It admits that shortfalls - where claims are only part-paid - and outright rejections are the biggest area of complaint from members.
Bupa deals with 8,000 claims a day and pays out more than pounds 2m. However, 11.6 per cent of claims are not met in full, and 5.8 per cent are turned down. Some 82.6 per cent are fully paid.
In Upbeat, its magazine for members, the insurer says: 'Bupa is keen to ensure that claimants receive their full entitlement, but with a pay-out of over pounds 2m a day, Bupa cannot pay beyond a claimant's entitlement without subscriptions spiralling.'
Bupa deserves credit for being so open about its rejection rate - information that other insurers are not keen to volunteer. Private Patients Plan, the second-largest insurer, was unable to supply any figures.
Western Provident Association can only estimate its rejection and shortfall rates. Julian Stainton, its managing director, said: 'We estimate less than 5 per cent of claims we receive are rejected, and as a rough guess, across the board our shortfalls are less than 3 per cent.'
Norwich Union says about 3.5 per cent of claims are rejected in full or in part. The company operates a pre-notification system - members get authorisation from the company before treatment commences. It can then weed out invalid requests at the outset and keep the rejection figures low. A spokesman said: 'Pre-authorisation is not a requirement but we do recommend it.'
Bupa members always believed that private insurance was an open cheque-book for all their medical bills. However, the company believes being upfront is the best policy. Arthur Large, managing director of Bupa membership, said: 'We have stopped using words like 'with Bupa you get complete peace of mind'. We have revamped all our literature and it now states quite clearly what is not covered. It will be a measure of our success when we get down our shortfalls and rejections.'
Bupa also recommends that members contact the customer service centres before they embark on treatment. But there is no compulsion on the standard BupaCare product. Mr Large said: 'We do not like the idea of pre-authorisation. I am somewhat loath to introduce it.' PPP also recommends this, but with no obligation, apart from on its psychiatric protection benefit scheme.
The main reasons for rejection by all the insurers are that the cover has lapsed or the complaint is the result of a pre-existing condition - an exclusion that angers many subscribers. There is also a lot of misunderstanding about cover for bills abroad and the eligibility of alternative treatments, such as homoeopathy.
According to Bupa, outright rejection causes less aggravation than part- payment. Mr Large said: 'Shortfalls are very irritating. The main problem is the consultants. What we want to do is make them more upfront.
'If they would say 'I charge pounds 1,000 and that is pounds 200 above the Bupa maximum,' then at least it would not come as a rude shock at the end.'
There are also shortfalls on hospital bills where people go to a high- band hospital when they are covered for only the cheaper ones. Some people also try to claim for faxes and telephone calls made in hospital.
Policies that have monetary limits for treatments also lead to problems. How many people will jump off the couch during their treatment and tell the consultant they have just gone over their insurer's annual limit?
People should check with the insurer in advance whether their treatment will be covered, and for how much.
Some shortfalls and rejections are attributed to subscribers manipulating the system. Mr Large said: 'We have had one claim for a Mr Fido Brown. When we investigated, it was for injections for the dog at the vet.
Meanwhile, Bupa is to reduce or freeze premiums on some of its schemes. The new rates take effect in January. Premiums on the low-cost policies Bupa LocalCare - which restricts the choice of hospital - and Bupa Healthchoice - the six-week-wait policy - are down by 5 per cent.
The same reduction applies to Bupa EssentialCare, which covers in-patient treatment only. A 30-year-old single male currently pays pounds 20.21. From 1 January 1994, the premium will be pounds 19.20. Norwich Union, the first insurer to introduce an in-patient-only policy, charges pounds 11.95 a month for its PersonalCare product.
For 58 per cent of Bupa subscribers with the more comprehensive BupaCare cover, there will be a premium freeze at the July 1993 level when subscriptions for some schemes were increased by an average of 9.2 per cent. Other members will face rises of 2 to 3 per cent.
Older Bupa members have good and bad news. Some members over 60 will enjoy a price freeze on the lower scales of cover. But others on the higher scales will suffer a rise of between 3 and 6 per cent.
Bupa says it will be introducing new services for the older members, aimed at providing more cost-effective treatment and better-targeted benefits.
Mr Large also said Bupa could soon be introducing a policy for alternative medicine. And the million-dollar question - is Bupa going to float on the stock market?
There no outright denial from the company. Mr Large said: 'It is a rumour before its time.'
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