State plans new hospital categories for SHIF


Cabinet Secretary, Ministry of Health Susan Nakhumicha (Right), National Health Insurance Fund (NHIF) Chief Executive Officer Elijah Wachira (Centre) and Chief Executive Officer Kenya Medical Practitioners and Dentists Council (KMPDC) David Kariuki before the National Assembly Departmental Committee on Health at the Bunge Towers Nairobi on February 15, 2024. PHOTO | DENNIS ONSONGO | NMG

The Ministry of Health will re-categorise all hospitals before they are empanelled by the Social Health Insurance Fund (SHIF) in a bid to eliminate fraud that has seen taxpayers lose millions of shillings through fictitious claims against the National Health Insurance Fund (NHIF).

Health Cabinet secretary Susan Nakhumicha said the Kenya Medical Practitioners and Dentist Council (KMPDC) will be the only body to inspect and categorise all levels of hospitals before they are contracted by SHIF.

She told the National Assembly’s Health Committee that several hospitals have been contracted by the NHIF at levels they should not be and are, therefore, claiming money from the fund at rates they are not entitled to.

“We have found that there are hospitals that are categorised as Level Four when they are Level Two,” said Ms Nakhumicha.

“Under the new Social Health Authority (SHA) Act, the KMPDC (Kenya Medical Practitioners and Dentists Council) will be the lead agency that will inspect, categorise and license the hospitals before they are onboarded by the SHIF for payment of claims. This will address the issue of fraud.”

The Health Act has six categories of hospitals, with Level One being community facilities run by certified medical clinical officers, Level Two (health facilities), Level Three (Health centres), Level Four (district hospitals), Level Five (district referral hospitals) and Level Six (national referral hospital).

Ms Nakhumicha told the committee that it is investigating fraudulent claims by several hospitals that NHIF has paid millions of shillings.

She said between July 2022 and December 2023, an internal audit directorate conducted investigations on 31 healthcare providers and found that there were breaches of contractual obligations.

She said the reports have been prepared and submitted to the audit committee of the NHIF board, but the full board has yet to approve the recommendations.

“Some of the recommendations were to refund fraudulent claims paid, stop payment on claims in process and for the board to decide on the fate of the affected healthcare providers in line with clause 16.6 of the contracts, whether to suspend the healthcare providers or terminate the contract,” said Ms Nakhumicha.

“In view of the transition of the National Health Insurance Fund to the Social Health Authority, the NHIF board has not met to deliberate on the reports.”

She told the committee, chaired by Endebess MP Robert Pukose, that the Attorney General had issued advice that during the transition period, the NHIF board should only deal with the winding up of the fund and not any other matter.

“This matter is, therefore, left to the SHA board to deliberate on and give direction and way forward to the affected healthcare providers,” she said.

Health PS Harry Kimtai said no hospital would be empanelled by the SHA without clearance from the KMPDC.

“In case of fraud, the KMPDC will be held accountable under the new law. Before, no one was held accountable for fraud. The SHA brings accountability,” he said.

The committee, which concluded its inquiry on Wednesday, investigated how several healthcare providers colluded with NHIF officials to fleece the national insurer of millions of shillings.

NHIF chief executive Elijah Wachira told the committee that Beirut Pharmacy and Medical Centre submitted 1,706 claims between January 2022 and June 2023, of which 1,592 were paid amounting to Sh153.43 million.

"Monitoring conducted at the sampled employers revealed that 26 employees of Employer A were confirmed by the employer to have been at work throughout the period of admission," said Mr Wachira.

"As a result, 3.65 million in paid claims were fraudulent. Beirut Pharmacy and Medical Center should repay Sh15.49 million paid on fraudulent claims and 114 claims totalling Sh13.19 million should be rejected."

Mr Wachira said the results of the investigation into Amal Hospital showed that it submitted 504 claims, of which 267 worth Sh34.65 million were paid. He said 237 claims worth Sh32.25 million were stopped by the investigations.

He said seven employees of one employer were found to have been at work at the time the hospital claimed admission resulting in a loss of Sh910,000.

Mr Wachira said the audit committee recommended that Amal Hospital should pay NHIF Sh7.6 million and the claims totalling Sh32.25 million be rejected.

He said they also recommended that Joy Nursing and Maternity Hospital reimburse NHIF Sh73.96 million.

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