Bupa fined $23mn in Australia after ‘unconscionable conduct’

Unlock the Editor’s Digest for free

British health insurer Bupa has agreed to pay a A$35mn (US$23mn) fine in Australia after it admitted to “unconscionable conduct” by denying legitimate claims made by patients over a five-year period.

The Australian Competition and Consumer Commission, the country’s consumer watchdog, began legal proceedings against Bupa after it said the UK company had engaged in “misleading and deceptive” practices between May 2018 and August 2023.

The regulator has agreed the fine with Bupa, but a court will formally set the penalty, which could change.

The crackdown is the latest in a series of actions by Australia’s regulators against companies including Qantas, HSBC and the country’s supermarkets and banks over poor governance and consumer protection.

The action against Bupa relates to “mixed coverage” claims in which patients were checking their eligibility or made an application involving multiple procedures, usually during a hospital visit.

Bupa rejected such claims in their entirety if one of the procedures was not covered by the customer’s policy, even though other parts of the claim were legitimate, according to the ACCC.

Gina Cass-Gottlieb, chair of the commission, said the rejected claims led thousands of customers to pay out of pocket, upgrade their policies or, in some cases, discontinue treatment because of cost.

“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,” Cass-Gottlieb said in a statement.

Nick Stone, head of Bupa Asia Pacific, said the insurer had admitted to the “unconscionable conduct” and so far paid out A$14.3mn in compensation to customers to cover 4,100 claims and eligibility checks. “This should never have happened,” he said.

Bupa Asia Pacific, which comprises its Australian, New Zealand and Hong Kong operations, was the insurer’s largest unit last year, generating 37 per cent of the group’s £16.9bn revenue and nearly half its £914mn in underlying profit.

The British company entered Australia in 2002 and has acquired local competitors to become Australia’s second-largest private health insurer, behind Medibank Private, with 4.5mn customers.

The Australian government subsidies private health insurance to ease pressure on the public system, driving take-up rates.

Bupa has also expanded into running aged care and healthcare centres in Australia and has been linked with a potential bid for hospital operator Healthscope, which collapsed into administration last month.

Bupa has declined to comment on whether it would seek to take over the company.