Thousands Affected By False Rejections
Bupa has agreed to pay a $35 million penalty after incorrectly rejecting thousands of private health insurance claims. The insurer admitted to misleading or deceptive conduct and making false or misleading representations from May 2018 to August 2023.
The Australian Competition and Consumer Commission (ACCC) said Bupa wrongly informed members they were not entitled to benefits when they were. As a result, many financed their own medical treatments and lost thousands of dollars.
Some customers upgraded to more expensive policies while others delayed or avoided medical care altogether due to Bupa’s advice.
Bupa has agreed to pay a $35 million penalty [ABC News: Nic MacBean]
ACCC Confirms Serious Consumer Harm
The ACCC said some customers faced potential health complications and distress after abandoning or repeating treatments. Chair Gina Cass-Gottlieb confirmed that Bupa’s conduct harmed many consumers.
“Bupa’s conduct … 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,” Ms Cass-Gottlieb said.
The ACCC has accepted Bupa’s undertaking to continue compensating affected customers and medical providers.
Hospital Claims Wrongly Rejected
Bupa admitted to incorrectly assessing thousands of hospital claims that involved mixed coverage. These included procedures where some elements were covered and others were not.
Instead of processing the covered portion, Bupa rejected the entire claim. This occurred during both pre-procedure eligibility checks and post-procedure claim assessments.
The insurer also admitted to engaging in unconscionable conduct in relation to 388 specific claims that required manual review but were automatically rejected.
Bupa acknowledged it stopped manually reviewing some claims from June 2020 despite knowing those checks were essential for accurate benefit payments.
More Than $14 Million Already Repaid
Bupa has paid $14.3 million to date in compensation related to over 4,100 rejected claims. Compensation has gone to members, hospitals, and providers.
Chief executive of Bupa APAC, Nick Stone, apologised and pledged to prevent recurrence.
“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.
He added, “This should never have happened, and we are deeply sorry for failing to get things right for our customers.”
Chief executive of Bupa APAC, Nick Stone [Eamon Gallagher]
Government Supports Enforcement
Federal Health Minister Mark Butler said the government backed the ACCC’s action against Bupa.
“Australians pay their hard-earned money to private health insurance providers and they deserve better,” Mr Butler said on X.
He stated that the $35 million penalty “reflects Bupa deliberately misled and ripped off their customers.”
Industry Body Calls For Resolution
Private Healthcare Australia, the peak body for the industry, urged Bupa to resolve the issue promptly and thoroughly. It noted most affected claims involved multiple procedures, where at least one component was covered.
“In cases where part of the treatment was covered by a member’s policy and part of the treatment was not covered, Bupa incorrectly rejected the entire claim,” the association stated.
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Court To Decide Penalty Outcome
Bupa and the ACCC have jointly requested the Federal Court to impose the $35 million penalty. The Court will decide if the amount is appropriate before it is enforced.
Bupa remains Australia’s second-largest private health insurer, serving more than four million members. The company has admitted the errors were due to flawed instructions, unclear training, and failure to act swiftly.
Bupa said these internal issues led to incorrect assessments and eligibility checks over a five-year period.
Members Urged To Check Eligibility
Customers who believe they may have had a historical claim wrongly assessed can contact Bupa. They can visit www.bupa.com.au/mixedcoverage or call 134 135.
Bupa has committed to continue compensating members as part of its ongoing remediation. The insurer is reviewing systems and procedures to prevent further failures.
The ACCC’s enforcement action highlights the responsibility of private health insurers to act transparently and fairly when assessing claims.
The matter reinforces the obligation of large health providers to follow consumer law and provide accurate advice on coverage.
Conclusion
The Bupa case marks one of the most significant private health insurance enforcement actions in recent years. With more than 4,100 claims affected and millions repaid, the resolution continues as the Federal Court considers the proposed penalty.
