The dark side of algorithms: Denying bulk health insurance claims

Table of Contents:

1. Introduction
2. The Issue of Denied Claims
3. Cigna's Use of AI in Claims Assessment
4. How the System Works
5. The Role of Medical Directors
6. The Speed of Claim Denials
7. The Automated Progress and Complex Reviews
8. Outcomes for Patients
9. Types of Treatments Routinely Denied
10. The Appeal Process
11. Prevalence of Automated Systems in Health Insurance
12. The Debate on AI and its Hazards
13. Conclusion

Cigna's Use of AI in Assessing and Denying Health Insurance Claims

Introduction

In the realm of health insurance, the denial of claims has become a prevalent issue for customers. With millions of claims being denied every year, customers often face the daunting task of appealing these denials. In this article, we will Delve into the use of artificial intelligence (AI) by one major insurance company, Cigna, to assess and frequently deny claims. We will explore how the system operates, the role of medical directors, the speed at which denials occur, the outcomes for patients, and the types of treatments that are routinely denied. Additionally, we will discuss the appeal process, the prevalence of automated systems in the health insurance industry, and the ongoing debate about the utility and hazards of AI.

The Issue of Denied Claims

When it comes to health insurance, the denial of claims is a frustrating experience for customers. Federal data has revealed that insurance companies issued a staggering 49 million denials in 2021 alone. However, the number of appeals filed by customers was a mere 0.2%. While some denials come with specific explanations, many of them are vague, leaving customers in the dark about why their claims were denied.

Cigna's Use of AI in Claims Assessment

Investigative journalist at ProPublica, Ryan Miller, unearthed Cigna's use of an automated system to Instantly reject claims on medical grounds without even opening the customer file. This technology, known as "PxDx," allows Cigna to quickly assess claims and gives medical directors more time to focus on complex reviews. However, concerns have been raised about the potential cost-cutting motive behind the system's use and its impact on patient coverage.

How the System Works

When a customer visits a doctor or healthcare provider, the claim is submitted to their health insurance plan. The claim includes the diagnosis and proposed tests or procedures. Cigna developed a computer code algorithm that determines whether a claim should be approved or sent to a medical director for review. If the diagnosis does not Align with the conditions set by Cigna, the claim is quickly rejected. Astonishingly, this process can take less than two seconds, with medical directors signing off on the denial of up to 50 claims at a time.

The Role of Medical Directors

Cigna's medical directors play a crucial role in the denial of claims. These directors, who are company doctors, evaluate claims that do not meet Cigna's criteria. They have the power to swiftly reject claims, often asserting that they are not medically necessary. This expedited process allows Cigna to handle a large volume of claims quickly but raises concerns about the thoroughness of the review process.

The Speed of Claim Denials

Cigna's use of AI technology enables the company to process claims at an incredibly rapid pace. However, this speed comes at a cost. By rejecting claims without thorough consideration, there is a risk of denying coverage to patients who genuinely require medical treatments. While Cigna argues that the system's efficiency helps medical directors focus on more complex reviews, it raises ethical questions about the balance between speed and accurate decision-making.

The Automated Progress and Complex Reviews

Cigna defends the use of its automated progress system, emphasizing that it allows for quick approvals and grants medical directors more time to devote to complex reviews. While it is true that claims matching specific diagnoses and treatments are automatically approved, there is a significant number of claims that are automatically denied. Last year alone, over 300,000 claims were found to be denied by the system. This raises concerns about the transparency and fairness of the automated process.

Outcomes for Patients

Cigna claims that even if a claim is denied, it should not result in out-of-pocket costs for patients who use in-network providers. However, the reality often differs from this assertion. Patients often end up bearing significant financial responsibility for denied claims, as they are asked to sign forms accepting financial responsibility for the treatment upfront. This places a considerable burden on patients, undermining the supposed protection against out-of-pocket costs.

Types of Treatments Routinely Denied

While a comprehensive list of treatments denied by Cigna's automated system is unavailable, there are examples of common treatments that fall under this category. Vitamin D testing and autonomic nervous system testing, which helps detect nerve damage in patients with diabetes or other autoimmune diseases, are some procedures labeled as part of the system. The lack of transparency regarding the entire list of denied treatments raises concerns about appropriate coverage for necessary medical procedures.

The Appeal Process

Health insurance companies often tout the appeal process as a way for customers to challenge denied claims. However, statistics Show that only a small fraction of denied claims are formally appealed. A study found that only 0.1% of people who experience denials actually go through the process. The complexity and time-consuming nature of the appeal process make it a daunting task for many individuals, especially those already dealing with illness or chronic diseases.

Prevalence of Automated Systems in Health Insurance

Cigna is not the only insurer using AI-driven automated systems for claims processing. Insurance companies handle an immense volume of claims, and AI technology offers efficiency and speed. While the prevalence of such systems across the entire industry is not fully established, it is apparent that insurance companies are increasingly relying on algorithms and computer programs to expedite claims processing. The impact and extent of this technology on the overall health insurance landscape require further investigation.

The Debate on AI and its Hazards

The use of AI in health insurance claims assessment is part of a broader debate surrounding the utility and hazards of artificial intelligence. Regulators and experts are examining the risks associated with automated systems, including concerns about fair and thorough claims evaluation. Questions are being posed regarding the ability of medical directors to consistently review claims in under two seconds, and the objectivity of the process. Finding the right balance between efficiency, accuracy, and patient protection is a critical consideration for policymakers and regulators.

Conclusion

The use of AI in health insurance claims assessment, as exemplified by Cigna's automated system, presents both benefits and concerns. While it allows for efficient claims processing and focuses medical directors' Attention on complex cases, there are implications for patient coverage, transparency, and fairness. As the debate about AI's role in the health system continues, policymakers and regulators must carefully assess the impact of these automated systems on patients' rights and the overall healthcare landscape.

Highlights:

• Health insurance companies issue 49 million denials in '21, with a 0.2% appeal rate.
• Cigna uses AI to instantly reject claims without opening customer files.
• Medical directors quickly sign off on bulk denials, asserting lack of medical necessity.
• Cigna claims that denials do not result in out-of-pocket costs for patients.
• Automated systems like Cigna's are prevalent in the health insurance industry.
• Concerns arise about transparency, fairness, and accurate claims evaluation.
• The appeal process is complex and rarely utilized by patients.
• Cigna's automated system denies a wide range of treatments, such as vitamin D and nerve testing.
• The use of AI in health insurance raises debates about efficiency and hazards.
• Policymakers and regulators must weigh the balance between efficiency, accuracy, and patient rights.

FAQs:

Q: What is the appeal rate for denied health insurance claims? A: The appeal rate for denied claims is extremely low, with only 0.2% of customers appealing their rejections.

Q: Does Cigna's automated system lead to out-of-pocket costs for patients? A: Cigna claims that denials should not result in out-of-pocket costs for patients who use in-network providers. However, the reality often differs, and patients may still be held financially responsible.

Q: What treatments are routinely denied by Cigna's automated system? A: While a comprehensive list is unavailable, examples of routinely denied treatments include vitamin D testing and autonomic nervous system testing for nerve damage.

Q: How prevalent are automated systems in the health insurance industry? A: Automated systems like Cigna's are prevalent across the health insurance industry, as companies seek efficiency and speed in claims processing.

Q: What are the hazards associated with using AI in claims assessment? A: The hazards of using AI in claims assessment include concerns about fair evaluation, lack of transparency, and the risk of denying necessary medical treatments.