Governors have lost the fight to control Sh3.4 billion free maternal healthcare funds.
The fund has instead been placed under the jurisdiction of the National Health Insurance Fund (NHIF).
The Division of Revenue Bill 2017 clears the way for NHIF to manage the funds while denying the county chiefs a key demand that had put them at loggerheads with the national government.
Under the bill set for tabling in the National Assembly, the money will be transferred from county governments and reimbursed by NHIF to individual hospitals providing maternal care to thousands of women every year.
"The national government share includes Sh3.4 billion, which is a special grant to the National Health Insurance Fund (NHIF) for free maternal healthcare, to be paid as reimbursements," reads the bill.
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County governments will now only manage Sh303.3 billion of the country's total shareable revenue, with the national government managing Sh1.2 trillion.
It is estimated that the maternal health funds will prevent more than 2,000 women and 30,000 child deaths annually.
Governors had opposed the transfer of the funds to NHIF on the grounds that it would make access to the maternal services bureaucratic. They also charged that the scheme was one of the ways devised by the national government to undermine devolution.
But backers of the NHIF plan argue that ring-fencing the funds will cushion the provision of maternal health services from political interference and ensure the billions trickle down to the most vulnerable.
In October, President Uhuru Kenyatta said the plan would improve efficiency in the management of maternal health and strengthen NHIF's role in healthcare financing.
NHIF cards will enable individual family members to enjoy both inpatient and outpatient services from hospitals registered under the free maternal health scheme.
The bill has also set money aside for conditional grants due to county governments in the next budget.
This includes money for leasing medical equipment (Sh4.5 billion), compensation for user forgone (Sh900 million), Level 5 hospitals (Sh4.2 billion), construction of county headquarters (Sh605 million) and rehabilitation of village polytechnics (Sh2 billion).
The bill is meant to ensure equitable division of revenue between the national and county governments.
