Health insurer fined $35m, misled 4k members
Private health insurer Bupa has been fined $35m after conceding it engaged in misleading or deceptive conduct to talk more than 4000 Australians out of claiming hospital treatments.
The Australian Competition and Consumer Commission said in a statement on Monday that Bupa admitted to the breaches after telling customers they were not entitled to private health insurance benefits for their claims, even though they were entitled to make a claim.
This left some customers thousands of dollars out of pocket for medical treatments they had to pay for when Bupa should have paid at least part of the bill. Bupa was fined $35m for misrepresenting customers. NewsWire / Nicholas Eagar Credit: NewsWire
The ACCC said some policyholders also upgraded to more expensive policies to ensure they were covered.
ACCC chair Gina Cass-Gottlieb said Bupa's conduct affected thousands of members over more than five years and caused harm to consumers, some of whom delayed, cancelled or went without treatment for which they were, at least partially, covered under their health insurance policies.
'Consumers purchase private health insurance to provide peace of mind, certainty of coverage and the ability to choose where and when to undertake their procedures,' Ms Cass-Gottlieb said.
'Bupa's conduct denied certain members benefits to which they were entitled to under their private health insurance policies.'
Bupa APAC chief executive Nick Stone said he was deeply sorry for failing to get things right because customers were saddened by the impacts this has had on them or their families.
'Our priority has been to communicate and compensate our affected health insurance
customers and providers, along with putting in place measures to help ensure this does not
happen again,' Mr Stone said.
Bupa has admitted over a five-year period between May 2018 and August 2023 that it misrepresented members over two separate insurance types – 'mixed cover claims' and 'uncategorised items'.
A mixed cover claim includes both treatment that is covered in part by a customer's policy and another part covered by the customer itself. Bupa admits the issues occurred between May 2018 and August 2023. NewsWire/Tertius Pickard Credit: News Corp Australia
According to Bupa, the private health insurer pays out more than $20m in claims a year as well as six million in-hospital and medical claims, with the mixed coverage claims representing less than 0.02 per cent of assessed customers over the five-year period.
Similarly, Bupa says about 0.004 per cent of claims fall under uncategorised items, which include treatments that were not assigned to a standard clinical category in Bupa's claims assessment systems.
The ACCC says Bupa's conduct occurred because Bupa staff did not have consistent and clear instructions and training for assessing mixed coverage claims, and its systems were programmed to incorrectly reject mixed coverage and uncategorised item claims.
'Private health insurance is complex, and consumers should be able to trust their health insurer to assess and pay health insurance claims accurately,' Ms Cass-Gottlieb said.
'Bupa's conduct is very serious and falls well short of what is expected of one of the largest health insurers in Australia. Bupa should have invested in the necessary systems, processes and training to prevent this from happening, and address it promptly when it occurred.'
The ACCC and Bupa will jointly ask the court to order Bupa to pay a penalty of $35m among other orders. It is a matter for the court to determine whether the penalty and other orders are appropriate.
Bupa started compensating affected members, medical providers and hospitals before the start of this legal action and has paid $14.3m for more than 4100 affected claims.
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