How Cigna Saves Money with AI Claim Management

Cigna, one of the largest health insurance providers in the United States, has implemented a controversial system that allows its doctors to instantly reject claims without even opening or reviewing the patient files. This practice, which has drawn criticism from regulators and consumer advocates alike, has enabled it to save millions of dollars by denying claims en masse, often without proper consideration of the individual circumstances of each case.

The Heartless Algorithm, CxDx

At the heart of this scheme lies a sophisticated algorithm developed by a former pediatrician with decades of experience advising insurers on cost-cutting measures. This algorithm flags any perceived mismatches between the patient’s diagnosis and the tests or procedures that Cigna deems acceptable for that particular condition. Once the algorithm identifies these “mismatches,” Cigna’s doctors are then tasked with signing off on the denials in batches, spending an average of just 1.2 seconds per case.

Over a two-month period last year alone, Cigna doctors denied over 300,000 requests for payments using this expedited method, raising serious concerns about the objectivity and integrity of the review process. Former Cigna doctors have confirmed that the review system was designed to facilitate rapid claim rejections, with one physician admitting, “We literally click and submit. It takes all of 10 seconds to do 50 at a time.”

The algorithm’s role in Cigna’s claim denial process is a stark reminder of the growing influence of technology in healthcare decision-making. While algorithms can be powerful tools for analyzing data and identifying patterns, their reliance on predetermined rules and parameters also raises concerns about potential biases and oversimplifications. In the case of Cigna’s system, the algorithm appears to prioritize cost savings over individual patient circumstances, essentially reducing complex medical cases to a series of checkboxes.

Circumventing Appeals and Scrutiny

Cigna’s strategy appears to be predicated on the assumption that the majority of patients will simply accept these denials rather than go through the hassle of appealing the decision. The company estimates that only 5% of people will actually challenge a rejection resulting from this automated review system. This calculation implies that Cigna is willing to deny legitimate claims en masse, betting on the fact that most patients will simply pay the unexpected bills out of pocket.

State regulators have expressed concerns that the system raises “some red flags” and may not comply with requirements for insurance company doctors to be objective and flexible when evaluating each case. Cigna, however, remains steadfast in its defense of the system, emphasizing that it was created to “accelerate payment of claims for certain routine screenings” and that it does not prevent a patient from receiving care, but only decides when the insurer won’t pay.

But former Cigna executives admit that the true intent of the system was to deny claims that the company had previously paid, making it cheaper to turn down claims because the company’s doctors never had to open a file or conduct any in-depth review. This revelation underscores the inherent conflict of interest at play, as Cigna’s pursuit of cost savings appears to have taken precedence over its fiduciary duty to its policyholders.

The practice of denying claims without proper review is not unique to Cigna. Many insurance companies have been accused of employing similar tactics, often relying on complex algorithms and automated systems to streamline the claims process. However, critics argue that these shortcuts can lead to a dehumanization of healthcare, where patients are reduced to mere data points, and their individual circumstances are overlooked in the name of efficiency and profitability.

The Impact on Patients and Healthcare Providers

The consequences of Cigna’s claim denial practices extend far beyond the financial implications for the company itself. For patients, denying legitimate claims can result in significant out-of-pocket expenses, exacerbating the already high healthcare costs in the United States. Furthermore, the uncertainty and stress associated with navigating the appeals process can take a toll on individuals’ physical and mental well-being. Healthcare providers are also impacted by these practices, as they are forced to devote valuable time and resources to appealing denied claims. This administrative burden can detract from their ability to provide quality care to patients, as they must navigate the complex and often frustrating world of insurance reimbursements.

Critics argue that Cigna’s actions are not only unethical but also potentially illegal. Insurance companies are required by law to conduct thorough and impartial reviews of claims, taking into account the individual circumstances of each case. By relying on an algorithm to make sweeping denials without proper consideration, Cigna may be violating these regulations and exposing itself to legal action.

If you or a loved one has been affected by Cigna’s claim denial practices, seek legal counsel to protect your rights and ensure you receive the coverage and benefits you are entitled to. At Raval Trial Law, our experienced attorneys are well-versed in insurance litigation and are committed to holding insurance companies accountable for their actions. Contact us today to learn how we can help.