How Insurance Companies Save Millions in Denying Care

3/23/23 Propublica: How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them

A few excerpts:

  • Cigna, one of the country’s largest insurers…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…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. 
  • Before health insurers reject claims for medical reasons, company doctors must review them, according to insurance laws and regulations in many states…This process helps avoid unfair denials…Cigna adopted its review system more than a decade ago, but insurance executives say similar systems have existed in various forms throughout the industry…At UnitedHealthcare….built a similar system to let its doctors quickly deny claims in bulk.
  • 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.
  • Cigna knows that many patients will pay such bills rather than deal with the hassle of appealing a rejection [for lower cost denials]…In one corporate document, Cigna estimated that only 5% of people would appeal a denial resulting from a PXDX review.

My take: It is a hassle to appeal denials. It is not surprising to me to hear about this reporting; it confirms the fact that insurance companies are focused primarily on cost and not patient care.

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