Cigna asks court to toss lawsuit accusing it of improperly rejecting claims

Cigna filed a motion Thursday to dismiss a class-action lawsuit accusing the insurer of improperly rejecting medical claims.

Initially filed in July, the federal lawsuit alleges that Cigna used a computer algorithm to automatically reject hundreds of thousands of patient claims without examining them individually as required by California law.

At issue is Cigna’s “procedure-to-diagnosis” or PxDx software, which reviewed and denied customer claims.

The lawsuit has since been amended twice and Cigna argues that it still does not state a claim.

"The problems start with Plaintiffs’ assumption that PxDx is an 'illegal scheme' that Cigna implemented to deny plan members their covered benefits, because Plaintiffs do not plead any facts to show such a fraudulent and unlawful scheme," the motion to dismiss reads.

The California lawsuit lists four plaintiffs, with Suzanne Kisting-Leung being part of the lawsuit from the initial filing. Connecticut resident Paige Van Pelt made similar claims as Kisting-Leung over Cigna's use of PxDx in a nearly identical lawsuit filed there in August.

Van Pelt alleged that she was denied reimbursement for a medically necessary colonoscopy and endoscopy. However, Van Pelt voluntarily withdrew her lawsuit on Nov. 6.

'Misleading and inflammatory'

The lawsuits can be traced to a May 2023 investigative report public by ProPublica. The story claimed that Cigna "has built a system that allows its doctors to instantly reject a claim on medical grounds without opening the patient file, leaving people with unexpected bills, according to corporate documents and interviews with former Cigna officials."

Over a period of two months last year, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of 1.2 seconds on each case, ProPublica reported, citing documents.

Cigna's motion to dismiss the Kisting-Leung lawsuit calls the ProPublica piece "misleading and inflammatory" and said the lawsuits that followed are "based on a fundamental misunderstanding about how the PxDx claims review process works and when Cigna uses it."

In a previous statement sent to InsuranceNewsNet, Cigna explained its position: “To be clear: patients are not denied care through PxDx because the review takes place only after they receive treatment, and most do not experience any additional costs even if a claim is denied. Procedure to Diagnosis is a simple process that helps accelerate payments to clinicians for common, relatively low-cost tests and treatments, and it is not powered by AI or an algorithm. This is an industry-standard review which is similar to processes that have been used by CMS and our peers for many, many years.”

"Rather than being some unlawful scheme to fill Cigna’s pockets, PxDx simply checks whether certain specific treatments that providers are ordering are actually covered by the member’s
benefit plan," the motion to dismiss said.

Connecticut-based Cigna is one of the nation's largest health plans and has 18 million U.S. members.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.