Cigna Corporation and Cigna Health and Life Insurance Company was sued in the United States District Court for the Eastern District of California in 2023 following a ProPublica report that it relied on the PxDx algorithms to reject patients’ claims without Cigna doctors opening their files. The report went on to claim that “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. The company has reported it covers or administers health care plans for 18 million people.”

Plaintiffs Suzanne Kisting-Leung, Samantha Dababneh, Randall Rentsch, Christina Thornhill, Amanda Bredlow, and Abdulhussein Abbas filed a putative class action on July 24, 2023 against defendants Cigna Corporation and Cigna Health and Life Insurance Company for purported wrongful denial of plaintiffs’ claims for benefits and for defendants’ use of the automated PxDx algorithm to review plaintiffs’ claims.

Their third amended complaint alleges that plaintiffs had benefit claims wrongfully denied by defendants as not medically necessary. And that “Cigna’s policies falsely claim that determinations related to medical necessity of health care services would be made by a medical director, when in reality the medical directors are not involved in reviewing patients’ claims.” Each of plaintiffs’ claims for benefits were in fact reviewed and denied by defendants’ PxDx algorithm.

And they alleged that “Cigna developed an algorithm known as PXDX that it relies on to enable its doctors to automatically deny payments in batches of hundreds or thousands at a time for treatments that do not match certain pre-set criteria[.]” (Id. at ¶ 2.) “Relying on the PXDX system, Cigna’s doctors instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills.”

Defendants filed a motion to dismiss plaintiffs’ Third Amended Complaint. U.S. District Judge Dale Drozd granted Ciga’s motion in part and denied its motion in part on March 31, 2025, and allowed plaintiffs to amend their complaint with respect to the aspects of the case where the motion was granted if they so choose within 21 days.

With respect to the causes of action that survived the motion, plaintiffs alleged that under the California Unfair Competition Law’s (UCL) unlawful prong that defendants’ use of PxDx violated California Health & Safety Code § 1367.01(e). This provision states: “No individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity.”

The court found that plaintiffs have adequately plead a violation of the UCL.

However the court said it “agrees with defendants that where the plaintiff’s state law claim seeks recovery for the loss of insurance benefits, the claim is expressly preempted by ERISA.” However Plaintiffs argue “that the savings clause applies.” The savings clause protects from express preemption “any law of any State which regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A).

California Health & Safety Code § 1367.01(e) is specifically directed toward entities engaged in insurance because it applies to certain “health care service plan[s] and any entity with which it contracts for services[,]” California Health & Safety Code § 1367.01(a), and restricts how medical necessity determinations are made, California Health & Safety Code § 1367.01(e).

The court concluded that the savings clause applies, and plaintiffs’ California Unfair Competition Law claim is not expressly preempted.

Cigna Faces Class Action for Use of PxDx Algorithm to Deny Claims