Healthcare is a theme that is delivering Credit:FDC Under the scheme, members could avoid out-of-pocket costs by going to participating doctors, who received an additional payment from NIB to cover their fee. On August 17, 2015, NIB removed certain eye procedures from the scheme. The ACCC alleges that NIB had breached consumer law by representing to members that eye procedures were covered when they were not – including by paying gap amounts in the years prior to the move. It also said that NIB promised to notify members of changes that would reduce their access to benefits.

ACCC Chair Rod Sims. Credit:Pat Scala "Consumers have a right to be informed of important changes to their insurance cover in advance, as these changes can result in very large financial consequences at a time when consumers are at their most vulnerable," ACCC chairman Rod Sims said. NIB, Australia's fourth largest health fund with 8.1 per cent share of the market, said it rejected the claims and would "strenuously defend" itself. The ACCC said it was "unconscionable" that NIB management had, at one stage, identified more than 400 members who would be seriously affected by the changes and realised it "probably ought to proactively communicate" with them, but it chose not to. It said after an eye doctor began alerting his patients to the MediGap changes and reminding them of their right to switch to another insurer, NIB "requested a commitment" from his employer – a Newcastle hospital – to not tell anyone, including its members and the media.

It's understood other procedures were removed from the scheme, but Mr Sims said the commission chose to focus on eye procedures - including an injection into the eye to stop blindness – because they largely affected the elderly and therefore vulnerable. "It adds to the issue of unconscionability, because vulnerable, repeat customers were going into hospital one day to get treatment which was fully covered, and then heading back to find an out-of-pocket cost," he said. Mr Sims said at its core, the NIB case was similar to the one brought against Medibank in June last year, which centred on its alleged failure to tell policyholders that it had slashed coverage on simple medical tests conducted in hospitals, such as blood tests and Xx-rays. He said he was "disappointed" by the industry's pattern of behaviour. "It seems a number of private health insurance providers insist that following the Private Health Insurance Act means they can otherwise do as they like," he said.

"They've improved a bit, but we are disappointed with how the private health insurance industry as a whole relate to their customers." NIB said it had acted "lawfully and ethically" and has taken steps to redress the ACCC's concerns. It's understood it has reimbursed policyholders who were receiving the eye procedure on a regular basis prior to the change. "One of the objectives behind the limited changes made to MediGap was principally about improved clinical practice," the spokesman said. "As this matter is now before the Federal Court, we are unable to make any further comment on the allegations."

If found guilty, NIB will face penalties of $1.1 million per breach of the Australian Consumer Law. The ACCC said 10 policies were affected by the MediGap Scheme changes: Basic Plus, Family Basic Saver, Family Plus, Hospital Plus, Just Hospital, Mid Plus, Premier Plus, Top Cover, Young at Heart Mid and Young at Heart Top. It is seeking declarations, pecuniary penalties, injunctions, findings of fact, compliance program orders, corrective notices and costs. Savvy Consumer - Interact with us on Facebook

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