The Social Health Authority (SHA), established in October 2024 to replace the scandal-ridden National Hospital Insurance Fund (NHIF), is already grappling with widespread fraudulent activities, prompting a decisive crackdown by the Ministry of Health. Health Cabinet Secretary Aden Duale has vowed to eradicate these illicit practices, announcing that private insurers will join the government’s efforts to delist facilities found guilty of defrauding the SHA.
For over five decades, the NHIF, with its promise of affordable healthcare for millions, became a symbol of institutional failure, losing billions to fake claims, mismanagement, and internal collusion. The SHA was launched with the promise of transparency and efficiency, developed at a cost of Sh106 billion. However, less than a year into its operation, familiar patterns of fraud have re-emerged, raising serious concerns about the effectiveness of the reforms.
Recent investigations have exposed a shocking array of fraudulent activities, including ghost admissions, billing for services never rendered, manipulating bed counts, and double billing. The Ethics and Anti-Corruption Commission (EACC) previously unearthed internal fraud schemes within NHIF, involving ghost services and unauthorized system access, leading to losses of millions. An audit revealed that NHIF paid out Sh91.6 million in claims despite receiving billings for only Sh37.1 million, a discrepancy of over Sh54 million that was never explained. These scandals culminated in findings that over Sh21 billion had been looted from NHIF through falsified claims and outright theft.
In a significant move, the SHA has suspended 85 health facilities across various counties for their involvement in fraudulent activities against the national health insurance system. This includes an initial suspension of 40 facilities, followed by an additional 45. “These facilities have engaged in corruption and theft of public resources,” stated CS Duale, emphasizing that these suspensions are effective immediately and that facilities will be surcharged to recover fraudulently obtained funds. The SHA did not publicly specify the exact violations for all suspensions, but under Section 48(6) of the Social Health Insurance Act, 2023, facilities can be suspended for breaching operational, ethical, or financial compliance standards.
The fraudulent activities identified by the Ministry of Health include inflation of outpatient claims, unnecessary or coerced admissions, code sharing among medical professionals, abuse of pre-authorization systems, billing for nonexistent patients, and submitting duplicate claims. The Health Cabinet Secretary has termed these actions a “criminal operation,” with files handed over to the Directorate of Criminal Investigations (DCI) for prosecution.
Beyond the direct financial losses, these fraudulent practices undermine the integrity of the healthcare system and compromise services for genuine patients. The SHA is integrating with the government’s Digital Superhighway initiative to monitor and flag irregular activity in real-time, and the Kenya Medical Practitioners and Dentists Council (KMPDC) is expected to de-register non-compliant facilities.
Despite these efforts, challenges persist. The shift to annual lump-sum payments for SHA contributions, unlike the previous monthly option under NHIF, has raised affordability concerns, particularly for those in the informal sector. While the Hustler Fund was introduced to assist with contributions, reluctance and mistrust surrounding debt and repayment terms remain.
CS Duale, speaking in Narok on Saturday, August 30, reiterated the ministry’s commitment to working with private medical insurers to eliminate fraudulent facilities and restore transparency and dignity in the health sector. “We will not tolerate misuse of public funds or exploitation of patients. These suspensions are a clear warning to facilities that profit over ethics,” said Dr. Mercy Mwangangi, SHA Chief Executive Officer.
