Investigative Report Shows Health Care Insurance Company Cigna Denies Claims 

By Consumers for Quality Care, on April 12, 2023

Investigative Report Shows Health Care Insurance Company Cigna Denies Claims 

A new investigative report from ProPublica is shining light on the dishonest practices employed by Cigna, interfering with the doctor-patient relationship and using algorithms to reject insurance claims. 

Nick van Terheyden was suffering from a Vitamin D deficiency, a condition that causes the bones to hurt and that if left untreated could lead to osteoporosis. His doctor ordered a blood test, which confirmed the diagnosis. Van Terheyden expected his insurer to cover the cost of the blood test, but Cigna denied the $350 claim, saying that the test was not “medically necessary.”

The same Cigna medical director who denied van Terheyden’s test also denied 60,000 other medical claims in a single month last year. Overall, ProPublica found that Cigna rejected 300,000 claims in just two months in 2022, spending an average of just 1.2 seconds reviewing each claim.  

According to state laws and regulations, doctors working for insurance companies are required to scrutinize patient records and to use their expertise to decide whether a claim should be approved or denied. But Cigna chose not to do this and instead made coverage decisions using an algorithm called PXDX. This algorithm is used to second-guess whether a doctor’s diagnosis is correct and whether the tests or procedures ordered by doctors are indeed “medically necessary.” One former doctor who was part of the process said, “We literally click and submit. It takes all of 10 seconds to do 50 [denials] at a time.” That’s hardly enough time for any doctor to judge the medical necessity of a procedure.

PXDX was created using a list of tests and procedures approved for corresponding predetermined illnesses. The system would then automatically turn down payments for treatments and illnesses that did not match the pre-approved list. Once a claim was rejected by the algorithm, it was then sent to medical directors to confirm the rejection, who would then do so without even glancing at the patient’s file for further consideration.

Ron Howrigon, a former Cigna executive, described PXDX as a “system built to deny claims.” Another former Cigna insider estimated that PXDX has saved the company billions of dollars. But for the patients denied by Cigna’s algorithm, these cost-savings are translated into medical debt. These unsuspecting consumers are forced to foot the bill for care that would have been covered but for an algorithm-based denial. 

 PXDX appears to have been designed with the expectation that patients whose claims are denied will choose not fight back. “Why not just deny them all and see which ones come back on appeal? From a cost perspective, it makes sense,” said Howrigon. Cigna believes consumers who can pay will eventually do so, because the alternative is an appeals process that often takes months.  

The investigative report found that Cigna is intentionally denying medical claims, boosting their profits while putting consumers in medical debt. CQC urges lawmakers and regulators to hold insurers accountable for unfair denials.