The Federal Court has ordered Bupa to pay A$35 million in penalties for unconscionable conduct and making misleading representations to members regarding their health coverage entitlements.
The insurer admitted that between May 2018 and August 2023, it engaged in conduct that resulted in thousands of Australians being wrongly denied benefits for medical treatments.
The Australian Competition & Consumer Commission (ACCC) brought the action, establishing that Bupa misled members, hospitals, and medical providers. The company incorrectly advised that members were not entitled to benefits for any part of a claim when, in fact, they were covered for portions of the treatment.
The breakdown
The core of the issue centred on "Mixed Coverage Claims" - situations where a patient received hospital treatment involving multiple procedures, some covered by their policy and others not.
Instead of paying out for the covered segment, Bupa rejected the entire claim. The "all-or-nothing" approach meant that members paying premiums for specific coverage were told they had none, often leaving them with out-of-pocket expenses.
Key rulings:
- Admission: Bupa cooperated with the ACCC, admitting it engaged in misleading or deceptive conduct and, in some instances, unconscionable conduct.
- Penalty: The insurer has been ordered to pay $35 million for breaching consumer laws.
- Remedy: Bupa has provided a court-enforceable undertaking to complete its remediation program and is subject to a five-year injunction restraining it from similar conduct.
ACCC Deputy Chair Catriona Lowe stated the penalty reflects the gravity of the misconduct, noting the "pain, suffering and emotional distress" caused to members.
"Private health insurance can be a significant expense for consumers and people rightly expect to receive the level of coverage they pay for," Lowe said.
"We consider this to be extremely serious conduct, and this is reflected in Bupa’s admission that it engaged in unconscionable conduct."
Tangible damage
The ACCC highlighted that the misinformation had concrete health consequences beyond financial loss.
Some members, believing they had no coverage, made the choice to cancel, delay, or forego necessary medical procedures. This resulted in potential medical risks and complications that could have been avoided had Bupa properly assessed their claims.
"Some of Bupa’s members decided to cancel, delay or forego necessary treatment... because they were incorrectly told they were not entitled to health insurance benefits," Lowe said.
“We remain deeply sorry for these errors and have apologised to our affected customers for the impact this has had on them and their families and have taken actions to ensure this doesn’t occur again,” Bupa said in a statement.
The insurer said that as of 5 November, it had paid out $14.3 million in related compensation.
The fallout
The penalty follows a remediation process Bupa commenced prior to the court action. To date, the insurer has paid out more than $14.3 million to affected parties across more than 4,100 claims.
The court has also imposed an injunction restraining Bupa from engaging in similar contravening conduct for five years.
"Today’s outcome should serve as a reminder to all health insurers of their obligations under the Australian Consumer Law," Lowe added.
