Cigna says 4th lawsuit still shows no evidence of improper claim denials

Plaintiffs have had four chances to make a case that Cigna improperly rejected medical claims, the health insurer said in a new court filing.

Cigna asked the District Court for the District of Eastern California to toss out a class-action lawsuit filed by the plaintiffs now numbering six.

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.

"Despite having now had four opportunities to plead their claims, Plaintiffs still have not stated one," the motion reads. "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 lawsuit has since been amended three times, with plaintiffs joining and others departing. In their newest complaint, filed June 14, plaintiffs say they are fighting for a class of wronged patients.

"Cigna also utilizes the PXDX system because it knows it will not be held accountable for wrongful denials," the complaint states. "For instance, Cigna knows that only a tiny minority of policyholders (roughly 0.2%) will appeal denied claims, and the vast majority will either pay outof-pocket costs or forgo the at-issue procedure."

Connecticut resident Paige Van Pelt made similar claims as Kisting-Leung over Cigna's use of PxDx in a nearly identical Connecticut lawsuit filed 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.

ProPublica investigation

The lawsuits can be traced to a May 2023 investigative report 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.

Plaintiffs accuse Cigna of "deceptive and misleading representations."

"For example, Cigna’s policies falsely claim that determinations related to medical necessity of health care services would be made by a medical director, when in reality the medical directors are not involved in reviewing patients’ claims," their lawsuit states.

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."

Dr. Alan Muney, Cigna’s former chief medical officer, helped develop the PxDx process and cooperated with the ProPublica article, Cigna said. As Muney explained, the PxDx process was “designed to prevent claims for care that Cigna considered unneeded or even harmful to the patient,” the motion to dismiss says, and it “simply allowed Cigna to cheaply identify claims that it had a right to deny."

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.”

'Defeats their allegation'

In its motion to dismiss, Cigna notes that three of the plaintiffs who claim they were improperly denied were not actually denied through PxDx, supported by a declaration from Cigna’s Dr. Julie Kessel.

Kessel's declaration "defeats their allegation that Cigna’s use of PxDx deprived them of their covered benefits," the motion reads. "These three Plaintiffs’ claims should therefore be dismissed for lack of standing."

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

"A key part of claims administration services that Cigna provides to plans is to ensure that the plan only pays for services that (among other things) the plan actually covers," the motion to dismiss says. "PxDx is one way that Cigna checks incoming claims for compliance with plan benefit limitations."

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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.