Wednesday, October 8, 2025
DMHC fines Cigna $500,000 for improperly reviewing and denying health care claims payments
SACRAMENTO - The California Department of Managed Health Care (DMHC) fined Cigna HealthCare of California, Inc. (Cigna) $500,000 for improperly reviewing and denying health care claims payments submitted by providers as not medically necessary. The Department found Cigna reviewed and denied claims without physicians conducting clinical reviews of the claims prior to issuing denials. In addition, the plan used a different review process than the policy it filed with the DMHC, which is a violation of the law. Cigna will pay the fine, re-review the denied claims where the non-compliant review process was used and implement corrective actions to revise its health care claims payment review process.
“The stability of the health care delivery system is impacted when health plans wrongly deny the payment of claims for health care services,” said DMHC Director Mary Watanabe. “The DMHC enforces the law, and health plans are required to have licensed medical experts review claims prior to denying a claim based on a lack of medical necessity. If a claim is denied, providers have the right to file an appeal with the plan, and if they can’t reach an agreement, submit a complaint to the DMHC.”
PROTECTIONS FOR PROVIDERS: To ensure the health care delivery system can continue to provide services to health plan members, it is important doctors, hospitals and other providers receive accurate payments from health plans. California law requires health plans have a Provider Dispute Resolution (PDR) process where providers can submit a dispute related to claims payment.
WHAT PROVIDERS CAN DO: Health care providers looking for more information or to dispute a payment with a health plan can visit the Provider Complaint page on the DMHC’s website.
BACKGROUND: The DMHC’s investigation focused on Cigna’s handling of health care claims payments submitted by providers after medical services and/or treatment had been provided to health plan members, a process known as retrospective review. The Department found Cigna’s medical necessity review process for a subset of the provider claims did not comply with the plan’s policy. California law requires health plans to maintain written policies and procedures on the process the plan follows to modify or deny claims based on medical necessity. These policies are filed with the DMHC and govern the operation of the plan’s utilization review program and ensure that medical necessity determinations are made in accordance with clinical principles and applicable statutory standards.
Cigna has agreed to pay the fine and implement corrective actions to provide a full clinical review of denied claims dating back two years. Cigna will also revise and refile its policy with the Department.
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About DMHC
The mission of the DMHC is to ensure health plan members have access to equitable, high-quality, timely, and affordable health care within a stable health care delivery system. The DMHC accomplishes this important mission by regulating health plans, enforcing California’s strong consumer protection laws and assisting health plan members. For more information visit www.DMHC.ca.gov.