Australian health insurer Bupa has admitted to breaching Australian Consumer Law and is set to pay a proposed A$35 million penalty, following legal action by the Australian Competition & Consumer Commission (ACCC). The Federal Court will now consider whether to approve the proposed penalty, part of a broader agreement that includes a court-enforceable undertaking for Bupa to continue compensating affected customers and providers.

The action concerns Bupa’s assessment of certain hospital and medical claims between May 2018 and August 2023. Specifically, the company admitted to misleading conduct in relation to ‘mixed coverage’ and ‘uncategorised item’ claims, which affected thousands of members. These claims involved treatment partially covered under a policy being incorrectly rejected in full, leaving many consumers out of pocket for services that were at least partially covered under their insurance.

The ACCC said some consumers delayed, cancelled or missed out on treatment due to incorrect information from Bupa about their coverage, while others upgraded to more expensive policies unnecessarily. In some cases, medical risks and personal distress were caused by the misinformation.

Bupa has also admitted to engaging in ‘unconscionable conduct’, particularly in failing to manually review 388 mixed coverage claims between June 2020 and February 2021.

Nick Stone, CEO of Bupa APAC, issued an apology, stating: “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.”

Stone said Bupa had already paid $14.3 million in compensation across more than 4,100 claims, and that a dedicated team had reviewed nearly 20,000 historical claims. “We know this isn’t good enough and we’re committed to doing better,” he said.

The insurer is implementing a range of measures, including manual claims assessments where needed, improved staff training, and system and process changes to prevent recurrence.

ACCC Chair Gina Cass-Gottlieb called the conduct “very serious” and said Bupa fell short of its responsibilities as one of Australia’s largest insurers. “Consumers should be able to trust their health insurer to assess and pay health insurance claims accurately,” she said.

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