Cigna, a major health insurance company, is facing a class-action lawsuit in the U.S. District Court in Sacramento, alleging that its algorithm-based claims review system, known as PxDx, is being used to reject a large number of patient health insurance claims without proper individual evaluation. The lawsuit accuses Cigna of violating California state law, which mandates insurers to conduct a “thorough, fair, and objective” investigation into each patient claim. According to the complaint, Cigna’s algorithm not only saves the company money by denying claims but also reduces labor costs by significantly cutting down the time doctors spend on reviewing each claim.
The case highlights the growing reliance on algorithms and artificial intelligence in handling tasks that were once the domain of human professionals. In the healthcare sector, concerns are raised about whether an algorithm can provide the same level of “thorough, fair, and objective” decision-making as human medical experts. The lawsuit claims that Cigna’s doctors instantly reject claims based on the PxDx system without even reviewing patient files, resulting in thousands of patients being left without coverage and burdened with unexpected medical bills. It is alleged that over a two-month period in 2022, Cigna doctors denied more than 300,000 payment requests using this method, with an average review time of just 1.2 seconds per request.
Cigna has defended its use of PxDx, stating that it employs technology to verify the correctness of codes for common, low-cost procedures based on publicly available coverage policies. The insurer maintains that this is done to expedite physician reimbursement and does not result in denials of care for patients. However, the lawsuit and a prior investigation by ProPublica indicate that some patients are left with bills they believed would be covered under their health plans. The lawsuit seeks damages and an injunction to halt Cigna from continuing its alleged improper and unlawful claims-handling practices, shedding light on the ongoing debate surrounding the use of algorithms in healthcare decision-making.
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