Health funds acted ‘illegally’ in refusing claims: probe

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Some of Australia’s biggest health insurance funds illegally declined some members’ claims for up to seven years, according to an investigation prompted by an industry whistleblower.

The Guardian has revealed failings that involved member claims to NIB, Bupa and HCF.

It said that private health insurers routinely refused to pay hospital bills by linking customers’ illnesses to a pre-existing health condition. Funds are legally required to appoint a doctor to review the medical evidence and consider advice from the customer’s treating physician before doing so, it said.

The Guardian obtained leaked documents that it said showed NIB repeatedly failed to have doctors review such cases over a seven-year period.

The Guardian reports: “NIB has privately admitted to the Commonwealth Ombudsman, which investigates complaints against private health insurers, that its processes were not ‘aligned to the legislative requirements’ due to ‘some pre-existing condition determinations not being undertaken by a medical practitioner’.

“The public has not been told of NIB’s failings, despite referrals to the regulator. NIB has been allowed to deal with the problem by reviewing the cases internally and contacting what it says is a ‘small number’ of customers to apologise and offer reimbursement.”

The article also reported that Bupa admitted in 2016 that it had falsely rejected 7740 claims without a doctor’s review over five years.

The Guardian said the leaked documents showed that a third insurer, HCF, was twice questioned by the Commonwealth Ombudsman “about its apparent failure to engage doctors to review claims, once in June 2016 and again in March 2018”.

HCF told The Guardian it had complied with all requests from the Commonwealth Ombudsman. NIB said it had not been appointing doctors to review all cases involving pre-existing medical conditions and that it had changed its processes in October 2018 to fix the problem. Bupa, as with NIB, said it had only failed to appoint doctors in “straightforward” cases where it was clear that a pre-existing condition rejection should be made.

Consumers Health Forum (CHF) chief executive Leanne Wells said the revelations would further shake public confidence in health insurance.

“This issue goes to the accountability and transparency that should be central to health insurance system and the disclosures should prompt the Government to examine the circumstances surrounding these breaches and provide a report to the public.

“Consumers have every reason to expect that the funds to whom they pay thousands of dollars in premiums are behaving with the utmost integrity.

“This latest episode underscores the need for a strengthened role for the Commonwealth Ombudsman to monitor health insurance activities, which was announced in October 2017.  And it’s vital that consumers should check reasons given by their insurer for a denied claim.

“The frustration and uncertainty many members experience concerning the cost and complexity of their health insurance is aggravated by indications funds have failed to follow the rules when it comes to disputes over pre-existing conditions,” Ms Wells said.

In YourLifeChoices’ 2019 Retirement Matters Survey, 69 per cent of the 5932 respondents said they had private health cover and 81 per cent said they hoped to maintain it for life. However, the respondents said the second biggest drain on their savings was the cost of healthcare. Energy costs were No.1.

Do The Guardian’s revelations make you suspect about a denied claim with one of the health insurers mentioned in this article?

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    COMMENTS

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    TREBOR
    10th Jul 2019
    10:32am
    'pre-existing medical condition' - sure - we all have tracks in our DNA that may well make us susceptible to certain things... my family all develop heart troubles which I attribute to our part North German Plain ancestry, with a serious meat and milk diet. Other families tend towards cancers and such, and some scientists even say that obesity etc is a genetic thing.

    Weasel words from people paid to provide a service and once again clear proof that the 'business model' does NOT return the value for money it claims. The alternative, of course, is a 'controlled' 'socialist' health system, in which all aspects are under public service control.... and of course such a concept sends tremors through the very souls of many.....

