Bupa Ordered to Pay $23.3 Million After Court Finds Years of Misleading Conduct

Key Takeaways

• Federal Court Penalty: Bupa must pay $23.3 million (AUD $35 million) for misleading conduct and unconscionable behaviour.
• Impact on Members: Thousands were incorrectly told they had no benefit entitlements, leading some to delay or forego necessary treatment.
• Serious Misconduct: The Court found Bupa’s handling of Mixed Coverage Claims included unconscionable conduct under Australian Consumer Law.
• Remediation Efforts: Bupa has repaid more than $9.5 million (AUD $14.3 million) so far and faces a five-year injunction against repeating the conduct.

Deep Dive

Bupa has been ordered to pay $23.3 million (AUD $35 million) after the Federal Court found the health insurer misled thousands of members, and even hospitals and medical providers, about what their private health policies actually covered. The ruling caps off a years-long stretch of incorrect claims decisions that, in many cases, left members believing they had no entitlements at all when parts of their treatment were in fact covered.

At the centre of the case were claims involving hospital treatments where two or more procedures were performed at the same time. If one procedure fell outside a member’s policy, Bupa frequently rejected the entire claim, even when the other part of the treatment was eligible for benefits. According to the Court, that approach went on from May 2018 to August 2023 and amounted to misleading or deceptive conduct under Australian Consumer Law.

The Court also found that between June 2020 and February 2021, Bupa’s handling of certain “Mixed Coverage Claims” crossed the line into unconscionable conduct, which is one of the most serious findings available under the law.

ACCC Deputy Chair Catriona Lowe said the impact on members was not theoretical.

“During our investigation we heard from Bupa members who suffered significant harm, including financial harm as well as pain, suffering and emotional distress,” she said. Some members cancelled or delayed treatment altogether because they were told, incorrectly, that they had no benefits available.

Providers felt the effects too, with some hospitals and medical practitioners missing payments they were entitled to for legitimate services.

Bupa cooperated with the ACCC during the investigation and made joint submissions to the Court on liability and penalties. Along with the financial penalty, the Court imposed a five-year injunction preventing the insurer from repeating the conduct.

Lowe said the outcome should be a wake-up call for the entire private health sector.

“Private health insurance can be a significant expense for consumers and people rightly expect to receive the level of coverage they pay for,” she said.

Bupa has already begun a remediation program compensate affected members, hospitals, and providers. The program requires Bupa to repay what should have been covered under each policy, plus interest. To date, more than $9.5 million (AUD $14.3 million) has been paid out across over 4,100 claims.

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