Cigna Class Action Lawsuit Alleges Health Insurer Denied Thousands of Patient Claims Without Examining Them

According to allegations raised in a recently filed class action lawsuit, Cigna health insurance uses a computerized system to instantly reject some patients’ claims, without ever having a physician review whether the treatment should be covered.

The complaint (PDF) was filed by Suzanne Kisting-Leung and Ayesha Smiley in the U.S. District Court for the Eastern District of California on July 24, seeking class action status to pursue damages against Cigna Corporation and its subsidiary, Cigna Health and Life Insurance Company, on behalf of all individuals who purchased health insurance from the company in California over the past four years.

Cigna is one of the leading medical health insurance providers in the U.S., insuring nearly 18 million individuals nationwide, with approximately 2.1 million customers in the state of California alone.

Although California law requires insurance companies to have an independent medical professional review insured members’ claims, to make certain decisions on what to cover are impartial and unbiased, the Cigma class action lawsuit indicates that a computerized system has left thousands of members without health insurance coverage, and with unexpected medical expenses.

Cigna Accused of Illegally Denying Medical Coverage to Customers

The plaintiffs allege that Cigna’s algorithm system, PXDX, was intentionally designed to deny large batches of insured member’s requests for coverage of necessary medical procedures, and other medical expenses, which should be covered under their health insurance policies, even including claims that had been previously approved. The lawsuit states that PXDX enables physicians to reject patient claims in batches of hundreds and thousands, without following the state’s legally required review.

The company’s motive, according to the lawsuit, was to avoid paying the additional labor expenses necessary to conduct the manual review process, and to avoid paying the claims of insured members that were eligible for coverage under their health insurance policies, even if they had already received approval for coverage of their medical expenses.

In just a two month period in 2022, Cigna denied more than 300,000 members’ claims requesting payment of medically necessary treatments, due to those procedures not matching the health insurance company’s pre-set medical criteria, the lawsuit notes. While Cigna says it denied the claims based on “medical grounds,” the lawsuit alleges that no physician ever opened or reviewed those patients’ files before their claims were denied.

The class action lawsuit also accuses Cigna of violating another California law by failing to provide detailed and factual explanations of why patients’ claims were denied.

The lawsuit indicates Kisting-Leung, a California resident who has been insured by Cigna since 2018, was referred to undergo two transvaginal ultrasounds in August and November 2022. Her doctor suspected she had a risk of ovarian cancer, and deemed the procedures medically necessary.

However, after the suspected mass was found to be a noncancerous ovarian cyst, Cigna denied coverage of the ultrasounds, informing her radiologist that the company had deemed them as medically unnecessary.

Kisting-Leung attempted to appeal the claim denials, noting that Cigna’s medical coverage policy considers a transvaginal ultrasound as medically necessary for women who are at an increased risk of developing ovarian or endometrial cancer.  However, despite the plaintiff’s doctor deeming the procedures medically necessary,  Cigna denied her claims using the PXDX system, instead of conducting a physician’s review of her claims, according to the lawsuit.

This left her responsible for a $198 bill from the first ultrasound, and an additional $525 bill from the second procedure.

Smiley, another California resident who has been insured with Cigna since 2020, had a blood test ordered by her doctor to check her Vitamin D levels in January 2023. Her doctor had determined the test was medically necessary to confirm she did not have a deficiency.

Cigna also denied her claim and found the procedure was not medically necessary using the PXDX system, Smiley claims. As a result, she was forced to pay out-of-pocket for the test.

The lawsuit presents claims of breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, unjust enrichment, and violation of the business and professions code under California’s Unfair Competition Law.

Plaintiffs  call for Cigna to pay compensatory and punitive damages to themselves, as well as to what they estimate to be hundreds of thousands, or possibly millions, of other similarly situated California residents insured by the health insurance corporation.