    Robber at life point......
    TREBOR
    10th Jul 2019
    10:53am
    dang - robberY at life point...
    Anonymous
    10th Jul 2019
    11:05am
    Yes Bob, the health insurers are acting like the general insurers who will spend millions to save thousands just to create a precedent. A relative was disallowed a claim when a window blew out in a storm and her unit was water damaged because she lived on a recognised flood plain. She lives on the 18th floor! One of our children was refused a claim due to an existing condition but was paid out when it was pointed out that there was cover with the insurer from birth so the condition was known to them.
    TREBOR
    10th Jul 2019
    12:18pm
    18th floor? That's only the low water mark on the flood plain.....
    Anonymous
    10th Jul 2019
    12:35pm
    Good one Bob, went past the turn-off to your area last week.
    TREBOR
    10th Jul 2019
    2:30pm
    Ah - traveling north or south? North for the winter in a camper or caravan? Getting cold - snow predicted down to 1700 meters - could snow at Barrington...
    Karl Marx
    10th Jul 2019
    11:01am
    So why did the Commonwealth Ombudsman allow the health insurers to keep their fraudulent practices secret surely any business like Health Insurance should be named for unfair & illegal practices that seem to number in the tens of thousands & they seem to be only the reported ones. How many other members who were denied refunds that should of been paid but weren't aware of the underhanded practices of the insurer.
    Have any of these insures been fined or investigated for criminal acts, bet they won't
    Hardworker
    10th Jul 2019
    5:32pm
    These activities usually get mentioned in the Private Health Insurance Ombudsman's yearly report but does anyone take any action on it - no. Medibank Private has previously been mentioned in the Ombudsman's report for not recording what they tell you over the phone and leading people to believe they are not covered for certain things when they are. Always ask to speak to an assessor as their telephone staff are poorly trained on all the different packages they sell, especially the older ones. If you have hospital cover you are ALWAYS entitled to the default benefit which the Govt requires all private health insurers to pay even if you choose to go to a private hospital and only have the lowest cover.
    Rosret
    10th Jul 2019
    11:12am
    Does that mean that you cannot change insurance companies as you age? i.e. Only healthy people can be selective and covered fully. Or have I misunderstood?
    TREBOR
    10th Jul 2019
    12:22pm
    Catch-a 22.....

    Stop subsidising this 'business model' and put the money into a genuine health system....
    KB
    2nd Aug 2019
    4:39pm
    Rosret You can change companies even if you have pre exisiting conditions
    KB
    2nd Aug 2019
    4:39pm
    Rosret You can change companies even if you have pre exisiting conditions
    cupoftea
    10th Jul 2019
    1:10pm
    Is there anything in this in this country that is not ripping the people off
    cupoftea
    10th Jul 2019
    1:10pm
    Is there anything in this in this country that is not ripping the people off
    TREBOR
    10th Jul 2019
    2:30pm
    No - since the private corporate model became the 'norm' without consent of the people.....

    10th Jul 2019
    3:50pm
    Health insurance = SCAM.
    Hardworker
    10th Jul 2019
    5:27pm
    Except if you need an operation urgently and the public hospital system doesn't see it as urgent. We have all been blackmailed into needing Private Health Insurance.
    Anonymous
    10th Jul 2019
    6:35pm
    why doesn't everyone just ditch private health insurance and rely on the public hospital system.....have friends who think it is great but wonder what will happen if the privately insured just gave up and relied on the public system..imagine how long the waiting lists would be then!!
    TREBOR
    11th Jul 2019
    12:41am
    Hardworker - I blame the medical 'proffesions' - and their addiction to the mighty dollar...

    I've had to travel hundreds of kilometres, without payment, to cater to my ex's surgical issues - when they kept putting her back on the list for surgery.

    Hippocratic Oath? Hypocricital Oath... bastards....

    No professions need to be more brought under regulation than the medical professions...
    KB
    2nd Aug 2019
    4:38pm
    I have had pre exisiting conditions and received treatment. Have had no issue. Okay with NIB but moved HCF as they have lower premiums than the former
    KB
    2nd Aug 2019
    4:38pm
    I have had pre exisiting conditions and received treatment. Have had no issue. Okay with NIB but moved HCF as they have lower premiums than the former


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