Medibank has been accused of telling their customers who made claims on their “Lite” or “Boost” policies that they were not entitled to cover for joint investigations or reconstruction procedures, when in fact their policies covered these procedures.
ACCC Chair Rod Sims alleges that Medibank incorrectly rejected claims or eligibility enquires from over 800 members for benefits that they were entitled to and were paying for.
“As part of our case, we estimate about 60 members needlessly upgraded their policies so they could access the joint investigation and reconstruction procedures they were already entitled to under their existing, cheaper insurance policies,” Mr Sims said.
Medibank responded to the ACCC proceedings in a media release confirming that in 2017 the company discovered that not all Medicare Benefits Schedule (MBS) item codes applicable to the Lite and Boost products were entered into its claims assessment system, which caused the “error”.
In 2018, Medibank voluntarily notified the ACCC of the error and contacted around 130,000 customers who were insured by the Boost and Lite products and paid out $745,691 to 175 of the affect customers.
Medibank’s ahm Senior Executive, Jan O’Keefe, apologised unreservedly to customers who had been “impacted by the error”.
“We believe the approach we have taken to be transparent with all post and current Lite and Boost customers about the issue, the way we have implemented a compensation program and how we have engaged proactively with the ACCC, reflects our commitment to do the right thing,” Ms O’Keefe said.
The ACCC case against Medibank follows a flow of negative press for the industry, including NIB boss Mark Fitzgibbon’s call to abolition Medicare which was met with fierce public backlash.
Medibank is a member of the health insurance lobbying group Private Healthcare Australia, which has attempted to shift the blame to other sectors of the health system for the continued increases to the cost of health insurance premiums.
After tax profits for private health insurers, including Medibank, are up 15% over the past three years as the cost of health coverage for Australian families continues to soar.