The board and chief executive of the National Hospital Insurance Fund (NHIF) are locked in a vicious fight over the lucrative secondary school medical cover whose implementation has been shrouded in controversy.
Board chairman Lewis Nguyai and CEO Peter Kamunyo have differed over the revocation of contracts for some 17 healthcare providers under the scheme, correspondence exchanged between them show.
The NHIF audited contracted healthcare providers between February and March 2022, which Dr Kamunyo says in documents seen by Business Daily, found irregularities with respect to the Comprehensive Secondary School Students Medical Scheme, popular as EduAfya.
Dr Kamunyo (left) says that acting on the investigative reports, he cancelled the contracts of the providers, a decision that the board has challenged on grounds that it was beyond his powers.
“In view of this, the NHIF has deferred offering you the Health Care Provider contract for the contracting cycle 2022-2024 on the basis of the investigation reports,” he said in the letters dated August 30, 2022.
Sources familiar with the matter say Mr Nguyai has since ordered Dr Kamunyo to reinstate the facilities on the grounds that the CEO unilaterally terminated them without following due process.
The affected healthcare facilities wrote a protest letter to Mr Nguyai, arguing that the NHIF CEO failed to provide them with details of the alleged irregularities.
Under the NHIF Act, revocation of contracts for healthcare providers is vested in the board.
The law requires that the board informs the healthcare provider in writing of the intended revocation giving reasons for the decision, to which the facility in question should respond in writing within seven days.
The board is then required to publish the names of the healthcare provider whose contract has been terminated in the Kenya Gazette and at least three newspapers with nationwide circulation.
Mr Nguyai reportedly says the NHIF CEO failed to follow the procedures. Dr Kamunyo had not responded to our queries by the time of going to press. The EduAfya scheme controls billions of shillings given that the government pays premiums of Sh1,350 for each pupil in public schools.
The scheme was unveiled during former President Uhuru Kenyatta’s second term in office and was part of the Jubilee administration’s Big Four agenda of offering universal health coverage (UHC).
To implement the scheme, the Ministry of Education contracted the NHIF to offer medical insurance to learners for the duration of their study to ease the healthcare burden on parents and guardians.
Under the plan, the government pays a premium of Sh1,350 that is deducted from the learner’s capitation to allow them to access outpatient, dental, inpatient, optical, emergency, road rescue and overseas treatment.
The money is part of the Sh64.4 billion allocated for free day secondary education for the year to June 2023.
The medical cover caters to any student who is in a public secondary school captured under the National Education Management Information System (NEMIS) database and registered with the NHIF.
The differences between the NHIF management and board could affect the implementation of UHC, at a time some 660 hospitals have threatened to withdraw outpatient services in protest over capitation rates and delays in signing contracts.
The facilities under faith-based organisations and the Rural Private Hospitals Association (RUPHA) say the NHIF branch offices are asking for invoices quoting Sh1,000 rather than the agreed Sh1,400 per beneficiary per year.
Similar wrangles at the NHIF were witnessed in 2012 when then chairman Richard Muga suspended chief executive Richard Kerich and five other officials.
Part of the problem at the time were claims that the NHIF’s top managers had paid a private company running clinics the insurer had not seen or inspected.
Then Prime Minister Raila Odinga later suspended the entire board – overturning a decision by Medical Services minister Anyang Nyong’o— to pave the way for a forensic audit.