One of Australia’s biggest health insurers has admitted incorrectly dealing with loads of claims, leaving customers thousands of dollars out of pocket.

Bupa said it was “deeply sorry” for more than five years of conduct that Australia’s consumer watchdog found to be misleading and deceptive.

It admitted incorrectly rejecting claims for hospital treatment where multiple procedures were performed, because part of the treatment was not covered by their policies.

Bupa, which has agreed to pay a $35 million fine, incorrectly rejected the entire claim even though part of the procedures were covered.

Some punters to forked out thousands of dollars to cover their expenses while others upgraded to more expensive policies to ensure coverage, the Australian Competition and Consumer Commission said.

Watchdog chairwoman Gina Cass-Gottlieb said some people delayed or even cancelled medical treatment because of Bupa’s conduct.

“Consumers purchase private health insurance to provide peace of mind, certainty of coverage and the ability to choose where and when to undertake their procedures,” she said.

“Bupa’s conduct denied certain members benefits to which they were entitled to under their private health insurance policies.”

Bupa also failed to manually review mixed coverage claims that had been automatically assessed as not having payable benefits.

It has admitted this was “unconscionable” conduct.

The breaches occurred because of a lack of clear instructions and training for staff handling mixed coverage claims and poorly programmed auto-claim systems.

Bupa should have invested in the necessary systems, processes and training to prevent the “very serious” conduct from happening, or addressed it promptly, Cass-Gottlieb said.

The health insurance giant holds a one-quarter share of Australia’s private health insurance market and made a $607 million pre-tax profit in the 2023/24 year, data with the financial system regulator shows.

Bupa’s Asia Pacific chief executive Nick Stone said compensation was already under way, with $14.3 million paid to about 4100 affected claims and eligibility checks.

“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 – this should never have happened,” he said.

“Our priority has been to communicate and compensate our affected health insurance customers and providers, along with putting in place measures to help ensure this does not happen again.”

Bupa and the ACCC will jointly ask the Federal Court to approve the $35 million penalty.

-AAP