Company or individual details
- Medibank Private Limited47 080 890 259
The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Medibank Private Limited (Medibank). Pursuant to the undertaking, Medibank has agreed to:
- within 30 days, send a further communication in the form attached to the undertaking to the around 670 members who were potentially affected by Medibank’s conduct but did not submit a claim or receive compensation pursuant to Medibank’s remediation program;
- allow any affected members to submit a claim for compensation at any time within 6 months of the date of Medibank’s communication to those members;
- within 12 months, report to the ACCC to confirm the communication has been sent, state the number of claims received by Medibank for compensation following the communication, and the total number of claims that were accepted and rejected, and an explanation of the basis of any rejection;
- within 60 days, conduct a review of its procedures for the risk rating and escalation of ACL related compliance incidents; and
- within 90 days, make such amendments to its incident management procedures as are reasonably necessary to ensure that, for a period of at least three years from the commencement date of the undertaking, any ACL compliance incidents that may involve a breach of the ACL are given a provisional rating of ‘high’ and are reported to the Senior Executive, Compliance & Regulatory Affairs (or equivalent role), when Medibank considers that any one (or more) of the following elements are satisfied:
- the incident could involve an average financial loss of $500 or more for 500 or more members;
- the incident could involve an aggregate member financial loss of $250,000 or more; or
- the incident is likely to be viewed by a regulator as a serious breach.
This undertaking follows the resolution of proceedings commenced by the ACCC against Medibank on 3 September 2019 in the Federal Court of Australia in matter number VID 942 of 2019.
On 16 July 2020, the Federal Court declared that, between February 2013 and 25 July 2018, Medibank contravened sections 18 and 29(1)(m) of the ACL by representing in the course of responding to:
- claims made by, or on behalf of, ahm members with “Lite” policies; and
- eligibility enquiries made by, or on behalf of, ahm members with “Lite” and “Boost” policies (Policies),
for procedures or treatments associated with certain MBS codes for medical services which constitute joint investigations and reconstructions (Affected Members) that Affected Members were not entitled to the payment of benefits under their Policies for those medical services, when in fact the Affected Members were entitled to benefits under their Policies for such services.
In addition, the Federal Court ordered Medibank to pay a pecuniary penalty of $5,000,000 for contraventions of section 29(1)(m) of the Australian Consumer Law (ACL), and the ACCC’s costs in the amount of $70,000.
In resolving the matter, Medibank made admissions to the Court and made joint submissions with the ACCC in relation to the appropriate penalty to be imposed.