More than 11,400 people are set to receive a total of €423,000 from State-owned health insurer VHI.
The company yesterday said it was making the payments after discovering it had short-changed 11,458 members when paying for treatments they received in two private Dublin hospitals, the Blackrock Clinic and the Mater Private.
The average payment is €37, although a spokeswoman told The Irish Times yesterday that more than 80 per cent of the amounts involved were less than this.
The payments include interest and the company said it began issuing the cheques and sending them to members yesterday. A majority of the cases date back to the years 1996-2000.
The mistakes came to light following a query from the Health Insurance Authority (HIA).
A VHI statement said that "it came to light that cover under Plan A and Plan B in respect of some procedures in the Blackrock Clinic and Mater Private Hospital did not meet the State's minimum benefit requirements in every instance.
"As soon as these underpayments were identified, VHI Healthcare initiated a detailed review of its entire product range."
State minimum benefit regulations demand that the health insurer must pay either 60 per cent of the hospital charge or €171.42, whichever is the lesser sum.
Under Plan A and Plan A Options, the VHI only paid 35 per cent of the charges. This meant that where the bill was €100, the VHI should have paid €60, but instead it only paid €35.
Similarly, under Plan B, the insurer only paid 50 per cent of the charge. The company is only obliged to make the payments where the percentage paid was less than €171.42.
The company has hired legal firm Arthur Cox to carry out an independent investigation to establish how it underpaid its members.
