is facing a second class-action lawsuit pertaining to its utilization of claims automation software.

The lawsuit, which was filed late August in a Connecticut district court, seeks class-action status to represent consumers nationwide who have had their claims reviewed by Cigna's "procedure-to-diagnosis" software, known as PxDx. The suit alleges that Cigna's software reviewed and denied customer claims in batches, all without the oversight of a medical professional.

This legal action is similar to a lawsuit filed against Cigna earlier this summer in California, escalating concerns surrounding the insurer's automated claims processing practices. Cigna has defended its use of this technology, asserting that it constitutes a standard review process similar to methods employed by other insurers.

The scrutiny surrounding Cigna's use of automated claims processing software began earlier this year after an investigative report by ProPublica revealed that Cigna physicians had employed PxDx to automatically reject claims without any human intervention or a thorough review of the patient's medical file.

Amid growing concerns, both the House Energy and Commerce committees and state regulators have initiated investigations into Cigna's deployment of the software. In July, two Cigna members in California filed a lawsuit alleging that they were unfairly denied payment due to the insurer's reliance on PxDx.

The software functions by flagging inconsistencies between a diagnosis and the tests and procedures that Cigna deems acceptable for a given medical condition. The lawsuits assert that Cigna employed this technology to deny payments en masse, potentially affecting hundreds or thousands of policyholders simultaneously.

Both the recent Connecticut lawsuit and the previous California case reference ProPublica's findings, indicating that PxDx was employed to reject over 300,000 payment requests within a two-month period in 2022, with an average review time of 1.2 seconds per claim.

Many states have enacted insurance laws and regulations that necessitate medical record reviews before insurers can reject claims for medical reasons. Connecticut, specifically, mandates health insurers carry out a "reasonable investigation based on all available information."

Cigna’s response to the most recent suit said it was baseless and relied on misinformation.

The lawsuit filed in Connecticut seeks class-action status to encompass all individuals nationwide who have had their claims reviewed using PxDx. Although the exact number remains unknown, it could potentially involve a substantial group, given that Cigna currently provides medical coverage to approximately 19.5 million people in the United States.