Health Insurers Face Scrutiny Over Algorithmic Claim Denials, High Reversal Rates on Appeal
Health insurance companies, including Cigna and UnitedHealthcare, are facing federal litigation and increased scrutiny over their use of algorithms to deny patient claims. These automated systems, such as Cigna's PXDX and UnitedHealthcare's nH Predict, process hundreds of thousands of claims in seconds, often with minimal human review. For instance, Cigna's PXDX system reportedly denied over 300,000 claims in two months in 2022, with doctors signing off on batches of denials in as little as 1.2 seconds per claim. UnitedHealthcare's nH Predict tool estimates the length of post-hospital care, and a proposed class action alleges it overrides physician recommendations. A significant finding is that over 90% of denials tied to nH Predict are reversed upon appeal, yet only about 0.2% of affected Medicare Advantage enrollees actually file an appeal. This indicates a system where errors are frequently overturned when challenged, but most patients do not contest the initial denial.
