“We thought it might fall into a legal gray zone,” said the former Cigna official, who helped conceive the program. “We sent the idea to legal, and they sent it back saying it was OK.”
Cigna adopted its review system more than a decade ago, but insurance executives say similar systems have existed in various forms throughout the industry.
In a written response, Cigna said the reporting by ProPublica and The Capitol Forum was “biased and incomplete.”
Cigna said its review system was created to “accelerate payment of claims for certain routine screenings,” Cigna wrote. “This allows us to automatically approve claims when they are submitted with correct diagnosis codes.”
When asked if its review process, known as PXDX, lets Cigna doctors reject claims without examining them, the company said that description was “incorrect.” It repeatedly declined to answer further questions or provide additional details. (ProPublica employees’ health insurance is provided by Cigna.)
Former Cigna doctors confirmed that the review system was used to quickly reject claims. An internal corporate spreadsheet, viewed by the news organizations, lists names of Cigna’s medical directors and the number of cases each handled in a column headlined “PxDx.” The former doctors said the figures represent total denials. Cigna did not respond to detailed questions about the numbers.
Cigna's explanation that its review system was designed to approve claims didn’t make sense to one former company executive. “They were paying all these claims before. Then they weren’t,” said Ron Howrigon, who now runs a company that helps private doctors in disputes with insurance companies. “You’re talking about a system built to deny claims.”
Cigna emphasized that its system does not prevent a patient from receiving care — it only decides when the insurer won’t pay. “Reviews occur after the service has been provided to the patient and does not result in any denials of care,” the statement said.
"Our company is committed to improving health outcomes, driving value for our clients and customers, and supporting our team of highly-skilled Medical Directors,” the company said.
Cigna’s review system was developed more than a decade ago by a former pediatrician.
After leaving his practice, Dr. Alan Muney spent the next several decades advising insurers and private equity firms on how to wring savings out of health plans.
In 2010, Muney was managing health insurance for companies owned by Blackstone, the private equity firm, when Cigna tapped him to help spot savings in its operation, he said.
Insurers have wide authority to reject claims for care, but processing those denials can cost a few hundred dollars each, former executives said. Typically, claims are entered into the insurance system, screened by a nurse and reviewed by a medical director.
For lower-dollar claims, it was cheaper for Cigna to simply pay the bill, Muney said.
“They don’t want to spend money to review a whole bunch of stuff that costs more to review than it does to just pay for it,” Muney said.
Muney and his team had solved the problem once before. At UnitedHealthcare, where Muney was an executive, he said his group built a similar system to let its doctors quickly deny claims in bulk.
In response to questions, UnitedHealthcare said it uses technology that allows it to make “fast, efficient and streamlined coverage decisions based on members benefit plans and clinical criteria in compliance with state and federal laws.” The company did not directly address whether it uses a system similar to Cigna.
At Cigna, Muney and his team created a list of tests and procedures approved for use with certain illnesses. The system would automatically turn down payment for a treatment that didn’t match one of the conditions on the list. Denials were then sent to medical directors, who would reject these claims with no review of the patient file.
Cigna eventually designated the list “PXDX” — corporate shorthand for procedure-to-diagnosis. The list saved money in two ways. It allowed Cigna to begin turning down claims that it had once paid. And it made it cheaper to turn down claims, because the company’s doctors never had to open a file or conduct any in-depth review. They simply denied the claims in bulk with an electronic signature.
“The PXDX stuff is not reviewed by a doc or nurse or anything like that,” Muney said.
The review system was designed to prevent claims for care that Cigna considered unneeded or even harmful to the patient, Muney said. The policy simply allowed Cigna to cheaply identify claims that it had a right to deny.
Regards,
350 for a Vit D test is about 5 times the normal cost and I agree for that insurance should not have to pay.