Bupa has apologised and agreed to pay a $35 million fine for misleading thousands of customers over half a decade.

The nation’s second-biggest private health insurer was taken to court by the Australian Competition and Consumer Commission (ACCC), and has admitted to falsely telling customers they weren’t covered for treatment.

“Bupa… (advised) members they were not entitled to private health insurance benefits for their entire claim, when in fact this was not the case,” the consumer watchdog said.

“Bupa has also admitted to engaging in unconscionable conduct in connection with its assessment of 388 Mixed Coverage Claims.

“Most of the claims impacted by the admitted conduct were claims for hospital treatment, in which two or more procedures were performed at the same time.

“In cases where part of the treatment was covered by a member’s policy and part of the treatment was not covered, Bupa incorrectly rejected the entire claim.”

Bupa has admitted to misleading or deceptive conduct and making false or misleading representations over its behaviour, which took place from May 2018 to August 2023.

There was also a nine-month period from June 2020 when it stopped manually reviewing some claims that had been incorrectly rejected, even though it knew those reviews were necessary for customers to receive their correct benefits.

Bupa has agreed with the ACCC to jointly request the Federal Court to impose a $35 million fine for its conduct. The Court will decide if the penalty is appropriate before it is applied.

It has also been compensating affected customers – and had been before the matter was taken to court – and has so far paid out $14.3 million relating to more than 4100 claims.

Bupa has made a court-enforceable undertaking to continue that remediation program, which the ACCC has accepted.

“Bupa’s conduct affected thousands of members over more than five years, and caused harm to consumers some of whom delayed, cancelled or went without treatment for which they were, at least partially, covered under their health insurance policies,” ACCC chair Gina Cass-Gottlieb said.

The consumer watchdog added that some customers ended up paying thousands of dollars for treatment they should have been covered for, while others decided to upgrade their coverage after claims were denied.

“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,” Bupa Asia Pacific chief executive Nick Stone said.

“This should never have happened.”