Permission to Pay: Technologies touted as fix for health insurance frustrations draw criticism, legal action

(InvestigateTV) — Amanda Bredlow knew seeking medical assistance to grow her family would likely be a challenging journey physically, emotionally and financially.

What she didn’t expect were the piles of paperwork and hours of phone calls with an insurance company over coverage of those fertility treatments — a process that she said seemed devoid of logic or compassion.

“It felt like banging my head against the wall,” she said.

The reasons for the continued denials didn’t make sense to Amanda and her husband, her doctors, or even representatives at the company itself, according to her recollection of phone calls.

As denial letter after denial letter landed in her mailbox, she said the vague or sometimes contradictory language began to almost feel robotic.

“That’s actually what my husband’s hypothesis was,” she said, “that this is not a human doing this. This is a computer.”

When they saw headlines earlier this year that their insurer, Cigna, had reportedly been using a computer program to process and batch-deny claims with limited human review, she said they immediately wondered if they were dealing with something similar.

“My husband just had a light bulb, ‘Aha moment: This must be what’s happening to us,’” she said. “There’s no other explanation for this, other than there’s something weird going on behind the scenes.”

They were not the only ones.

Multiple lawsuits have been filed in the wake of the ProPublica story about Cigna’s “PXDX” or “procedure-to-diagnosis” program, which looks at what care a patient received and if the diagnosis recorded by their doctor fits with the company’s clinical guidelines — making coverage determinations accordingly.

“This is a big problem because insureds are being left with bills that they were not expecting to pay and that they shouldn’t have to pay,” said Shireen Clarkson, a lead attorney on the first case filed — a class action in California that claims PXDX violates state law requiring fair and thorough investigation of insurance claims.

The suit also claims the program essentially strips insurance customers of the benefits they are contractually owed.

Cigna has responded to criticism by saying the program is limited to a small number of low-cost procedures and that it allows payments to doctors and hospitals to be processed more quickly and efficiently, echoing how the insurance industry at large continues to push expanded technology as the solution to the frustrations felt by patients and doctors.

But some critics are worried about the consequences of continuing down a further-automated path.

“These are human problems that I’m going through. Having an infertility diagnosis is a human problem that I have to deal with every day, and this is something that is not being taken on with a human approach,” Bredlow said.

‘Thorough, fair and objective’

When a claim is filed with a health insurance company, it includes codes for the tests or procedures the patient received as well as a code for the medical diagnosis given by the provider that resulted in the care.

Coverage being dependent on a particular diagnosis is outlined in many health insurance plans. For example, a plan may only cover screening for diabetes if the patient has received an official diagnosis of obesity or may only cover a specific anti-inflammatory medication for specific rheumatologic conditions.

These specifications are based on an insurance company’s clinical guidelines — a set of policies that outline what types of care the company deems “medically necessary” for a given health condition.

The concern and legal action over Cigna’s PXDX program isn’t about the relationship between these codes, but about how the company allegedly handled the claims the system flagged for denial.

According to ProPublica’s reporting, when claims were flagged for denial, company physicians known as “medical directors” were to review these medical necessity determinations — and they did, but allegedly in large batches that would result in each director spending just an average of 1.2 seconds on each claim.

“It’s sent to a doctor who essentially rubber stamps it,” Clarkson, the plaintiff’s attorney said, “and that is resulting in sometimes in unlawful denials and improper denials.”

Her firm argues in the complaint filed in federal court and asserted in an interview with InvestigateTV that those denials are unlawful because of California’s strict insurance regulations, which include a requirement that “every insurer shall conduct and diligently pursue a thorough, fair and objective investigation” when settling claims.

“What that means is that they’re supposed to use doctors to open up the patient files and examine the claim, examine the patient’s history, complications, etc., to then use their expertise to determine whether that claim is medically necessary, whether that procedure was medically necessary,” Clarkson said. “And Cigna is not always doing that, with some of their claims.”

The lawsuit was filed in July on behalf of two named plaintiffs as well as seeking class action status. In September the complaint was amended to focus on a single named plaintiff, Suzanne Kisting-Leung.

Kisting-Leung received a transvaginal ultrasound in August of 2022 after her doctor, suspecting she might have ovarian cancer, referred her for the imaging. Two months later, the lawsuit stated she received notification that Cigna had denied the claim for the ultrasound because it was deemed “not medically necessary,” leaving Kisting-Leung on the hook for the $198 cost.

