ACCC takes Nib to court

failed to give its members advance notice of a move to remove certain eye procedures from a program where the insurer paid gap amounts to doctors, the commission said yesterday.

The ACCC alleges Nib removed the eye procedures and some other services from its MediGap Scheme in August 2015. Elderly patients were among those most affected, the watchdog said.

Shares in the health insurer tumbled more than 4 per cent in the wake of the revelations yesterday, wiping more than $100 million from its market value.

“Consumers have a right to be informed of important changes to their insurance cover in advance,” ACCC chairman Rod Sims said.

Such changes could result in “very large financial consequences at a time when consumers are at their most vulnerable”, Mr Sims said.

“Insurers should not expect consumers to bear the responsibility of making independent inquiries to find out about important changes made unilaterally by insurers.”

The ACCC also alleges Nib asked a doctor from Newcastle Eye Hospital not to communicate with its fund members or the media after he wrote to his patients informing them of the change and their switch insurers.

The health insurer said it would strenuously defend the claims.

“Nib rejects the position being taken by the ACCC and believes it has acted lawfully and ethically,” the company said in a statement to the stockmarket.

“Nib has worked collaboratively with the ACCC throughout its investigation and has right to already taken steps to redress many ACCC concerns.”

Based in Newcastle, Nib – once known as Newcastle Industrial Benefits – is the only listed Australian health insurance company other than heavyweight Medibank.

Nib shares fell 4.6 per cent after the commission announced yesterday that it was launching proceedings in the Federal Court, cutting its market value to $2.26 billion.