Private health insurer Bupa has been fined A$35m ($22.8m) after admitting to misleading or deceptive conduct that led more than 4,000 Australians to forgo claiming hospital treatments they were entitled to.  

The Australian Competition and Consumer Commission (ACCC) announced the penalty, stating that Bupa had acknowledged breaches in its handling of customer claims. 

The ACCC revealed that Bupa incorrectly informed policyholders they were not eligible for private health insurance benefits, resulting in some customers paying thousands of dollars for medical treatments that should have been at least partially covered.  

In some cases, policyholders upgraded to more expensive policies to secure coverage they believed they lacked. 

ACCC chair Gina Cass-Gottlieb 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. Bupa’s conduct denied certain members benefits to which they were entitled to under their private health insurance policies.”  

She noted that the conduct, spanning across five years, caused harm to consumers, with some delaying, cancelling, or going without treatments they were covered for. 

Bupa APAC chief executive Nick Stone said: “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 company has already paid A$14.3m to address more than 4,100 affected claims. 

The misconduct involved two types of insurance claims between May 2018 and August 2023: “mixed cover claims” and “uncategorised items.”  

Mixed cover claims involve treatments partially covered by a customer’s policy and partially by the customer, while uncategorised items refer to treatments not assigned to a standard clinical category in Bupa’s systems.  

According to Bupa, mixed coverage claims accounted for less than 0.02% of assessed customers, and uncategorised items represented about 0.004% of claims over the period.  

The ACCC attributed Bupa’s errors to inadequate staff training and unclear instructions for assessing mixed coverage claims, compounded by systems programmed to incorrectly reject both mixed coverage and uncategorised item claims.  

Cass-Gottlieb said: “Private health insurance is complex, and consumers should be able to trust their health insurer to assess and pay health insurance claims accurately. Bupa’s conduct is very serious and falls 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.” 

The ACCC and Bupa will jointly request a court order for the A$35m penalty and other measures, with the court to determine the appropriateness of the penalty.  

Bupa began compensating affected members, medical providers, and hospitals prior to the legal action.