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Congressional Committee, Regulators Question Cigna System That Lets Its Doctors Deny Claims Without Reading Patient Files
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Update, May 16, 2023: This story was updated with a statement that Cigna provided after publication.
A key congressional committee asked insurance giant Cigna on Tuesday to provide corporate documents so that lawmakers can examine the company’s practice of denying health care claims without ever opening a patient file.
The House Committee on Energy and Commerce joined several state and federal regulators in scrutinizing the legality of Cigna rejecting the payment of certain claims using a system known as PXDX.
Rep. Cathy McMorris Rodgers, a Republican from Washington who chairs the committee, noted that policyholders under Cigna’s Medicare Advantage plans appeal about one in five denials for requests for medical procedures, known as prior authorizations. Of those denials, about 80% are overturned.
“If these figures are at all illustrative of Cigna’s commercial appeal and reversal rates, it would suggest that the PXDX review process is leading to policyholders paying out-of-pocket for medical care that should be covered under their health insurance contract,” Rodgers wrote in a letter to Cigna.
The letter follows an investigation by ProPublica and The Capitol Forum that found Cigna doctors blocked payment for certain tests and procedures by automatically labeling them “not medically necessary.” In two months last year, Cigna doctors refused to pay for 300,000 claims using the PXDX system, spending an average of 1.2 seconds on each case, according to internal spreadsheets that tracked how fast they worked.
A Cigna spokesperson on Tuesday said that the company welcomes “the opportunity to fully explain our PxDx process to regulators and correct the many mischaracterizations and misleading perceptions ProPublica’s article created.”
After publication, Cigna provided four examples of what it called “mischaracterized information” and “omitted facts.”
Cigna said ProPublica had wrongly described the company’s rejections of claims as a denial of care. The story does not say that and quotes Cigna saying the denials were for payments of care.
The statement said ProPublica reported that doctors were incentivized to deny care. The story does not say that, either.
Cigna also said ProPublica’s story “creates the impression” that the company saved “billions of dollars” using denials to boost its bottom line. It said any savings were passed on to clients. ProPublica quoted an expert who developed PXDX as saying the system had saved that much money. Cigna has not provided evidence of its savings or how much was passed on to clients.
Finally, the company said the ProPublica story left the impression that Cigna uses the PXDX process on all health care claims. The story explicitly stated that “not all claims are processed through this review system.”
In the past, Cigna has said the PXDX system was built to process claims more quickly.
But state insurance commissioners contacted in recent weeks criticized Cigna, with several saying that they wanted to more closely examine the company’s use of algorithms to deny claims.
Mike Kreidler, the insurance commissioner for Washington, said it is an “abhorrent” practice “to routinely deny just to enhance the bottom line.”
Kreidler said he and other state insurance regulators are reviewing their records for customer complaints that seem to describe an auto-denial process.
“I’m afraid it might be the tip of the iceberg,” he said. “We darn well better start paying attention to it.”
Industry sources there told the news organizations that other large insurers operate similar systems.
The investigation by ProPublica and The Capitol Forum has also raised red flags in California.
The California Department of Insurance said in a statement that it is “looking closely at health insurance companies’ handling of claims, while simultaneously exploring all options in coordination with other state regulators.”
Other state insurance commissions said they, too, were interested in a deeper examination of Cigna’s practices.
“Given your article, this will likely warrant a closer look,” said a spokesperson for the Delaware Department of Insurance.
The U.S. Department of Labor regulates a common kind of insurance held by many Americans: plans sponsored by employers that cover their own health care costs. Federal officials said they were alarmed by the auto-deny practices.
“This is very concerning,” said one senior Labor Department official who asked to remain anonymous in order to speak on a sensitive matter. “I don’t see a scenario where we’re not taking a hard look at these kinds of practices.”
Two organizations accredit health insurers to make sure plans are abiding by certain standards. Both of these groups, the Utilization Review Accreditation Commission and the National Committee for Quality Assurance, have opened investigations into the denials system. They did not immediately respond to detailed questions about the investigations.
The letter from the energy and commerce committee asked for the company to hand over “copies of all memoranda analyzing the legality of the PXDX review process.”
The records requested include details about the number of claims denied using PXDX, the number denied by individual medical directors employed by the insurer and details on how often those decisions were appealed and overturned.
Do You Have Insights Into Health Insurance Denials? Help Us Report on the System.
Clarification, May 16, 2023: This story was updated to make clear that the PXDX system was used to deny 300,000 claims in two months last year.
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Minnesota Board of Nursing Executive Director Steps Down Amid Accusations of Mismanagement
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Update, May 18, 2023: The Minnesota Board of Nursing on Thursday accepted the resignation of its executive director, whom it had placed on leave earlier this week for an unspecified “personnel issue.” The action came during an emergency meeting to consider firing Kimberly Miller, who had led the agency since August 2021. In a letter to the board, Miller said she had worked diligently and the agency had made gains under her leadership. She said the pandemic and the board’s transition to computers had caused problems but that the board’s performance was improving. She said she could not address allegations in the media about a toxic work environment or the slow pace of investigations because she had “not received notification of the specific allegations or been asked to participate in an investigation.” Board member Sarah Simons said that after ProPublica reported on Miller, the office of Minnesota Management and Budget, the state’s human resources arm, conducted an investigation into the dysfunctional workplace issues raised in the story and presented findings to the nursing board, which led to the effort to remove Miller.
The Minnesota Board of Nursing has called an emergency meeting to consider removing its beleaguered executive director over an unspecified “personnel issue.”
In an email to board staff Tuesday morning, President Laura Elseth said Executive Director Kimberly Miller was on leave “effective today.”
The move comes at a critical time for the nursing board. It’s been mired in a backlog of complaints against nurses, with some inside the agency blaming Miller for dysfunction in the work environment, according to a ProPublica investigation published in April.
That story detailed how the board’s slow disciplinary process puts the public in harm’s way. The time to resolve complaints had risen to 11 months, on average, and hundreds of cases remained open as of March. As a result, nurses who are accused of serious misconduct are allowed to keep treating patients.
The meeting to determine Miller’s future, scheduled for Thursday, was announced one day after board members, lawyers from the state attorney general’s office and representatives from Minnesota Management and Budget, the state’s human resources arm, gathered in an emergency meeting that was closed to the public. The purpose was “preliminary consideration of allegations against” Miller, according to Elseth.
Management and Budget confirmed last month that the agency had received complaints about Miller and was reviewing them. Additional details about the investigation are not public because they are related to a “personnel issue,” spokesperson Patrick Hogan said.
Current and former staff members and a former board member told ProPublica that Miller’s poor leadership was among the reasons for the backlog and for turnover among the board’s staff. David Jiang, a former board member, wrote in his resignation letter to Gov. Tim Walz that Miller had created a culture among staff that was “strained” if not “dysfunctional.”
William Hager, a former legal analyst for the board, raised concerns about Miller’s capabilities in a 2022 email to another staff member. “I am very concerned the Director seems to have been unaware of this ‘backlog,’” he wrote. Although the board’s backlog started increasing before Miller became executive director in August 2021, it has grown during her tenure.
In a previous interview with ProPublica, Miller acknowledged the backlog and said the board was working to “right the boat,” though she did not respond to questions about complaints surrounding her job performance.
Miller and 11 board members who attended the meeting on Monday did not respond to requests for comment.
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Jeremy Kohler contributed reporting.