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Algorithm Allegations: Cigna Faces Lawsuit for Using AI to Reject Health Insurance Claims

Cigna, a major health insurer, is facing a class-action lawsuit accusing the company of utilizing an algorithm to review and reject hundreds of thousands of patient health insurance claims. The suit, filed in a U.S. District Court, claims that Cigna’s actions violate California state law, which mandates a “thorough, fair, and objective” investigation into each patient claim. Instead, the insurer is alleged to rely on an algorithm called PxDx, which saves money by denying claims and reduces labor costs by bypassing individual doctor reviews.

According to the complaint, the PxDx system instantly rejects claims on medical grounds without doctors opening patient files, leaving thousands of patients without coverage and facing unexpected bills. The lawsuit highlights the growing use of algorithms and artificial intelligence in handling tasks that were previously done by humans. In healthcare, the question arises whether a computer program can provide the same level of “thorough, fair, and objective” decision-making as human medical professionals when evaluating patient claims.

Examples of denied claims include a California woman with Cigna health insurance who had an ultrasound to check for ovarian cancer, and another customer who had a vitamin D test ordered by their doctor. Both claims were denied, leaving the patients with unexpected costs.

The lawsuit also points out that during a two-month period in 2022, Cigna doctors denied over 300,000 requests for payments using the PxDx system, spending just an average of 1.2 seconds “reviewing” each request.

Cigna has responded to the allegations, calling the lawsuit “highly questionable” and stating that they cannot confirm if the individuals were impacted by PxDx at all. The insurer emphasized that its technology is used to verify that codes for common, low-cost procedures are submitted correctly based on coverage policies, which helps expedite physician reimbursement. Cigna also maintains that its claims review process does not result in denials of care.

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The lawsuit comes on the heels of a ProPublica investigation that uncovered similar denials of payment to Cigna customers. Though the insurer maintains that its process does not lead to denials of care, some customers have allegedly faced unexpected bills, while believing their treatments would be covered under their health plans.

One doctor who previously worked at Cigna revealed to ProPublica that they signed off on PxDx denials in batches without individually reviewing each claim, a process that takes mere seconds for multiple claims.

The case brought by Clarkson Law Firm seeks damages and an order to halt Cigna from continuing its alleged improper and unlawful claim handling practices. As the legal battle unfolds, the outcome may shape the boundaries and ethical considerations surrounding the use of AI in health insurance claims, raising questions about the need for transparency and accountability when algorithms play a significant role in decision-making.

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