Bupa forced to pay back $35million to thousands of Australians: What you need to know

One of Australia’s biggest health insurers will pay a $35million penalty after thousands of hospital claims were wrongly rejected.

Bupa has reached an agreement with the Australian Competition and Consumer Commission to be punished for wrongly advising customers they were not entitled to private health insurance benefits for their entire claim, when in fact they were.

The UK-based multinational health insurer, which bought MBF in 2008, has started compensating affected members, medical providers and hospitals.

To date, Australia’s second biggest health insurer has paid out $14.3million to those affected by 4,100 claims, following a court order.

It has also admitted to engaging in unconscionable conduct in relation to 388 mixed coverage claims. 

Bupa customers were left out of pocket for medical expenses that should have been covered by their health insurance policy between 2018 and 2023.

Bupa Asia-Pacific chief executive Nick Stone has issued an apology and acknowledged that it should ‘never have happened’.

‘We are deeply sorry for failing to get things right for our customers and are saddened by the impact this has had on them and their families,’ he said. ‘This should never have happened.

One of Australia’s biggest health insurers will pay back $35million after thousands of hospital claims were incorrectly rejected

Bupa Asia-Pacific chief executive Nick Stone has issued an apology and acknowledged that it should ‘never have happened’ with regards to 388 mixed coverage claims

‘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.’

The competition regulator took legal action against Bupa for breaching Australian consumer law by wrongly assessing two sub categories of hospital and medical claims – known as ‘mixed coverage’ and ‘uncategorised items’. 

Policyholders had their entire claim rejected in cases where part of the treatment was covered by a member’s policy and part of the treatment was not covered.

Bupa customers are advised to come forward if they had made a mixed coverage claim from May 1, 2018 to August 31, 2023.

The health insurer also admitted that between June 2020 and February 2021, it had stopped manually reviewing certain mixed coverage claims that had been automatically incorrectly assessed as having no benefits payable.

ACCC chair Gina Cass-Gottlieb said Bupa’s actions had caused its policyholders to delay medical treatment.

‘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,’ she said. 

‘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. 

ACCC chair Gina Cass-Gottlieb said Bupa’s actions had caused its policyholder to delay medical treatment

‘Bupa’s conduct denied certain members benefits to which they were entitled to under their private health insurance policies.’ 

The Federal Court will now consider a settlement after the ACCC proposed a total penalty of $35million following talks with Bupa.

Bupa said it had established a dedicated team to manually review almost 20,000 historical mixed coverage and uncategorised item claims to ensure they were assessed and paid correctly.

Bupa, with a 25.4 per cent market share, is Australia’s second largest private health insurer after Medibank on 26.7 per cent, Australian Prudential Regulation Authority data shows.