Health insurer, NIB, is being taken to task by the ACCC, over alleged misleading and deceptive conduct and unconscionable conduct.
NIB has provided a MediGap Scheme to its customers since the early 2000s. The Scheme pays higher benefits to practitioners who agree to participate, and in return those practitioners agree to not charge NIB customers out of pocket expenses.
The ACCC contends that (for a period between June 2011 and October 2016) NIB advised members with policies covering certain eye procedures that they would not incur any out of pocket expenses, and that NIB would give prior notice to members of any changes which negatively impacted their entitlements to benefits under their policies.
However, in August 2015, NIB quietly removed certain eye (and other) procedures from the MediGap Scheme. Procedures removed from the Scheme included those often regularly used by elderly patients to inhibit further loss of eyesight. NIB fund members were not informed prior to the change, leaving some substantially out of pocket.
The change impacted the following NIB policies: “Basic Plus”, “Family Basic Saver”, “Family Plus”, “Hospital Plus”, “Just Hospital”, “Mid Plus”, “Premier Plus”, “Top Cover”, “Young at Heart Mid” and “Young at Heart Top.”
What does the ACCC allege?
In failing to notify fund members in advance of the change to the affected policies, the ACCC alleges that NIB misrepresented the benefits available to fund members, and behaved unconscionably. The ACCC alleges NIB identified more than 400 members who had accessed eye procedures in the preceding year, and NIB internal documents showed senior management considered that the fund “probably ought to proactively communicate” the changes to affected fund members.
Further, a practitioner associated with the Newcastle Eye Hospital wrote to his patients who were members of the NIB fund, advising them of the changes to the MediGap Scheme, and reminded them of their right to choose another insurer. NIB allegedly contacted the hospital, seeking a commitment that its practitioners would not contact NIB fund members or the media about the changes to the Scheme.
The ACCC is seeking, amongst other things, declarations, pecuniary penalties, orders in relation to compliance programs, corrective notices and costs.
What happens next?
NIB has indicated that it will defend the claims. The case has yet to be set down for hearing, and we’ll certainly keep you updated on developments.