Bupa in Court for Misleading Health Insurance Claims

The ACCC has instituted proceedings in the Federal Court against Bupa HI Pty Ltd (Bupa) for breaches of the Australian Consumer Law in relation to members' entitlements to private health insurance benefits for certain claims, affecting thousands of consumers over a period of more than five years.

Bupa has admitted to engaging in misleading or deceptive conduct and making false or misleading representations by advising members they were not entitled to private health insurance benefits for their entire claim, when in fact this was not the case. Bupa has also admitted to engaging in unconscionable conduct in connection with its assessment of 388 Mixed Coverage Claims.

Most of the claims impacted by the admitted conduct were claims for hospital treatment, in which two or more procedures were performed at the same time. 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 ACCC and Bupa will jointly ask the Court to order Bupa to pay a total penalty of $35 million and make 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 to date, has paid $14.3 million to parties for more than 4,100 affected claims. The ACCC has accepted a court-enforceable undertaking from Bupa to continue compensating affected parties under its existing remediation program.

"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," ACCC Chair Gina Cass-Gottlieb said.

Some consumers were left thousands of dollars out of pocket and had to personally finance expenses for some medical treatments that Bupa was in fact obliged to pay, at least in part, under its policies. Some policy holders also upgraded to more expensive policies to ensure coverage.

In addition to financial impacts, some consumers were exposed to potential medical risks or complications, physical pain and distress as a result of not proceeding with medical treatment or as a result of undergoing multiple treatments after being falsely advised they were not covered for certain procedures.

"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. Bupa's conduct denied certain members benefits to which they were entitled to under their private health insurance policies," Ms Cass-Gottlieb said.

Medical providers and hospitals were also impacted by the conduct, including by not receiving the payments to which they were entitled in respect of certain claims.

Bupa has admitted that at various times between May 2018 and August 2023 it misrepresented that members were not entitled to any benefits for a Mixed Coverage Claim or Uncategorised Item Claim, when in fact, they were eligible for benefits for any treatment that was covered under their insurance policy. The misrepresentations occurred before medical treatment, when consumers were checking their coverage and entitlements with Bupa staff, as well as after a procedure due to its automatic claims assessment systems.

Bupa also admitted that between June 2020 and February 2021, it stopped manually reviewing certain Mixed Coverage Claims that had been automatically incorrectly assessed as having no benefits payable. It has admitted that this was unconscionable in certain circumstances, including where it knew that manual review was necessary to ensure it identified and paid benefits for those claims.

Bupa's conduct occurred because Bupa staff did not have consistent and clear instructions and training for assessing Mixed Coverage Claims, and because 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 fell 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."

A copy of the undertaking relating to the compensation is available at Bupa HI Pty Ltd.

If you consider you may have been impacted by the conduct, please contact Bupa on a number you source independently or you can complete a Remediation Form available at: www.bupa.com.au/mixedcoverage.

Bupa has cooperated with the ACCC during its investigation, including by agreeing to jointly seek declarations, penalties, an injunction, costs and other orders. The Federal Court will consider whether to make the orders sought on a date to be fixed.

Background

Bupa is one of the largest private health insurers in Australia. It is a subsidiary of Bupa HI Holdings Pty Ltd which is ultimately controlled by British United Provident Association Ltd.

Mixed Coverage Claims are claims under Bupa's private health insurance policy that included treatment that was covered under a member's private health insurance policy as well as treatment that was not covered under their policy.

Uncategorised Item Claims are claims that included treatment that were not assigned to a standard clinical category in Bupa's claims assessment system.