What's Happening?
In March 2025, the United States District Court for the Eastern District of California allowed a class action lawsuit to proceed against Cigna Corporation. The lawsuit challenges the company's use of its AI algorithmic claims tool, 'PxDx,' which allegedly denied certain claims without proper review by a licensed physician. This action is claimed to violate ERISA fiduciary duties and California Health & Safety Code Section 1367.01(e), which mandates that medical necessity determinations be made by qualified healthcare providers. Despite Cigna's defense that its process adhered to governing plan terms, the court found the plaintiffs had plausibly alleged unlawful delegation of decision-making to an opaque AI system, thus permitting the case to advance.
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Why It's Important?
This case highlights the growing scrutiny of AI systems in healthcare, particularly concerning their role in decision-making processes that affect patient care. The outcome of this lawsuit could set a precedent for how AI tools are regulated and used in the healthcare industry, potentially impacting how companies integrate AI into their operations. If the plaintiffs succeed, it may lead to stricter regulations and oversight of AI systems, ensuring that human oversight remains a critical component in healthcare decisions. This could affect insurance companies, healthcare providers, and tech developers involved in creating AI solutions for medical use.
What's Next?
As the case progresses, stakeholders in the healthcare and AI industries will likely monitor developments closely. The court's decision could prompt other companies to reevaluate their use of AI in decision-making processes to avoid similar legal challenges. Additionally, regulatory bodies may consider implementing more stringent guidelines for AI use in healthcare, ensuring compliance with existing laws and safeguarding patient rights.
