Henry Noye Discusses a Lawsuit against Cigna and its Automation of Coverage Decisions in Modern Healthcare

July 25, 2023

Henry Noye, a partner, and member of Obermayer’s Catastrophic Loss Group was quoted in Modern Healthcare on July 25, 2023, in connection with the first-ever suit over claims-denying algorithm allegations. Two Cigna members filed a lawsuit seeking class-action status in a California federal court, alleging the health insurance company leveraged an algorithm to improperly deny claims and systematically shift costs to its 2.1 million Golden State members. Lawyers anticipate more insurers will be hit with similar complaints as carriers increasingly automate their claims management processes.

The two Cigna members are seeking monetary damages and an injunction for the health insurance company to stop using PXDX in claims management.

By calling into question insurers’ alleged automation of coverage decisions, this lawsuit represents a new take on the classic dispute between patients and health insurers over whether their claim was wrongfully denied, said Henry Noye. He also believes that insurers would face more lawsuits over their alleged use of automation tools and have likely done the math and decided to continue developing the technology anyway. That suggests insurers believe the potential savings on labor costs, and the increased accuracy and speed in clinical decision-making, outweigh their potential legal risk, Henry said.

“This is a new frontier, all this stuff is so novel,” he said. “Companies are going to get sued, and I just think that’s sort of the cost of doing business.”

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