[Its Doctors Reject Claims Without Reading Them ]
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HOW CIGNA SAVES MILLIONS  
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Patrick Rucker, Maya Miller and David Armstrong
March 25, 2023
ProPublica
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_ Its Doctors Reject Claims Without Reading Them _

, Cigna

 

When a stubborn pain in Nick van Terheyden’s bones would not
subside, his doctor had a hunch what was wrong.

Without enough vitamin D in the blood, the body will pull that vital
nutrient from the bones. Left untreated, a vitamin D deficiency can
lead to osteoporosis.

A blood test in the fall of 2021 confirmed the doctor’s diagnosis,
and van Terheyden expected his company’s insurance plan, managed by
Cigna, to cover the cost of the bloodwork. Instead, Cigna sent van
Terheyden a letter explaining that it would not pay for the $350 test
because it was not “medically necessary.”

The letter was signed by one of Cigna’s medical directors, a doctor
employed by the company to review insurance claims.

Something about the denial letter did not sit well with van Terheyden,
a 58-year-old Maryland resident. “This was a clinical decision being
second-guessed by someone with no knowledge of me,” said van
Terheyden, a physician himself and a specialist who had worked in
emergency care in the United Kingdom.

The vague wording made van Terheyden suspect that Dr. Cheryl Dopke,
the medical director who signed it, had not taken much care with his
case.

Van Terheyden was right to be suspicious. His claim was just one of
roughly 60,000 that Dopke denied in a single month last year,
according to internal Cigna records reviewed by ProPublica and The
Capitol Forum.

The rejection of van Terheyden’s claim was typical for Cigna, one of
the country’s largest insurers. The company has built a system that
allows its doctors to instantly reject a claim on medical grounds
without opening the patient file, leaving people with unexpected
bills, according to corporate documents and interviews with former
Cigna officials. Over a period of two months last year, Cigna doctors
denied over 300,000 requests for payments using this method, spending
an average of 1.2 seconds on each case, the documents show. The
company has reported it covers or administers health care plans for 18
million people
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Before health insurers reject claims for medical reasons, company
doctors must review them, according to insurance laws and regulations
in many states. Medical directors are expected to examine patient
records, review coverage policies and use their expertise to decide
whether to approve or deny claims, regulators said. This process helps
avoid unfair denials.

But the Cigna review system that blocked van Terheyden’s claim
bypasses those steps. Medical directors do not see any patient records
or put their medical judgment to use, said former company employees
familiar with the system. Instead, a computer does the work. A Cigna
algorithm flags mismatches between diagnoses and what the company
considers acceptable tests and procedures for those ailments. Company
doctors then sign off on the denials in batches, according to
interviews with former employees who spoke on condition of anonymity.

“We literally click and submit,” one former Cigna doctor said.
“It takes all of 10 seconds to do 50 at a time.”

Not all claims are processed through this review system. For those
that are, it is unclear how many are approved and how many are
funneled to doctors for automatic denial.

Insurance experts questioned Cigna’s review system.

Patients expect insurers to treat them fairly and meaningfully review
each claim, said Dave Jones, California’s former insurance
commissioner. Under California regulations
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insurers must consider patient claims using a “thorough, fair and
objective investigation.”

“It’s hard to imagine that spending only seconds to review medical
records complies with the California law,” said Jones. “At a
minimum, I believe it warrants an investigation.”

Within Cigna, some executives questioned whether rendering such speedy
denials satisfied the law, according to one former executive who spoke
on condition of anonymity because he still works with insurers.

“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.

PXDX

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.

Muney said that it would be an “administrative hassle” to require
company doctors to manually review each claim rejection. And it would
mean hiring many more medical directors.

“That adds administrative expense to medicine,” he said. “It’s
not efficient.”

But two former Cigna doctors, who did not want to be identified by
name for fear of breaking confidentiality agreements with Cigna, said
the system was unfair to patients. They said the claims automatically
routed for denial lacked such basic information as race and gender.

“It was very frustrating,” one doctor said.

Some state regulators questioned Cigna’s PXDX system.

In Maryland, where van Terheyden lives, state insurance officials said
the PXDX system as described by a reporter raises “some red
flags.”

The state’s law regulating group health plans purchased by employers
requires that insurance company doctors be objective and flexible when
they sit down to evaluate each case.

If Cigna medical directors are “truly rubber-stamping the output of
the matching software without any additional review, it would be
difficult for the medical director to comply with these
requirements,” the Maryland Insurance Administration wrote in
response to questions.

Medicare and Medicaid have a system that automatically prevents
improper payment of claims that are wrongly coded. It does not reject
payment on medical
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Within the world of private insurance, Muney is certain that the PXDX
formula has boosted the corporate bottom line. “It has undoubtedly
saved billions of dollars,” he said.

Insurers benefit from the savings, but everyone stands to gain when
health care costs are lowered and unneeded care is denied, he said.

