Three major health funds slammed

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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Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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