Cigna using AI to reject claims, lawsuit charges

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Cigna, one of the country’s largest health insurance companies, faces a class action lawsuit over charges that it illegally used an artificial intelligence (AI) algorithm to deny hundreds of thousands of claims without a physician’s review.

The lawsuit, filed July 24 in the U.S. District Court for the Eastern District of California, alleges that Cigna used an AI algorithm called PXDX to screen thousands of claims for treatments that didn’t match certain pre-set criteria, after which its doctors would deny the claims without individually reviewing them.

By so doing, the suit charges, Cigna denied policyholders “the thorough, individualized physician review of claims guaranteed to them by California law and…the payments for necessary medical procedures owed to them under Cigna’s health insurance policies.” Cigna has about 2.1 million members in the state.

According to the suit, Cigna denied coverage to two of its members for tests their doctors deemed medically necessary. One of the tests was a screening for Vitamin D deficiency, the other for a transvaginal ultrasound cancer screening. The company rejected appeals of both denials, forcing both members to pay for their procedures out of pocket.

In a statement to CBS News Cigna said, "Based on our initial research, we cannot confirm that these individuals were impacted by PXDX at all.

"To be clear, Cigna uses technology to verify that the codes on some of the most common, low-cost procedures are submitted correctly based on our publicly available coverage policies, and this is done to help expedite physician reimbursement," the company added.

The suit says that by relying on the PXDX system, Cigna’s doctors could “instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills,” and that the system “saves Cigna money by allowing it to deny claims it previously paid and by eliminating the labor costs associated with paying doctors…for the time needed to conduct individualized…review for each Cigna insured.”

The plaintiffs are asking to be awarded “statutory and punitive damages” along with costs and attorneys’ fees, and for “appropriate declaratory and injunctive relief enjoining Cigna from continuing its improper and unlawful claim handling practices.”