According to the complaint, this denial was made despite Cigna’s clinical guidelines that transvaginal ultrasounds are medically necessary if a patient has a risk of ovarian or endometrial cancer.

The ultrasound revealed Kisting-Leung had a dermoid cyst on her ovary, and in November 2022, her doctor ordered a second, follow-up transvaginal ultrasound. Coverage of that imaging was again denied by Cigna — this time leaving the patient with a $525 bill.

“The idea here is that these are very important procedures,” said Glenn Danas, another Clarkson Law Firm attorney leading on the case. “These are things that for different individuals — their unique medical history, the circumstances of the case — these are all things that require a doctor to review. Which is exactly why California law requires it.”

Kisting-Leung and the attorneys believe her claims were processed using Cigna’s PXDX system and subject to the alleged batch-review process outlined in ProPublica’s reporting, resulting in the denial that according to the complaint, has yet to be reversed despite an appeal.

“Upon information and belief, the Cigna Defendants failed to have their doctors conduct a thorough, fair, and objective investigation into each of Ms. Kisting-Leung’s claims and instead denied them based on the automated PXDX process,” the complaint states.

A formal response has not yet been filed by Cigna in court. According to court documents, the plaintiff plans to file a second amended complaint to “add one new class representative and also provide additional details pertaining to her claims and to the class allegations.” The deadline for that new filing is Dec. 18, and Cigna will have until Feb. 1, 2024 to respond.

Cigna has more than two million policyholders in California, according to the Clarkson firm, and company financial disclosures show it has more than 18 million nationwide.

Given what is known about the PXDX program and the number of insureds that may have had claims processed using it, the lawsuit seeks class-action status on behalf of all Cigna customers who paid for insurance coverage in the last four years.

“Plaintiff and the Class members have suffered injury, in fact, and have lost money as a result of Defendants’ misconduct,” the complaint reads.

Since the initial filing in July, Danas said the firm has received an influx of correspondence from Cigna customers, including those outside of California.

“All of them are outraged, shocked, but in some cases also not shocked or surprised, because they’ve been dealing with this problem, and now it puts an explanation to what they’ve been dealing with and their frustrations,” he said.

“They are just reaching out to us by the dozen each day to talk about their different problems and what they’ve been dealing with.”

‘I was just pushed to the point of exhaustion’

Amanda Bredlow does not know if Cigna used its PXDX program to process her claims.

While she and her husband are not part of the pending lawsuit, the California attorneys say a lack of transparency on what policies and claims interact with the program has left many people similarly unsure — another reason they are bringing the case.

What Bredlow does know is that her claims were denied, and denied for reasons her doctor, insurance experts and even her state’s insurance commissioner’s office can’t make sense of.

Bredlow and her husband conceived their first child naturally, but after struggling to get pregnant again the couple decided to start looking into fertility treatments.

The insurance policy provided by Bredlow’s employer offered no coverage for such care, so the couple opted to add Amanda to her husband’s Cigna plan as her secondary insurance.

“We signed up for it and said, ‘This is great. Wow, we’ve found an answer to our problems. We have finally found an insurance policy that will help us with his infertility cost,’ which is enormous,” Bredlow said.

After experiencing a miscarriage in 2020, the couple decided to pursue more extensive fertility treatments in 2021.

The Cigna plan included up to $10,000 each for the Bredlows, the coverage documents saying the plan would pay for both diagnostic testing and treatments, such as intrauterine insemination and in-vitro fertilization.

However, Bredlow said the claims they filed for those services were denied.

“So we asked Cigna, ‘Why are we getting denied?’” she said.

At first, she was told the denials were because she had another insurance — her primary insurance through her employer — and she needed documentation from that insurer that she was not covered.

After providing a benefits document to do so and still getting denied, Bredlow said Cigna customer service informed her she needed to submit the claims to her primary insurance first, get denied and then submit the proof of those denials along with each individual claim.

She said she followed those directions and then re-submitted the claims with this new documentation, emphasizing this was what she was told by Cigna representatives she spoke with on the phone that she needed to do.

But the claims were denied once again, this time for being “duplicates” of existing claims or for exceeding the allowed number of tests and procedures for a given time period.

Each time she reached out to Cigna customer service to correct whatever issue was listed in the denial, but she said they just kept coming.

“I think I submitted the same one seven times,” she said. “I felt like they were just wearing me down.”

Bredlow said there were other instances where claims were denied based on how they were coded, despite her doctor’s office getting prior authorization and later confirming with Cigna customer service that the codes were correct.

