AUSTRALIA | Bupa has been ordered to pay AUD 35 million for unconscionable conduct and making misleading representations about members' entitlements.
Bupa HI Pty Ltd (Bupa) has been ordered by the Federal Court to pay AUD 35 million in penalties for engaging in unconscionable conduct and making false or misleading representations to Bupa members, hospitals and medical providers about the members’ entitlements to private health insurance benefits for certain claims.
The Court declared that, between May 2018 and August 2023, Bupa engaged in misleading or deceptive conduct and made false or misleading representations by advising that members were not entitled to benefits for any part of their claim when, in fact, these members were entitled to benefits for any treatment covered under their policy.
The Court also declared that Bupa engaged in unconscionable conduct between June 2020 and February 2021 in connection with its incorrect assessment of some Mixed Coverage Claims.
Most of the claims impacted by Bupa’s conduct were 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.
Bupa cooperated with the ACCC during its investigation and agreed to make joint submissions with the ACCC to the Court about proposed orders, including in relation to liability and penalties.
“Bupa’s conduct impacted thousands of consumers. During our investigation, we heard from Bupa members who suffered significant harm, including financial harm as well as pain, suffering and emotional distress as a result of Bupa’s conduct,” ACCC Deputy Chair Catriona Lowe said.
“Some of Bupa’s members decided to cancel, delay or forego necessary treatment, resulting in potential medical risks or complications, because they were incorrectly told they were not entitled to health insurance benefits.”
Lowe said private health insurance can be a significant expense for consumers and people rightly expect to receive the level of coverage they pay for.
Medical providers and hospitals were also impacted by Bupa’s conduct, including by not receiving the payments they were entitled to in respect of certain members’ claims.
In addition to the AUD 35 million in penalties, the Court also ordered an injunction restraining Bupa from engaging in the contravening conduct for a period of five years.
“We consider this to be extremely serious conduct, and this is reflected in Bupa’s admission that it engaged in unconscionable conduct, which is one of the most serious types of misconduct under the consumer laws that we enforce,” Lowe said.
“This outcome should serve as a reminder to all health insurers of their obligations under the Australian Consumer Law, including that they must ensure that claims are assessed correctly so that their members receive the benefits they are entitled to under their policies.”
In June this year, Bupa provided the ACCC with a court enforceable undertaking to complete its remediation program to compensate affected members, hospitals and medical providers by Bupa’s misconduct. This includes compensation for the amount the member was entitled to but did not receive, plus interest.
Bupa commenced the remediation program prior to this court action. To date, more than AUD 14.3 million has been paid to parties for more than 4100 affected claims.
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