Cigna Faces More Lawsuits, Potential Legislation Over Health Insurance Denials

The Cigna Group faces a growing number of lawsuits, as well as potential legislation, over allegations that the health insurer used a computer program to automatically reject medical claims, without ever having a physician review whether the treatments should be covered.

The legal problems come following a ProPublica report published on March 25, which alleged the health insurance company rejected thousands of patient claims without opening the files, as part of an effort to save millions of dollars at the expense of policyholders.

Many states require that a physician review patient records and policy coverage before deciding whether to approve or deny a medical claim. However, the ProPublica report indicated that Cigna’s PxDx review system has denied coverage to thousands of members and left them with unexpected medical expenses, without a doctor ever reviewing their claims.

The latest complaint (PDF) was filed by Charles Blackburn, a Cigna shareholder, in Delaware state court on September 12, indicating that he attempted to obtain information directly from Cigna shortly after the report was published, but was never given the requested reports as an investor.

Blackburn is calling for an investigation into potential wrongdoing and mismanagement by Cigna, and access to the company’s books. He owns about 200 shares of the company and has been an investor since October 2021.

“Plaintiff made the Demand in good faith and with a proper purpose. Plaintiff also described with reasonable particularity its proper purpose and the books and records that he desires to inspect,” the lawsuit states. “Moreover, the books and records that Plaintiff seeks to inspect are directly connected with Plaintiff’s proper purpose. By satisfying the aforementioned criteria, Plaintiff fulfilled Section 220’s requirements to inspect and copy the books and records of the Company, which is Plaintiff’s right as a stockholder of Cigna.”

The lawsuit alleges Cigna  has violated Blackburn’s shareholder rights by denying him access to books and records which should be made available.

Cigna Health Insurance Denial Lawsuits

Blackburn’s lawsuit follows a string of similar claims raised against the health insurer this summer by plaintiffs who said they were unfairly denied coverage.

The first complaint was filed on July 24 by Suzanne Kisting-Leung and Ayesha Smiley in the U.S. District Court for the Eastern District of California, which alleges that Cigna’s PxDx system was designed to allow physicians to deny large batches of member claims. The class action lawsuit accuses Cigna of avoiding the additional labor expenses necessary to manually review claims, despite a California law that requires a physician’s review before approving or denying them.

A similar claim was filed on August 25, by Paige Van Pelt in the U.S. District Court for the District of Connecticut to pursue damages against Cigna. The plaintiff alleged that Cigna denied her claims for a medically necessary colonoscopy and endoscopy on “medical grounds” using the PxDx software, and without a physician ever reviewing them, leaving her responsible for the expenses. The tests were medically necessary due to a Lynch syndrome diagnosis, which puts her at a higher risk for developing certain cancers, the lawsuit claims.

Another complaint was filed in late August by a Minnesota patient who was enrolled in a self-funded Cigna health plan in 2018. The plaintiff alleged that Cigna automatically denied coverage for her claims, leaving her with $3,200 in medical bills that were sent to collections.

Lawmakers Considering New Health Insurance Legislation

Federal lawmakers and state insurance commissioners have raised concerns over the Cigna review process and have requested Cigna provide more information on how its insurance decisions are being made. The issue has also prompted state legislators to implement potential regulations in an effort to address the use of artificial intelligence in the health insurance claim process.

Pennsylvania lawmakers issued a press release on August 14, indicating that they will introduce legislation to regulate the use of artificial intelligence when reviewing health insurance claims.

The legislation would require health insurance companies to submit their artificial intelligence systems to the Department of Insurance for certification, and to document that the claims were reviewed prior to their decision of approving or denying the claims.