MPs unearth NHIF pay scandal

The committee said the National Hospital Insurance Fund (NHIF) paid the hospital to offer outpatient medical cover for civil servants, yet it did not have facilities as it had purported.

Meridian Medical Centre CEO Peter Wambugu appears before Parliamentary Committee on Health in Nairobi, on Wednesday. [Photo:Jenipher Wachie/Standard]

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It followed the Central Organisation of Trade Unions’ (Cotu) threat of a national workers’ strike mid this month to oppose planned increase in NHIF monthly rates.

Wednesday, members of the Parliamentary Departmental Committee on Health led by chairman Robert Monda (Nyaribari-Chache) claimed that Meridian Medical Centres and Hospitals received Sh116 million between January and March, for 19 outlets, but some of them were non-existent.

It emerged that Meridian received money from the fund on March 8, whereas several of its medical facilities opened later and that more than Sh30 million may have been paid for "ghost facilities".

fraudulent terms

The outpatient medical scheme for civil servants was rolled out in January, and NHIF was to pay suppliers at the beginning of each quarter.

Meridian CEO Peter Wambugu admitted that his Nyali and Meru branches opened doors last week, while branches in Kakamega, Malindi and Machakos were opened mid-last month. The dates for the opening of the Nyeri and Nakuru branches are not known, as relevant documents are lacking.

"We submit to you that you have received millions in NHIF cash on fraudulent terms," Monda told Dr Wambugu. According to documents seen by The Standard, Nyali branch received Sh5 million, Nyeri Sh7.3 million, Meru Sh4.8 million, Malindi 5.5 million, and Nakuru 5.1 million.

But Wambugu defended himself and his firm, insisting that the millions of shillings received from NHIF had been paid lumpsum to handle 32,000 clients and their families.

"NHIF came to us because of our spread. We gave the fund a list of areas where we are, and where we are going. If they picked areas where we are going and they gave us clients based on that, it is up to the NHIF, not us," he said.

He added: "We don’t have any list from NHIF showing how they allocated money to each of our branches. The money given to us was to provide services to a list of clients and their dependents, not individual branches," he said.

Strategic agenda

He denied knowledge of branch allocations cited by Dr Monda, saying it was not part of the signed deal.

"We have developed and grown without NHIF. We don’t open our outlets because of NHIF. They constitute one third of our clientele. Our strategic agenda is to open a clinic and a hospital in every county," said Wambugu.

It emerged that the current NHIF funding was expected to double Meridian’s annual turnover from Sh500 million to over Sh1 billion, this year.

MP Joseph Magwanga (Kasipul-Kabondo) wondered why Meridian’s Nyeri branch – with 43 registered patients – received Sh7.3 million while the Nakuru branch, which has 3,909 registered patients, received a paltry Sh5.1 million.

The hospital charges Sh2,800 per person per year to give medical services under the capitation scheme, in which money is paid in advance. Together with dependants, the hospital is to handle about 164,000 patients during the year.

Non-existent clinics

Monda alleged that Meridian was paid for unlicensed outlets, and cited the Kisumu branch that received Sh4.7 million. But Meridian officials said they have paid for the licence, which delayed.

On Tuesday, Cotu Secretary-General Francis Atwoli accused NHIF of paying insurance premiums to non-existent clinics under the civil servants’ medical scheme, a claim he used to argue against NHIF rates increase.

Other MPs at the session included Nuh Abdi (Bura), Fredrick Outa (Nyando), Thomas Mwadeghu (Wundanyi), Victor Munyaka (Machakos Town), and David Eseli (Kimilili).

Incidentally, Meridian participated in NHIF’s pilot project for the new scheme, in which it was paid Sh54 million. The committee will meet other officials of private clinics, which receive NHIF funds.