Australia’s competition regulator has launched court proceedings against private health insurer Bupa, alleging the company misled members and wrongly denied benefits on thousands of claims over more than five years.
The Australian Competition and Consumer Commission (ACCC) says Bupa HI Pty Ltd admitted to engaging in misleading or deceptive conduct and making false or misleading representations by telling members they were not entitled to private health insurance benefits for entire claims when part of those claims should have been paid. The regulator has also said Bupa engaged in unconscionable conduct in relation to 388 “Mixed Coverage Claims”.
Most of the affected claims related to hospital treatments 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 was not, the ACCC says Bupa incorrectly rejected the entire claim.
The ACCC and Bupa will jointly ask the Federal Court to order Bupa to pay a total penalty of $35 million and to make other orders. It will be a matter for the Court to determine whether the penalty and other orders are appropriate.
Bupa began compensating affected members, medical providers and hospitals before the legal action began and has so far paid $14.3 million in relation to more than 4,100 claims. The ACCC has accepted a court‑enforceable undertaking from Bupa to continue compensating affected parties under its existing remediation programme.
“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.
The ACCC said some consumers were left thousands of dollars out of pocket and had to personally fund treatments that Bupa was obliged to pay for, at least in part. Others reportedly upgraded to more expensive policies to ensure coverage. In addition to financial impacts, the regulator said some people faced potential medical risks, complications, physical pain and distress as a result of delaying or foregoing treatment or from undergoing multiple procedures after being told they were not covered.
“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 affected, the ACCC said, with some not receiving payments they were entitled to for certain claims.
According to the regulator, Bupa admitted that 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 they were in fact eligible for benefits for the treatment covered by their policy. The misrepresentations occurred both before treatment, when consumers were checking entitlements with Bupa staff, and afterwards because of the insurer’s automated 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—and incorrectly—assessed as having no benefits payable. The company conceded that this was unconscionable in some circumstances, including where it knew manual review was necessary to identify and pay benefits.
The ACCC said the failings arose because staff did not have consistent, clear instructions and training for assessing Mixed Coverage Claims, and because Bupa’s 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.” Ms Cass‑Gottlieb added.
A copy of the undertaking relating to compensation is available on the ACCC’s public register. People who think they may have been affected are urged to contact Bupa using contact details sourced independently, or to complete a Remediation Form at www.bupa.com.au/mixedcoverage.
Bupa has cooperated with the ACCC during its investigation and has agreed to jointly seek declarations, penalties, an injunction, costs and other orders. The Federal Court will consider whether to make the orders on a date to be fixed.
The ACCC also warned that scammers may try to exploit the situation. STOP – Don’t give money or personal information to anyone if you’re unsure. Scammers will create a sense of urgency. Don’t rush to act. Say ‘no’, hang up, delete. CHECK – Ask yourself could the call, email or text be fake? Contact the organisation using information you source independently. PROTECT – Act quickly if something feels wrong. Contact your bank immediately if you lose money and call IDCARE on 1800 595 160 if you have provided personal information. Report scams to the National Anti‑scam Centre’s Scamwatch at scamwatch.gov.au.
