Source: DiversityInc

Healthcare and insurance giant, Cigna is facing a class action lawsuit filed by patients who claim that the company rejected their claims without even opening and reviewing them. The company has been accused of using an algorithm that enables doctors to wrongfully deny claims in large numbers leaving patients with unexpected bills to pay.

Cigna’s PXDX Algorithm

Patients normally acquire insurance to cater for their medical bills and prevent them from having to pay for expensive healthcare when illnesses befall them suddenly. However, since insurance companies are also for-profit businesses, they reserve the right to deny payment of medical procedures or bills they deem unnecessary (and don’t fit under the insurance contract).

To reject or approve a claim, insurance companies normally have medical doctors who have an understanding of illnesses and the necessary treatments to review them. The companies also define a list of acceptable tests and procedures for various diseases, which claims must meet to be approved, lest they are rejected.

With the rise of technology, Cigna has implemented a reviewing algorithm named ‘PXDX’, or procedure-to-diagnosis, which enables doctors in the company to review claims much faster. The system is so fast that a doctor can ‘review’ and reject a claim in 1.2 seconds without even opening it.

As expected, this has allegedly led to the rejection of so many relevant claims resulting in a lawsuit by two of the affected patients. The plaintiffs, Suzanne Kisting-Leung and Ayesha Smiley, were denied coverage for an ultrasound due to suspected ovarian cancer and a test for vitamin D deficiency respectively.

“Relying on the PXDX system, Cigna’s doctors instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills. The scope of this problem is massive,” the lawsuit stated.

The plaintiffs further added that the PXDX is an “improper scheme designed to systematically, wrongfully, and automatically deny its insureds medical payments owed to them under Cigna’s insurance policies.”

The issue came to light after ProPublica conducted an investigation in March where patients expressed their frustration following the rejection without proper review. ProPublica interviewed former employees of the insurance company who confirmed that PXDX enabled doctors to reject tens of thousands of claims in a month.

“We literally click and submit,” one former Cigna doctor said. “It takes all of 10 seconds to do 50 at a time.”

According to Propublica’s investigation and report, Dr. Cheryl Dopke, a medical director charged with reviewing claims, rejected 121,000 claims in the first two months of 2022.

Another director, Dr. Richard Capek, handled more than 80,000 instant denials in the same time span, whereas Dr. Paul Rossi denied more than 63,000 PXDX claims in two months.

The time allocated to each claim in the case of Cigna may fail to meet California regulations which require that insurers review claims using a “thorough, fair and objective investigation.”

As such, the lawsuit claims that Cigna’s operations violate a California law against unfair and deceptive commercial practices. The complaint further states that the system violates the state’s insurance code because it does not use a “reasonable standard” for processing claims.

In response to ProPublica’s report, Cigna said its review system was created to “accelerate payment of claims for certain routine screenings. This allows us to automatically approve claims when they are submitted with correct diagnosis codes.”

The insurance company further claimed that PXDX enables our medical directors to prioritize their time for more complex reviews. “It does not create any impediments to or denials of care because it takes place after a patient receives the service, and even a denial does not result in any additional out-of-pocket costs for patients using in-network providers,” Cigna said.

This doesn’t really represent the problems with a denial, however, as a vast majority of denials aren’t appealed, which means the patient likely has to pay for their treatment.

Cigna defended the PXDX system yet again after the lawsuit was filed. According to spokesman Justine Sessions, “PXDX is a simple tool to accelerate physician payments that have been grossly mischaracterized in the press. The facts speak for themselves, and we will continue to set the record straight.”

Clarkson Law Firm, which is representing the plaintiffs, is seeking damages in excess of $5 million, not including interest and other costs, and is requesting class-action status for the complaint.

The Tech Headache

The rise of technologies such as AI has presented various industries including healthcare with the chance to automate processes such as handling records and performing reviews as in the case of Cigna.

However, the medical industry is a sensitive sector when it comes to technology since it determines whether a patient gets to live or die. Therefore, while it helps doctors keep records more seamlessly or diagnose certain illnesses faster, it also poses its set of issues including privacy concerns with patient’s data.

Such systems are also required to maintain certain levels of accuracy when performing diagnosis which most of them struggle to attain. The implementation of systems such as those powered by AI also requires a lot of expensive hardware which in the long run are footed by patients raising their medical bills tremendously.

Regardless, companies have been attempting to adopt such systems. Google for instance developed an AI system meant to help doctors store data more effectively, analyse it, and eventually help in the process of making decisions.
So far, the system has been implemented by Blue Shield and Bupa health insurance companies.

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