Sh5.6 billion teachers’ medical cover cancelled

NAIROBI: Up to 288,000 teachers will have to wait longer for their much-fought-for medical scheme after their employer cancelled the tender it had awarded an insurance firm.

The Teachers Service Commission (TSC) and Aon Kenya Insurance Brokers Limited are due to appear before the Public Procurement Administrative Review Board (PPARB) tomorrow, to argue their case for and against the nullification of the Sh5.6 billion tender that would have seen teachers enjoy outpatient, inpatient, dental and optical services.

Under the deal, the inpatient cover ranged from Sh350,000 to Sh1 million for the lowest paid and highest paid teachers respectively. The Kenya National Union of Teachers (Knut) and the Kenya Union of Post Primary Education Teachers (Kuppet) are angry at the turn of events, and have warned TSC against delays in implementing the medical cover.

Letters of correspondence between TSC, Aon Kenya and the teachers’ unions reveal an intricate process that has also caught some stakeholders unawares.

In a letter dated January 16, 2015, TSC cites conflict of interest among a raft of issues to terminate the tender award to Aon.

“Failure to meet specifications contained in tender document, for instance, the tender documents required service providers to demonstrate and provide a biometric infrastructure with member identification solution that identifies members through finger capture and enables members’ utilisation monitoring and reporting. The costs of these solutions were to be borne by the service provider and not the procuring entity,” reads the letter signed by TSC Secretary Gabriel Lengoiboni.

The commission is also uncomfortable with administrative cost of the cover that is close to Sh1 billion and wants the cost revised.

TSC accuses Aon of varying specifications of maternity, optical and dental components from Free for Service Capitation.

“As you are aware, changing this model would amount to varying tender specifications contrary to the Public Procurement and Disposal Act and Regulations,” TSC contends.

But Aon insisted TSC awarded it the tender because it met all the specifications as per the tender documents.

“No doubt the tender was fairly awarded. What we see is misrepresentation of facts, which we are sure shall be resolved soon,” said Joseph Onsando, Aon Kenya Managing Director.

He said Aon Kenya sought the intervention of the PPARB because “termination of the tender was unfair”.

RAISE QUESTIONS

“No firm complained and we felt the review board is well placed to mediate. We cannot reveal more details because Aon is bound by the clients’ confidentiality rule. We still have a good relationship with our client,” he said.

Knut Secretary General Wilson Sossion said: “We are not aware of the termination because as a union we had approved the tender process during the consultative committee meeting last year.”

He said TSC sought the union’s views last year on the insurance firm and the procurement process.

“We approved Aon and even tabled the same during our Annual Delegates Conference. As far as we are concerned the contract should have been signed and implementation process at an advanced stage,” he said.

“Once we see the termination letter we shall respond accordingly,” said Sossion.

Kuppet Secretary General Akelo Misori warned TSC against floating “flimsy excuses” to deny teachers medical cover.

“The commission took us through their own procurement procedure. It is ironical to come late in the day to raise questions we had asked earlier as Kuppet. This is unfortunate indeed,” said Misori.

It is claimed the cancellation was occasioned by disagreements between the commissioners and the TSC’s management.

“The insurance firm is caught in the middle because some of the commissioners want to bring their firm to run the medical scheme,” alleged a source who asked not to be named because of the sensitivity of the matter.

But other critics of the Aon deal question why teachers would be required to pay for identification cards at a collective cost of Sh280 million instead of the insurer providing the same.

Further, there are questions why teachers are required to pay Sh100 whenever they visit a hospital, and spend Sh10 for mobile phone short text message (SMS) to confirm subscription to the medical cover.

Misori Wednesday asked TSC not to use conflict of interest as an excuse to deny teachers their right to comprehensive medical cover.

“The commissioners must ensure they are clean on this matter. That is teachers’ money and they want medical cover immediately. We questioned the procurement process last year and TSC assured us that it was above board,” said Misori. “Why do they terminate it now?”

Documents seen by The Standard indicate that co-pay, biometric solutions, capitation and fees for service components are at the centre of contention. Other factors are formal undertaking by the National Treasury and risks in the scheme. TSC is opposed to co-pay payment as teachers would have surrendered their medical allowance.

Details of the medical cover entered between Aon Kenya and TSC show teachers should enjoy an inpatient cover of between Sh350,000 to Sh1 million graduated per job groups.  All outpatient services would be free. Maternity cover has been fixed at Sh75,000 annually.

There is a group life cover that ranges between Sh300,000 to Sh700,000, graduated across job groups. Last-expense cover has been pegged at a flat rate of Sh100,000.

“The maximum liability as regards pre-existing and chronic conditions and HIV and Aids conditions would be limited to the specified amounts under inpatient limits,” reads the summary.

The documents show that teachers would seek medical treatment across hospitals in East Africa. Principal members would be allowed to enlist five other members, bringing the total number of beneficiaries to six, say the documents.

The scheme if implemented, would have teachers and their kin enjoy inpatient and outpatient services, maternity, dental, optical, emergency evacuation and psychiatric and counselling services.