The consumer watchdog has launched Federal Court proceedings against NIB over allegations the health insurer failed to tell customers they were suddenly liable for out-of-pocket costs for eye procedures.
The Australian Competition and Consumer Commission on Tuesday said it believes NIB contravened Australian Consumer Law in 2015 when it failed to give members advance notice of a move to remove certain eye procedures from a program under which the insurer paid gap amounts to doctors.
The ACCC alleges that NIB removed the eye procedures and some other services from its MediGap Scheme in August 2015, with elderly patients among those most affected.
"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.
"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 that NIB asked a doctor from Newcastle Eye Hospital not to communicate with NIB members or the media after he wrote to his patients informing them of the change and their right to switch insurers.
NIB, whose shares fell more than three per cent at the start of trade on Tuesday, said it will 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 ASX.
"NIB has worked collaboratively with the ACCC throughout its investigation and has already taken steps to redress many ACCC concerns."
At 1101 AEST, NIB shares were down 19 cents, or 3.53 per cent, at $5.20.
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