Earlier this year on September 20, 2024, Plaintiffs filed their Opposition papers to Cigna Corporation’s and Cigna Health and Life Insurance Company’s (collectively, “Cigna”) motion to dismiss their lawsuit challenging Cigna’s use of an AI algorithm to allegedly automatically deny insurance claims. Following a Reply filed by Cigna on October 15, 2024, the parties are currently awaiting a decision on the motion.
The Plaintiffs allege in their complaint that, “Relying on the [automated] 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.” Claiming the scope to be “massive,” they further state that “over a period of two months in 2022, Cigna’s doctors denied over 300,000 requests for payments using this method, spending an average of just 1.2 seconds ‘reviewing’ each request.”
Seeking to dismiss the complaint, Cigna, a major medical insurance company, had asserted in its motion that the use of the PXDX system was proper, as its function was to identify non-covered claims. It stated that “rather than being some unlawful scheme to fill Cigna’s pockets, PXDX checks whether certain specific treatments that providers order are actually covered by the member’s benefit plan.”
Regarding PXDX-related arguments, Cigna also contended that several plaintiffs, despite alleging their claims were denied using the PXDX system, failed to identify any plan terms demonstrating that such denials were contrary to the plan’s provisions. Furthermore, Cigna argued that these plaintiffs also failed to show any plan terms that would prohibit Cigna from using a claims review process like PXDX. Separately, Cigna asserted that the claims of three plaintiffs were not actually denied through the use of the PXDX system.
In opposing an argument by Cigna that their claims are time-barred, the Plaintiffs argue that Cigna’s use of PXDX to review claims for benefits was “secret” and “undisclosed.” They assert that they brought the claims when they were made aware of such use, “within the limitations period after accrual.”
Such alleged concealed use is also related to the Plaintiffs’ argument in their opposition papers saying that “Cigna breached plan provisions guaranteeing medical director review of medical necessity, and by hiding its use of PXDX to make those determinations instead…” This argument seeks to overcome the exhaustion requirement found in ERISA raised by Cigna’s motion.
The Plaintiffs also argue that:
- Cigna failed to follow required claims procedures;
- It made false representations about doctor involvement in claims reviews; and
- It provided “false reasons for denial” and false “determinations of medical necessity”
The case is before the United States District Court for the Eastern District of California. Although the docket report for that court indicates that a hearing on the motion was initially set for December 17, 2024, that date has been vacated and is “to be reset at a later date if the court determines that oral argument is needed.”
Categories: AI, Uncategorized
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