US: Health insurer accused of rejecting claims using AI algorithm
Source: Middle East Insurance Review | Sep 2023
US health insurer Cigna has been accused of automatically rejecting thousands of claims by using AI based algorithms although the California law requires each of the claim to be examined individually.
A lawsuit filed in a US federal court said Cigna and Cigna Health and Life Insurance rejected more than 300,000 payment claims in just two months in 2022.
According to the lawsuit, the company used an algorithm called PXDX (procedure-to-diagnosis) to identify whether claims met certain requirements. The average time spent on each review was just 1.2 seconds. Huge batches of the rejected claims were then sent on to doctors who signed off on the denials.
“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 lawsuit said Cigna conducted an “illegal scheme to systematically, wrongfully and automatically” deny members’ claims to avoid paying for medically necessary procedures. Cigna has 18m policyholders in the US.
The lawsuit was filed on behalf of two Cigna policyholders who were forced to pay for the tests after the company denied their claims.
In a statement Cigna Healthcare said the lawsuit “appears highly questionable and seems to be based entirely on a poorly reported article that skewed the facts.”
The company said the process is used to speed up payments to physicians for common, relatively inexpensive procedures through an industry-standard review process similar to those used by other insurers for years.
Cigna said the review takes place after patients have received treatment, so it does not result in any denials of care. If some codes are submitted incorrectly, the company provides guidance on resubmission and how to appeal. M