Health insurance giant Bupa has admitted to misleading thousands of customers about their policy entitlements over more than five years, resulting in some forgoing treatment and others being left out of pocket by thousands of dollars.
The Australian Competition and Consumer Commission (ACCC) launched legal action in the Federal Court, alleging Bupa breached consumer law by engaging in misleading or deceptive conduct, making false representations, and acting unconscionably in its handling of two types of claims—“mixed coverage” and “uncategorised items”.
ACCC chair Gina 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.”
The insurer has agreed to a proposed $35 million penalty and issued a public apology. In a statement released Monday, Bupa confirmed it had made “false or misleading representations” and admitted to engaging in “unconscionable conduct” in the assessment of 388 mixed coverage claims between May 2018 and August 2023.
Bupa APAC CEO Nick Stone said in a statement:
“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. This should never have happened.”
The affected claims involved hospital treatments where multiple procedures were carried out, some covered and others not. Rather than paying the portion of treatment that was covered, Bupa wrongly rejected the entire claim. The ACCC said the misrepresentations occurred both when customers checked coverage before procedures and during post-treatment claims.
The result: some customers paid out of pocket, upgraded to more expensive policies unnecessarily, or abandoned treatment altogether—leading to further health risks and distress.
Stone acknowledged the broader harm caused by Bupa’s failings.
“We take great pride in being trusted by our 4.4 million health insurance customers and we know that in this instance we did not meet the standards that our customers, providers and people expect of us.”
He added:
“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.”
To date, Bupa has paid $14.3 million in compensation on more than 4,000 affected claims and eligibility checks, including interest and goodwill payments. While the number of affected claims represents less than 0.02% of all hospital and medical claims assessed over the period, Stone said,
“We know this isn’t good enough and we’re committed to doing better. This doesn’t reflect the hard work our people put in every day to support our customers and meet their healthcare needs.”
According to Bupa, the errors stemmed from “inaccurate or unclear instructions, training or guidance” that led to incorrect assessments and delays in correcting them.
“That’s why our team has been focused on fixing these issues including making changes to the way we work and improving our systems and processes to help ensure this doesn’t happen again.”
Remedial actions taken by Bupa include:
• Fixing system issues and how claims are processed
• Manually reviewing nearly 20,000 historical claims
• Introducing manual assessments where automation fails
• Improving training for customer-facing teams
• Strengthening governance and internal oversight
Cass-Gottlieb said Bupa’s behaviour “affected thousands of members […] 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.”
“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 is urging customers and providers who believe they may have had a claim incorrectly assessed between 1 May 2018 and 31 August 2023 to contact the company via its website, phone line (134 135), or in-store.
The ACCC and Bupa will jointly propose the penalty to the Federal Court, along with an Enforceable Undertaking to ensure the insurer continues its remediation efforts.
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