Court dismisses ACCC action against Medibank

30 August 2017

The Federal Court has today dismissed proceedings brought by the ACCC against Medibank Private Limited (Medibank).

The ACCC had alleged that Medibank made false, misleading or deceptive representations and engaged in unconscionable conduct in relation to its failure to notify Medibank members and members of its subsidiary brand, ahm, of its decision to limit benefits for in-hospital pathology and radiology services, despite representing across a number of its communication and marketing materials that it would.

Justice O’Callaghan dismissed all allegations.

“The ACCC believes that consumers have a right to be informed in advance of important changes to their private health insurance cover,” ACCC Chairman Rod Sims said.

“We took this case because we believed that Medibank’s failure to advise customers of the changes to their cover for in-hospital pathology and radiology services affected vulnerable consumers. In particular, we believed that Medibank’s changes affected those with chronic medical conditions who required these services regularly.”

“The ACCC is carefully considering the judgment,” Mr Sims said.

Background

Medibank is Australia’s largest private health insurer and has approximately 3.9 million members through its Medibank and ahm brands. The conduct affected most Medibank and ahm hospital policies in place since 1 January 2012.

From at least 1 January 2012, Medibank had agreements with many pathology and radiology providers who supplied services to hospital patients (such as blood tests, x-rays, CT scans and MRI scans). Under these agreements, in situations where these providers charged above the Medicare Benefit Schedule (MBS) fee (the gap), Medibank and ahm members were covered and so Medibank paid the gap on their behalf.

From 1 September 2014, Medibank terminated or phased out these agreements. As a result of the agreements no longer being in force, from that date Medibank and ahm members have no longer been completely covered for in-hospital pathology or radiology services, and have had to pay the gap as an out-of-pocket expense.

See: ACCC takes action against Medibank for alleged misleading and unconscionable conduct

The ACCC has also taken action against NIB for alleged misleading and unconscionable conduct 

Release number: 
MR 146/17
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