Bupa aged care ordered to pay $6 million for services not provided, Federal Court rules

The Federal Court has ordered aged care provider Bupa to pay $6 million in penalties and millions more in refunds for residents who paid thousands of dollars a year for services they never received.

The ACCC pursued Bupa for misleading and false representations to aged care residents for extra services the regulator said were not provided in full, if at all.

The consumer watchdog targeted 20 Bupa aged care homes in the case: 10 in New South Wales, seven in Victoria, two in Queensland and one in Tasmania.

The ACCC argued the company offered packages which were supposed to include a range of extra services including air conditioning in all rooms, travel escorts for residents who wanted to leave the facility, and smart rooms for dementia patients.

A golf ball sits on the edge of a hole
Golf trips were offered at one facility as part of an extras package but never provided.(ABC News)

Some facilities offered luxuries such as dry cleaning valet services, golf days or the option for a resident to order their favourite meal.

In all, the ACCC identified 95 extra services from Bupa in its case.

In a Federal Court ruling on Tuesday, Justice Debbie Mortimer ordered Bupa to pay penalties of $6 million for the transgressions, which took place between 2011 and 2018.

She also ordered the company to finalise its redress scheme with residents, which is expected to cost $18.3 million.

The scheme began in July 2018 and has already paid out $14.1 million.

“The offer of these services may have played a part in residents and their families choosing a particular Bupa facility,” ACCC Chair Rod Sims said in a statement.

Elderly walking frame generic
Up to 3,000 aged care residents could have been affected by lower-quality care.(Unsplash: rawpixel, file)

“These vulnerable residents and their families may not have been aware that these extra services were not being provided, although they were being paid for.”

In one aged care home in Victoria, for example, residents were offered private telephones for their rooms, their choice of three hot meals a day and their favourite meal at least twice a week.

None of these were provided.

Golf trips from that facility were also missing from the services provided despite being part of an extras package.

The court ordered the company must also publish a compensation notification prominently on its website.

Up to 3,000 residents may have received lower-quality care than they paid for

The judgement revealed Bupa residents paid $55 million for extras packages over the time period, which included some services that were provided.

“I accept that the contraventions were not the result of any deliberate intention to breach (the law) or any deliberate attempt to mislead affected residents,” Justice Mortimer wrote in her judgement.

Instead, she said Bupa had “insufficient compliance systems and controls in place” to detect when extra services were being provided or not.

While 692 residents were thought to have been directly involved in the company’s actions, as many as 3,000 may have been affected because clients overall received a lower quality of care than they had come to expect, she said.

The outside of the Federal Court in Melbourne.
Federal Court judge Justice Debbie Mortimer accepted Bupa’s contraventions were not a deliberate attempt to mislead residents.(ABC News: Darryl Torpy, file)

“The loss is therefore more than a financial loss.

“It is a loss of services that affected residents (or their families) deliberately sought out, to improve their quality of life, to assist them in finding interest and satisfaction in their residential circumstances, and to make the later parts of their lives more comfortable and enjoyable.

“Bupa’s contraventions denied affected residents such things.”

Justice Mortimer also noted Bupa had reported itself to the ACCC in 2018, after receiving a complaint from a resident in November 2017.

In a statement, Bupa said it had strengthened its internal processes and training since the breach.

“Having a family member enter aged care is often a stressful time, and we are deeply sorry for our mistake, which impacted some of our residents and their loved ones,” Bupa executive Suzanne Dvorak said.

The company says it is continuing to try to contact the families of those residents now deceased who might be eligible to take part in the redress scheme.

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