Speedy Reviews

Cigna carefully tracks how many patient claims its medical directors
handle each month. Twelve times a year, medical directors receive a
scorecard in the form of a spreadsheet that shows just how fast they
have cleared PXDX cases.

Dopke, the doctor who turned down van Terheyden, rejected 121,000
claims in the first two months of 2022, according to the scorecard.

Van Terheyden’s denial letter from Cigna Credit: highlights and
redactions added by ProPublica

Dr. Richard Capek, another Cigna medical director, handled more than
80,000 instant denials in the same time span, the spreadsheet showed.

Dr. Paul Rossi has been a medical director at Cigna for over 30 years.
Early last year, the physician denied more than 63,000 PXDX claims in
two months.

Rossi, Dopke and Capek did not respond to attempts to contact them.

Howrigon, the former Cigna executive, said that although he was not
involved in developing PXDX, he can understand the economics behind
it.

“Put yourself in the shoes of the insurer,” Howrigon said. “Why
not just deny them all and see which ones come back on appeal? From a
cost perspective, it makes sense.”

Cigna knows that many patients will pay such bills rather than deal
with the hassle of appealing a rejection, according to Howrigon and
other former employees of the company. The PXDX list is focused on
tests and treatments that typically cost a few hundred dollars each,
said former Cigna employees.

“Insurers are very good at knowing when they can deny a claim and
patients will grumble but still write a check,” Howrigon said.

Muney and other former Cigna executives emphasized that the PXDX
system does leave room for the patient and their doctor to appeal a
medical director’s decision to deny a claim.

But Cigna does not expect many appeals. In one corporate document,
Cigna estimated that only 5% of people would appeal a denial resulting
from a PXDX review.

“A Negative Customer Experience”

In 2014, Cigna considered adding a new procedure to the PXDX list to
be flagged for automatic denials.

Autonomic nervous system testing can help tell if an ailing patient is
suffering from nerve damage caused by diabetes or a variety of
autoimmune diseases. It’s not a very involved procedure — taking
about an hour — and it costs a few hundred dollars per test.

The test is versatile and noninvasive, requiring no needles. The
patient goes through a handful of checks of heart rate, sweat
response, equilibrium and other basic body functions.

At the time, Cigna was paying for every claim for the nerve test
without bothering to look at the patient file, according to a
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presentation
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Cigna officials were weighing the cost and benefits of adding the
procedure to the list. “What is happening now?” the presentation
asked. “Pay for all conditions without review.”

By adding the nerve test to the PXDX list, Cigna officials estimated,
the insurer would turn down more than 17,800 claims a year that it had
once covered. It would pay for the test for certain conditions, but
deny payment for others.

These denials would “create a negative customer experience” and a
“potential for increased out of pocket costs," the company
presentation acknowledged.

But they would save roughly $2.4 million a year in medical costs, the
presentation said.

Cigna added the test to the list.

“It’s Not Good Medicine”

By the time van Terheyden received his first denial notice from Cigna
early last year, he had some answers about his diagnosis. The blood
test that Cigna had deemed “not medically necessary” had confirmed
a vitamin D deficiency. His doctor had been right, and recommended
supplements to boost van Terheyden’s vitamin level.

Still, van Terheyden kept pushing his appeal with Cigna in a process
that grew more baffling. First, a different Cigna doctor reviewed the
case and stood by the original denial. The blood test was unnecessary,
Cigna insisted, because van Terheyden had never before been found to
lack sufficient vitamin D.

“Records did not show you had a previously documented Vitamin D
deficiency,” stated a denial letter issued by Cigna in April. How
was van Terheyden supposed to document a vitamin D deficiency without
a test? The letter was signed by a Cigna medical director named Barry
Brenner.

Brenner did not respond to requests for comment.

Then, as allowed by his plan, van Terheyden took Cigna’s rejection
to an external review by an independent reviewer.

In late June — seven months after the blood test — an outside
doctor not working for Cigna reviewed van Terheyden’s medical record
and determined the test was justified.

The blood test in question “confirms the diagnosis of Vit-D
deficiency,” read the report from MCMC, a company that provides
independent medical reviews. Cigna eventually paid van Terheyden’s
bill. “This patient is at risk of bone fracture without proper
supplementations,” MCMC’s reviewer wrote. “Testing was medically
necessary and appropriate.”

Van Terheyden had known nothing about the vagaries of the PXDX denial
system before he received the $350 bill. But he did sense that very
few patients pushed as hard as he had done in his appeals.

As a physician, van Terheyden said, he’s dumbfounded by the
company’s policies.

“It’s not good medicine. It’s not caring for patients. You end
up asking yourself: Why would they do this if their ultimate goal is
to care for the patient?” he said.

“Intellectually, I can understand it. As a physician, I can’t. To
me, it feels wrong.”

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