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The most-revealed documents have been leaked by the country's largest health insurers, who have illegally rejected requests from thousands of sick or injured Australians over the past seven years.
A government whistleblower who investigated their conduct also revealed how his efforts were thwarted by years of inaction, by the lack of public alert, by the intervention of his superiors and by by suspicions that insurers falsified or concealed evidence.
"I tell this story to the public because it does not appear that the authorities are saying anything to the public after finding that the health insurers were breaking the law," said the whistleblower. "I think it was clearly an illegal criminal act committed by a company and that the authorities should have taken it seriously."
Private health insurance companies systematically refuse to pay hospital bills by linking the illness of their clients to a pre-existing condition. But before that, they are legally required to appoint a doctor to review the medical evidence and take into account the advice of the client's treating physician.
Why do health insurers refuse claims if a client has a pre-existing medical condition?
In short, the rules are designed to prevent applicants from playing the system. A pre-existing condition (PEC) is defined as any illness, condition or condition for which signs or symptoms existed six months prior to the applicant's taking out insurance. People with pre-existing conditions must wait 12 months before applying for hospital coverage. Without such a requirement, clients who become ill or anticipate the need for hospital treatment could simply take out a policy, make a claim immediately, and then terminate or degrade their policy once hospital treatment is completed. This effectively forces other insureds to cover the obvious costs incurred by the insurer.
What should insurers do before refusing a claim because of a pre-existing medical condition?
The law requires insurers to appoint a physician to review claims before they are dismissed for CEP reasons. The physician, paid for by the insurer, examines the medical evidence and takes into account the advice of the client's treating physician. The insurer's physician must be satisfied that there is a direct link between the illness or injury being claimed and the signs or symptoms that existed in the six months prior to the purchase of the insurance.
What can the Commonwealth Ombudsman do to investigate complaints?
The Commonwealth Ombudsman acts as a public watchdog for private insurers. It responds to individual complaints about various types of insurer behavior, including costs, service and quality of advice. The ombudsman has a small team dedicated to private health insurance issues, which previously functioned as an independent agency, the private health insurance ombudsman. The team is doing a huge job. It investigates thousands of complaints against private health insurers every year and has almost doubled over the last decade. In 2017-2018 alone, the Ombudsman investigated 4,553 complaints against health insurers, 367 of which related to pre-existing conditions. When a person complains of a pre-existing illness refusal, the ombudsman asks the client for medical certificates from his attending physician and asks the insurer to provide the badessment of his / her doctor and the result letter sent to the client. A case manager badesses the evidence and can resolve it themselves, seek advice from colleagues or superiors, or refer the complaint to management.
When he suspects that the insurer has been deceived, the ombudsman may request an independent medical board to review it. If the independent opinion also finds wrongdoing, the ombudsman writes to the insurer and asks him to reconsider his decision.
When several systemic failures are detected, such as those of Bupa and NIB, the ombudsman can either directly notify the insurer or refer the case to the Ministry of Health, which acts as the regulatory body.
Documents show that the insurance giant NIB has repeatedly failed to have these cases reviewed by doctors over the past seven years.
NIB admitted privately to the Commonwealth Ombudsman, who investigates complaints against private insurers, that his processes were not "in line with legislative requirements" because of "some pre-existing determinations not made by a doctor ".
The public was not informed of NIB's deficiencies, despite referrals to the regulator. NIB was allowed to handle the problem by examining cases internally and contacting what is, she says, a "small number" of clients to apologize and offer a refund.
In 2016, another major insurer, Bupa, admitted to having rejected 7,740 claims without a doctor's examination in the five years preceding that date. The insurer had spent years falsely telling clients that their rejections had been "determined by a physician".
Bupa identified the deficiencies and conducted his own internal investigation before referring the case to the Commonwealth Department of Health and Ombudsman.
Internal records indicate that the Commonwealth Ombudsman expressed concerns about Bupa's compliance with the law in 2014, two years before the multinational's public mea culpa. The ombudsman did not open an investigation to discover the full extent of Bupa's failings.
In 2016, Bupa admitted that it had rejected 7,740 health insurance claims without a medical examination. Photo: Mick Tsikas / AAP
The documents also show that a third insurer, HCF, was questioned twice about its apparent failure to hire doctors to review the claims, once in June 2016 and another in March 2018.
An investigator's attempts to investigate the 2018 complaint were hampered by allegations that HCF was concealing evidence – a claim that HCF is now rejecting.
HCF's behavior prompted the investigator to raise the case with his superiors, but he was reported to have been "over-invested" and to leave the case in peace.
When he persisted, he was left out and was told that he could no longer investigate releases of pre-existing conditions. The documents consulted by Guardian Australia confirm that the investigator was asked to stop prosecuting such cases, although the ban was lifted four months later.
The whistleblower said the evidence strongly suggested systemic problems at the industry level. This should have triggered a broader investigation by the Commonwealth Ombudsman, he said.
"I believe that, in view of the alarming developments between Bupa and NIB and the suspicious refusal of HCF to provide evidence, the Ombudsman had sufficient grounds to carry out what is known as an investigation" of his own. initiative "to determine the extent of the problem. "
In a statement, the HCF said that it had complied with all requests from the Commonwealth Ombudsman. The insurer also denied any suggestion that it did not meet the legal requirements for the appointment of doctors.
"HCF has responded comprehensively to all questions regarding PEC [pre-existing condition] to the ombudsman, and nothing has been done about it, "said a spokesman. "HCF fully respects and respects its obligations under the legislation."
Documents reveal that HCF has been questioned twice by the Commonwealth Ombudsman about his apparent failure to hire doctors to examine health insurance claims. Photo: Mick Tsikas / AAP
In the meantime, NIB acknowledged in a statement to Guardian Australia that it had not appointed doctors to examine all cases involving pre-existing medical conditions.
But a spokesperson said that this only happened when the insurer felt that the client's treating physician was giving him "very clear" advice on the onset of symptoms.
NIB stated that it changed its processes in October 2018 to solve the problem.
The company said it has also reviewed all potentially compromised releases in the last seven years and is now refunding the affected customers.
"As part of this review, we identified a small number of people who had their applications rejected on the basis of an erroneous decision regarding a pre-existing condition," said the spokesman.
"Our designated physician reviewed each case and we promptly reimbursed them for the right to benefits and the corresponding interest. We are also trying to contact a small number of members that we have not been able to join at this point to discuss corrective actions. "
The NIB is now working with the Commonwealth Ombudsman and the Ministry of Health to "correct our process and badist members who have been adversely impacted".
"We apologize to our members who have been affected by these incorrect badessments and encourage anyone who may have concerns to contact us to discuss their personal situation," said the spokesperson.
Bupa, like the NIB, stated that she had failed to appoint doctors only in "simple" cases in which it was clear that a pre-existing disease rejection was required to be done. He stated that it was "manifestly wrong" to write to clients to tell them that their claims had been rejected as a result of a doctor's decisions.
But a spokesman for Bupa said the insurer had been fully transparent about the shortcomings and had kept regulators informed of its reforms.
"Since then, we have changed the direction of the pre-existing treatment team, provided ongoing training on compliance to relevant staff, and strengthened the resources of the medical examination function," he said. he declares.
The Commonwealth Ombudsman said that he was limited in comments on individual cases. But he declared that he was "satisfied that we have dealt with the issues that have been referred to us in accordance with our processes".
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