The battle over the Bredlows’ claims went on for almost two years, with only a single claim amounting to $900 for a round of intrauterine insemination receiving coverage.

All the while, Amanda was going through the physical challenges of fertility treatment — the tests, injections, medications and procedures — and the couple was dealing with the emotional strain of failed attempts to conceive and multiple pregnancy losses.

“It was absolutely, completely frustrating because I was under doctor’s orders to reduce stress and nothing stressed me out more than being on this endless loop with Cigna where my claims kept getting denied, denied, denied,” she said.

“I was just pushed to the point of exhaustion. I was in tears every time I talked to them, I was under so much stress.”

Eventually, Bredlow said she had had enough and decided trying to fight Cigna for the coverage was a lost cause.

However, she and her husband still wanted to continue pursuing fertility treatment, so in an attempt to get at least some of the tens of thousands of dollars in care covered, Amanda took a second job.

By working the graveyard shift at a warehouse, she was able to get yet another insurance policy, which she took on as her secondary coverage and moved Cigna to a tertiary plan, meaning it would be third in line to cover claims behind the other two plans.

“So that just bumped them out of the order of operations, and then I could just say, ‘Screw you Cigna, I don’t want to deal with you anymore,’” she said.

All told, the Bredlows’ efforts to try to grow their family have cost them well over $100,000, and while she said they always expected a significant out-of-pocket cost, the nearly $20,000 they ended up paying themselves because of the claims Cigna denied is still burdensome.

“Twenty-thousand dollars is $20,000 when you think you’re going to get that covered, and you don’t,” she said.

Moreover, Bredlow said the ordeal cost her a great deal emotionally, and she also may have paid the price in time.

“When it’s something like fertility, it’s time-sensitive,” she said. “I spent two years trying to deal with Cigna and trying to get the benefits worked out, and I was putting things on hold, whereas I could have been going forward more confidently, and I feel like I missed out on some of those fertile years.”

Now 42, she said she knows her chances of giving birth to another child are increasingly slim.

“That’s sad, and I have to grieve that, and Cigna didn’t help me in that, and I thought they were going to help me,” she said. “That’s why I bought that policy. I thought they were going to help me achieve that dream of my family of four.”

Without knowing the exact inner workings of the PXDX program, or even exactly how her own claims were being processed, Bredlow said she can’t know for certain that her issue is the same as those outlined by ProPublica or in the California lawsuit, she said she and her husband are still suspicious that some kind of automatic processing or lack of human involvement led to their seemingly endless denials.

“I just felt like, why is this an endless loop? Why is this not getting anywhere? I just felt like it was going in circles and circles and circles,” she said.

Additional Legal Action

On top of the California complaint first filed in July, at least three other class-action lawsuits have been filed against Cigna in federal court over the PXDX issue:

• A case in New York was filed on behalf of a graduate student who needed jaw surgery to correct a birth defect that caused pain and difficulty eating, speaking and breathing. Prior authorization for the named plaintiff’s surgery was approved and he underwent the procedure, but his doctor determined a second operation was necessary to fully relieve his symptoms. However, the prior authorization request for the second surgery — which according to the complaint was reviewed for medical necessity by a Cigna utilization management company — was denied on the basis that the jaw reconstruction was cosmetic and not medically necessary. The complaint alleges the denial was processed “through the use of improper policies and procedures,” potentially including PXDX, and notes the reviews for medical necessity were done by an OBGYN and gastrointestinal physician, rather than a doctor experienced in skeletal abnormalities or jaw pain. While formal responses have not been filed in court, documents indicate Cigna has agreed to certify PXDX was not involved, and the plaintiff could choose to remove some of the language involving the program from the complaint. Deadlines for those actions have been set for early December and January, respectively.
• An additional case in California was filed on behalf of a woman who visited her primary care doctor over mental health concerns. Cigna allegedly denied the claim for that office visit, saying it would not cover the patient being seen for mental health concerns by her primary care physician. The complaint was filed in late August, but as of publication, no further court activity has taken place.
• A Connecticut case involving a Minnesota woman who alleged her claims for a preventative colonoscopy and endoscopy were denied because of how they were coded. That complaint was dismissed without prejudice at the request of the plaintiff before any response from Cigna was filed.

All three of the cases reference the ProPublica story about PXDX and involve similar arguments about the reported batch reviews done by Cigna medical directors.

