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Cigna Sued for Allegedly Using Algorithm to Deny Claims

Analysis  |  By Jay Asser  
   July 27, 2023

The health insurer's PXDX system rejected coverage for "hundreds or thousands [of claims] at a time," the lawsuit states.

Cigna is on the wrong end of a class action lawsuit that alleges the payer improperly denied members' claims through an algorithm.

The lawsuit was filed in the Eastern District of California by two Cigna members who claim they were both denied payment due to Cigna's PXDX algorithm—one plaintiff was rejected for an ultrasound and the other was denied for a vitamin D test.

According to the lawsuit, PXDX allows doctors to automatically reject payments "in batches of hundreds or thousands at a time," enabling Cigna to bypass the legally-required individual physician review process.

"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 states. "The scope of this problem is massive."

PXDX first came under fire in a ProPublica article in March, which reported Cigna denied 300,000 requests for payments over two months in 2022 through the algorithm, spending an average of just 1.2 seconds reviewing each case. One Cigna doctor denied roughly 60,000 claims in a single month, according to the report.

The ProPublica article set off an investigation by the House Energy and Commerce Committee into Cigna's actions, as well as a probe by the Senate Permanent Subcommittee on Investigations into the use of algorithms to deny claims in Medicare Advantage.

In response to the recent lawsuit, a Cigna spokesperson said in a statement: "PXDX is a simple tool to accelerate physician payments that has been grossly mischaracterized in the press. The facts speak for themselves, and we will continue to set the record straight."

Further, Cigna hit back with a post on their website in which it detailed its claims review process, saying: "A recent media story riddled with factual errors and gross mischaracterizations may lead to a misunderstanding and distorted view of a simple process used by Cigna Healthcare and other health insurers to expedite payments to physicians and other providers. We are committed to being transparent about our policies and practices, and we are proud of the work our medical directors and other clinical experts do every day to help patients get the care they need and achieve value for both patients and their health plans."

The lawsuit also alleges that Cigna can utilize PXDX because it knows only a small fraction of members appeal denied claims, highlighting a Kaiser Family Foundation report that revealed only 0.2% of all denied claims by health insurers were appealed in 2021.

The case with Cigna raises more questions about the use of automation in claims processing. With AI's presence continuing to grow, the downside of implementing such technology has the potential to negatively affect patients and members.

Jay Asser is the contributing editor for strategy at HealthLeaders. 


Two Cigna members filed a class action lawsuit against the insurer for allegedly denying claims automatically through its PXDX algorithm, without a proper review process.

The lawsuit comes months after a ProPublica article that reported Cigna denied 300,000 requests for payments over a two-month span in 2022, spending an average of just 1.2 seconds reviewing each claim.

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