A Western Australian living and working in the US who says her travel insurer gave an “ultimatum” to return home for breast cancer treatment, delaying vital surgery by five weeks, has lost a claim dispute while being awarded compensation for stress caused by errors in communication.

By the time she had the surgery on February 13 last year - after forgoing a US surgery date of January 5 2021 - the cancer had metastasized into her lymph nodes, she told the Australian Financial Complaints Authority (AFCA).

Hollard had recommended she return to Australia. It also offered that she could remain in the US for surgery with cover capped at $40,000.

“The insurer has the discretion to decide whether to require an insured person to return to Australia for treatment,” AFCA ruled, saying Hollard had fairly settled the claim as she was not out of pocket for medical expenses.

It awarded $3500 compensation though, saying Hollard “could have been clearer when providing the reasons for its decision,” and noting its emails held information on treatment in Sydney when she was from WA, and referred to quarantine exemptions that may not have applied.

“There is insufficient information to show the delay in surgery and treatment resulted in the worsening of the complainant’s condition. However, I do consider it caused stress and inconvenience given the seriousness,” the ombudsman said.

“The complainant has not raised concerns with the medical costs claimed. Rather, she has raised concerns with the insurer’s handling of the claim.

“I appreciate the insurer made several ex-gratia payments and tried to assist the complainant outside of its requirements under the policy. However, it is not clear to what extent it did so given it had exercised its discretion to repatriate her and needed to ensure this was medically appropriate”.

Hollard said it acted with integrity and compassion. The covid crisis in the US had worsened dramatically, and as she did not require emergency surgery it had been prudent for her to return to Australia for treatment, it said.

The policyholder said covid was “just an excuse” to avoid paying her US medical costs. She sought compensation for mental anguish, a written apology and admission that Hollard provided false or misleading information in its reasoning for wanting her to return to Australia.

She had wanted surgery in the US but said she was not in a financial position to pay costs above $40,000 by herself, and “felt she had been given an ultimatum she was unable to refuse” by the insurer.

She repatriated to Australia on January 6 last year and was released from covid-mandated hotel quarantine two weeks later. Her surgery was performed on February 13 2021.

Hollard’s “ultimatum” to return to Australia was contrary to independent medical advice, she said, and this meant her treatment was delayed, and she had to leave her support network and return to Australia homeless. She raised concerns regarding losing her job by returning to Australia and said Hollard treated her poorly and this was extremely upsetting during an already stressful time.

Her policy stated "if we determine that you should return to Australia for treatment and you do not agree to do so then we will pay you the amount that we determine would cover your overseas medical expenses and/or related costs had you agreed to our recommendation.

“You will then be responsible for any ongoing or additional costs relating to or arising out of the event you have claimed for.”

AFCA said Hollard “could have done more to explain why the repatriation to Australia was medically in her best interests,” noting she said the insurer initially agreed to the surgery and treatment in the US but later changed its mind and insisted she return to Australia.

In late December 2020, a specialist said the end of January would be the latest timeframe he would recommend for surgery and if surgery crept into February, she should have it earlier in the US. A breast surgeon stated the decision to have surgery in the US was sensible, though in a follow up call with Hollard said either location was fine.

The cancer patient said Hollard was uninformed regarding travel and quarantine requirements in Australia - including telling her she could obtain a quarantine exemption which was near impossible – and that nurses also expressed opinions that she should stay in the US for surgery, and Hollard provided no medical reason why not.

The ombudsman said while the repatriation delayed the surgery by some weeks, Hollard’s decision was not unfair or unreasonable.

“It was able to organise the repatriation and surgery within a reasonable period and there is no evidence to show it was contrary to her medical interests,” the ruling said.

See the full ruling here.