A shareholder is suing the Cigna Group in Delaware's Court of Chancery to obtain more information about the company's claims review process following a ProPublica report that alleges the company denies large batches of members' claims without individual review, Law360 reported Sept. 13.
The shareholder, Charles Blackburn, said he attempted to seek more information from Cigna directly following the March report from ProPublica, which claims the insurer uses an algorithm called "PXDX" to complete the review and allow physicians to sign off on groups of denied claims, a process that may save the company millions of dollars every year when members don't appeal.
According to Law360, Mr. Blackburn did not receive the requested information, which includes reports about the "legality or financial impact" of the PXDX tool. He is looking to "investigate possible mismanagement and/or breaches of fiduciary duty and other wrongdoing" by Cigna, and additional lawsuits could occur.
"There is reason to believe that the company's use of automated systems to deny insurance claims will result in regulatory action and has already caused reputational harm," the complaint said, per Law360.
In California, two Cigna members filed a class-action complaint against the insurer over the same alleged issues. Many states, including California, require physicians to review patient files and coverage policies before denying claims for medical reasons. The July complaint claims Cigna bypassed those steps using the PXDX tool.
Following the ProPublica report, state insurance commissioners and federal lawmakers publicly raised concerns and requested more information from Cigna about the process, with some calling for an investigation.
Cigna has previously said the ProPublica report is "riddled with factual errors and gross mischaracterizations." The company said its claims review process follows industry standards, including processes that have been used by CMS. It also noted that the technology behind PXDX is more than a decade old and does not involve algorithms, artificial intelligence or machine learning. The company has published additional information on its website about the tool and its claims process.
"PxDx allows us to automatically pay providers for claims that are submitted with the correct diagnosis codes and prioritizes our medical directors' time for more complex reviews," a Cigna spokesperson previously told Becker's. "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."