Finance Finance News ACCC loses court fight against Medibank

ACCC loses court fight against Medibank

In September 2014 Medibank stopped covering gap charges that exceeded the Medicare Benefits Schedule fees.
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The competition watchdog has lost its Federal Court case against private health insurer Medibank which it alleged had engaged in misleading, deceptive and unconscionable conduct.

The Australian Competition and Consumer Commission (ACCC) alleged the insurance provider failed to give notice to members about its decision to limit benefits paid for in-hospital pathology and radiology services.

The ACCC said the conduct affected most policies in place since January 1 2012.

After that date, Medibank had agreements with pathology and radiology providers, setting out that where those providers charged above the Medicare Benefits schedule fee, Medibank would pay the difference.

From September 1, 2014, Medibank terminated or phased out those agreements and members have not been completely covered.

The ACCC had argued Medibank calculated that if the change was disclosed, there was a risk members would leave the insurer, damaging its brand and reputation.

But Medibank said it clearly stated in its public documentation that it paid benefits “towards” the cost of medical services and hospital charges.

It said it had never told members that it would cover all costs associated with in-hospital diagnostic services.

The court dismissed the case.

Medibank is Australia’s largest private health insurer, with 3.9 million members.