The Australian Competition and Consumer Commission (ACCC) filed proceedings in Australia’s Federal Court against insurer Bupa. for misleading or deceptive conduct that affected thousands of consumers over more than five years.
Bupa admitted it misled members by stating they were not entitled to private health insurance benefits for their entire claim when, in fact, part of the treatment was covered under their policy.
The ACCC stated that Bupa also admitted to unconscionable conduct in its handling of 388 mixed coverage claims.
According to the ACCC, most affected claims involved hospital treatment where two or more procedures occurred simultaneously.
In cases where one part of the treatment was covered and another part was not, Bupa incorrectly denied the entire claim.
Between May 2018 and August 2023, Bupa misrepresented to members that no benefits were payable for mixed coverage or uncategorized item claims, even though members were eligible for benefits for the covered portion.
These misrepresentations happened both when consumers inquired about their entitlements before treatment and when claims were processed automatically after treatment.
The ACCC also noted that between June 2020 and February 2021, Bupa stopped manually reviewing certain mixed coverage claims that its systems had automatically rejected, despite knowing manual review was needed to identify and pay the correct benefits.
The ACCC said Bupa admitted this was unconscionable in specific circumstances.
The ACCC and Bupa will jointly request that the Federal Court impose a penalty of A$35 mn ($22.9 mn) and other orders. The court will decide whether the proposed penalty and orders are appropriate.
Before the ACCC’s legal action began, Bupa started compensating affected members, medical providers, and hospitals, paying A$14.3 mn to date across more than 4,100 claims. The ACCC accepted a court-enforceable undertaking from Bupa to continue its compensation program.
Bupa cooperated with the ACCC investigation by agreeing to jointly seek declarations, penalties, an injunction, costs, and additional orders. The Federal Court will set a hearing date to consider the proposed orders.
