'Generous' Southern Cross gives customers a little tip

By PAUL YANDALL

Southern Cross will overpay some customers so it can clear a multi-million-dollar backlog.

In a letter dated last Thursday the troubled insurer, which has been beset by disgruntled clients who have waited months for their claims to be settled, told customers it was relaxing its rules.

In some cases for surgical claims that might mean customers received more money than they had claimed. Anything extra would be a one-off payment - and future claims would be processed in the normal manner.

The letter, signed by the general manager of operations, Robin Denunzio, was obtained by the Herald from one of the insurer's customers, who said he had been paid about $5 on top of a $400 claim.

It stated: "In order to process your claim without further delay we have used discretion to relax some policy rules mainly in respect to surgical claims. Any amount paid to you in excess of your current entitlement is paid on a one-off (ex gratia) basis."

It goes on to state that the insurer was "committed to reducing the current claims backlog, and any future claims submitted will be processed in the normal manner and in accordance with your normal policy rules".

The customer, who did not want to be identified, said the bulk of his $400 claim was for dental bills and he was surprised to see the extra amount because there was no surgical component.

"I've no idea of how the extra [amount] was arrived at. It seems they've put it through as quickly as they can and just shovelled it out to get it away quickly."

Southern Cross, the country's largest health insurer with 810,000 members, has had problems paying clients since it purchased its prime competitor, Aetna Health, last year.

Board chairman Dr Hylton LeGrice said it was normal for the insurer to be generous to its customers and there was nothing unusual in ex-gratia payments being made "because of that generosity".

Despite the letter linking extra payouts to the backlog, Dr LeGrice said the connection was "media speculation" and ex-gratia payments were often made if there were special circumstances surrounding a claim.

Dr LeGrice is expected to meet Health Minister Annette King in Wellington today.

But he said reports of a meeting were "pure media speculation" and he would not confirm that one would take place.

nzherald.co.nz/southerncross