In another case, filed in Arizona over coverage of residential mental healthcare for a minor, the complaint does not specifically reference PXDX or the ProPublica story, but it still expresses doubt about how much attention company doctors are giving to claims. According to court documents, a response to a peer-to-peer review of medical necessity was returned just five minutes after the reviewer was faxed the patient’s healthcare records. The complaint states: “[The plaintiff’s mother] was skeptical that Cigna’s reviewer would have been able to adequately study the submitted clinical materials in only five minutes time and questioned how thorough Cigna’s review was.”

In reply to InvestigateTV requests for an interview or comment, Cigna pointed to its public response to ProPublica’s reporting, claiming the story is “riddled with factual errors and gross mischaracterizations” about PXDX and its claims review process.

On a webpage dedicated to its response, Cigna states the program is a “simple process” that helps physicians get paid more quickly, is limited to 50 low-cost tests and procedures, and is a technology that has been in use for more than a decade and doesn’t utilize machine learning.

“The post-service review process works through software that matches the codes submitted by the physician with diagnosis codes that are considered medically necessary for a procedure under Cigna’s publicly posted clinical coverage policies. Claims that are denied can simply be re-submitted with an updated diagnosis code (as noted to the physician on the letter we send to them) and automatically paid; or appealed,” the webpage reads.

ProPublica, in turn, refuted the characterization of their reporting in a follow-up story highlighting how Congress had taken an interest in the issue.

Industry pushes technology as solution, but questions remain

Advocates and representatives for the health insurance industry have said greater incorporation of technology has and will continue to improve the patient and doctor experience.

For example, America’s Health Insurance Plans (AHIP), a trade group for insurers, asserts that electronic prior authorization systems streamline the process and help patients get the care they need faster.

AHIP has also publicly supported the push for greater data interoperability between healthcare facilities and insurance companies, though the group denounced the final version of federal rules requiring such programs.

A 2021 survey by Deloitte of insurance companies found the majority of respondents are actively working to modernize their technology systems, their top goals being improved customer service, and reduced risk of regulatory and compliance issues.

Another survey, done by technology research firm Gartner earlier this year, found more than half of insurance companies queried planned to increase their investment in technology, with most focused on upgrading their programs and with the stated purpose of improving customer experience.

However, as Steve Jobs once remarked, “Tools are just tools. They either work, or they don’t work,” — and when it comes to health insurance claims, not working or human error in the use of those tools can have expensive consequences.

For example, because of a coding error made when Blue Cross California updated its benefits for certain plans in 2015, claims for office visits were incorrectly applied to nearly 6,000 policyholders’ deductibles for the next five years.

According to California Department of Managed Healthcare records, the company only realized the issue in 2020 after a policyholder contacted the state.

An audit done by the plan determined 59,443 claims totaling $8,558,138.88 were incorrectly processed, and the company reimbursed the policyholders that amount plus 10% in interest and implemented corrective action.

That audit also uncovered that a system’s upgrade in 2019 that was “intended to improve provider payment processes by consolidating payments into fewer remittances” resulted in over two million paper explanation of benefits (EOB) documents not being mailed to more than 360,000 policyholders. The plan also found that around 360 additional major-risk policyholders didn’t receive EOBs because the computer setting was “manually turned off.”

In 2022, the state fined the company $750,000 for the claims issue and $360,000 for the EOB issue for violations of state law.

InvestigateTV reached out to Blue Cross California but as of publication has not received a response.

Additionally, there are many in the healthcare space who harbor concerns about further reliance on technology — especially when it comes to the use of emerging technologies such as artificial intelligence.

The American Medical Association (AMA) goes as far as to rename the advanced machine learning as “augmented intelligence” to emphasize that technology should assist human decision-making, not replace it.

The AMA has expressed particular concern on the use of AI when it comes to prior authorization. While the group concedes the technology could help reduce the burden on physicians, they want greater oversight of the practice to make sure medical-necessity decisions are based on sound clinical research and not based on incentivizing denials.

They also want to make sure it is required that a human review denials.

Back in her Kirkland, Washington home, Amanda Bredlow said to her, humanity is the key — a key she said based on her experience is already missing.

“It just doesn’t feel human. It doesn’t feel like a human approach,” she said. “It feels like an automated response to a human problem. And it just doesn’t feel like a way of doing business with integrity.”

Editor’s Note: This story was updated on Dec. 1, 2023 with the latest status of the California lawsuit. The case docket is available through CourtListener here.

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