11 July 2019: Private Health Insurance Ombudsman’s statement about pre-existing conditions complaints

Private Health Insurance Ombudsman’s statement about pre-existing conditions complaints

Although the Private Health Insurance Ombudsman (PHIO) investigates in private and does not comment on individual matters, the Office notes the recent media coverage about private health insurers and pre-existing condition (PEC) complaints, and we provide some background information about our role.

The Private Health Insurance Ombudsman (PHIO) was merged into the Office of the Commonwealth Ombudsman (the Office) in 2015. In this role, our function is to protect the interests of private health consumers. This includes investigating complaints from consumers about pre-existing condition (PEC) decisions and ensuring the PEC rules have been correctly applied by the insurer. The Office acts as an independent third party when dealing with complaints about PEC waiting periods.

PHIO investigates 4,000 private health insurance matters a year, 300 of which involve PEC decisions by insurers. The Office regularly publishes information about complaint issues for the industry and consumers. Insurer responsibilities in making PEC determinations has been regularly covered in the Private Health Insurance Ombudsman Quarterly Bulletins.

PHIO process for PEC complaints

When the Office receives a complaint from a member about the application of PEC waiting periods, our process is to request copies of relevant documentation including:

• Medical certificate from the member’s GP.
• Medical certificate from the member’s specialist.
• The assessment and decision from the insurer’s medical advisor.
• The outcome letter/email from the insurer to the member.
• Any further information that the medical advisor has used to reach their decision e.g. hospital admission notes, specialist referral letters, medical records.

In some cases, some of this information may not be available, for example in emergency cases there may be no GP or specialist notes and the insurer may rely on hospital admission notes instead.

The Office’s PHIO case officer will assess the information provided by the insurer and will either:

• Finalise the complaint assessment and advise the complainant and insurer of the outcome.
• Seek guidance on the complaint through discussion at a PHIO case meeting.
• Escalate the complaint and seek guidance from PHIO management on how best to progress the complaint, including whether the insurer has made the decision in accordance with the Act.

Steps taken by the Office to finalise PEC complaints:

• If our assessment concludes that the PEC rules were correctly applied by the insurer, the case officer will write to the complainant and the insurer notifying of our decision and advising that the complaint will be finalised.
• If our assessment suggests the PEC rules were not correctly applied or the case is complex/ambiguous, the Office will seek the complainant’s permission to send the case to an Independent Medical Advisor (IMA) for review:
  • If the IMA agrees that the insurer has correctly applied the PEC rules, the case will be finalised.
  • If the IMA does not agree that the insurer has correctly applied the PEC rules, our case officer will write back to the insurer requesting their medical practitioner reconsider the case.

In making determinations about complaints about the PEC waiting period, the Office ensures the waiting period has been applied correctly and that the fund and hospital have complied with the Pre-Existing Condition Best Practice Guidelines. In circumstances where individual complaints highlight systemic issues with the application of the private health insurance regulatory framework, the Office may provide feedback to the insurer in our complaint finalisation correspondence, or the Ombudsman may initiate an own motion investigation or refer the matter to the regulator, for PEC matters this would be the Department of Health.

In the case of PEC complaints, as in many areas of the Office’s work, we use longstanding information gathering powers to confirm insurer responses that medical practitioners are making PEC assessments. In September 2018, PHIO’s powers were increased to include an inspections power in relation to insurers. We have not yet exercised this power but could do so in the event that we have reason to suspect that appropriate documentation is not being provided to us.

Recent media coverage

While the Office is confident that PEC matters referred to in recent media articles have been appropriately dealt with in accordance with our processes, we continue to monitor PEC matters with interest and investigate complaints.

For more information about the Ombudsman’s role in PEC cases, please read our factsheet.