Health

Interior Ministry withholds Sh400m from NHIF on audit queries

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NHIF Building in Upper Hill, Nairobi. FILE PHOTO | NMG

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Summary

  • The Interior Ministry has withheld Sh400 million meant for police insurance cover following failure by the National Hospital Insurance Fund (NHIF) to account for previous allocations.
  • Interior Principal Secretary Karanja Kibicho told Parliament that the money has been deducted from premiums that the National Police Service (NPS) is required to remit to the NHIF for provision of comprehensive medical cover for 131,816 security personnel.

The Interior Ministry has withheld Sh400 million meant for police insurance cover following failure by the National Hospital Insurance Fund (NHIF) to account for previous allocations.

Interior Principal Secretary Karanja Kibicho told Parliament that the money has been deducted from premiums that the National Police Service (NPS) is required to remit to the NHIF for provision of comprehensive medical cover for 131,816 security personnel.

The ministry entered into a Sh4.78 billion contract with the NHIF for provision of comprehensive medical insurance scheme for the Kenya Police, Administration Police and Prisons officers for the period 2017 to 2019.

The deal also included an excess of loss cover amount of Sh200 million annually to cushion police officers who might exhaust their limits.

The agreement require the NHIF to refund the excess amount to the Interior Ministry if no officer exceeds their limits in the financial year.

Auditor-General Nancy Gathungu, in the audit of Interior Ministry books of accounts for the year to June 2019, said there is no evidence that any employee exceeded the limit and therefore the money should have been refunded.

Dr Kibicho said the NHIF has not provided documents to show how it spent the excess loss of cover amount.

“We have done allot of letters to them and they have refused to respond. We have decided to withhold Sh400 million in premiums,” Dr Kibicho said.

He said the Ministry, through the National Police Service (NPS) continues to pay the balance of the premiums.

“If they get pressure from the less premiums, they will comply with our demands for them to account and we will release the Sh400 million,” Dr Kibicho told the Public Accounts Committee (PAC).

Dr Kibicho’s disclosure of the withheld premiums comes barely two weeks after the NHIF told the PAC that it had resolved the matter with the Interior Ministry.

Peter Kamunyo, the NHIF chief executive officer, told the Opiyo Wandayi-led committee that the excess of loss amount of Sh400 million was exhausted.

He tabled documents indicating that Sh205.5 was utilised for inpatient care for the lower job group, Sh9.6 million went to cater for C-section, Sh12 million and Sh8.3 million for dental.

In the 2018/19 financial year, Dr Kamunyo said the total fund utilisation was Sh237, 238,889 leaving an accumulative balance of Sh5,326,427.

“We have rejected any approach from them (NHIF). They cannot decide what excess of loss will be allocated to which police officer.

“It is the work of the Ministry, through the Inspector General of Police (IG) to tell them (NHIF) in writing that we are compassionate to this person who has exceeded the limit and please give him or her excess loss amount of say Sh50,000. Not NHIF,” Dr Kibicho said.

He said the IG must authorise them to use the excess loss cover. “Who allowed them to tap into the annual Sh200 million excess loss of cover?” Dr Kibicho asked.

Garissa Township MP Aden Duale demanded that Dr Kamunyo be recalled to explain why he misled the committee.

The NHIF was not allowed to engage in the provision of commercial insurance services to public entities and private companies, but the Treasury in a Gazette notice of April 17, 2020, exempted NHIF from the provisions of the law, effectively allowing the public insurer to engage in the insurance business.