Government defends Taifa Care digital fee amid claims row

CS Health Aden Duale

The Ministry of Health has defended the controversial service fee charged on claims processed through the National Digital Health System, insisting the levy is lawful, transparent and paid to a government agency—not a private company.

The response follows allegations that a two per cent fee deducted from claims processed through the Taifa Care digital platform was benefiting a private firm and that public funds were being channelled outside the legal framework governing the Social Health Authority.

In a statement issued Tuesday, Health Cabinet Secretary Aden Duale dismissed the claims, saying they had created "the wrong impression" about how the digital health system operates.

"The report creates the impression that public money is being paid to a private company outside the law. That impression is wrong," Duale said.

He maintained that Kenya's transition to a fully digitised health financing system is anchored in law, arguing that the Social Health Insurance Act requires all processes, including member identification, pre-authorisation, claims management and payment of claims, to be conducted through a secure digital platform.

"You cannot register, verify and pay for the healthcare of every Kenyan on paper," he said.

At the centre of the controversy is a two per cent service fee charged on transactions processed through the Health Information Management System (HIMS), with critics questioning its legality and the role of private technology firms involved in the platform.

However, Duale said the fee is expressly provided for under the Digital Health Data Exchange Component Regulations, 2025, and is capped at Sh5,000 per transaction.

He said the charge is a service fee for using the government's digital health infrastructure and not a commission on payments made to healthcare providers.

According to the CS, the fee is paid to the Digital Health Agency, a state corporation established under the Digital Health Act, 2023, to develop and manage Kenya's integrated digital health system.

"No private entity receives, holds, controls or disburses funds due to healthcare providers," Duale said.

He added that only the Social Health Authority has the legal mandate to review, process and settle claims submitted by hospitals under the Social Health Insurance Act.

The Health CS also sought to assure healthcare providers that all revenue collected by the Digital Health Agency is treated as public money, audited by the Auditor-General and accounted for through Parliament.

Responding to concerns over the involvement of private firms, Duale said the digital platform was procured through a government contract awarded to the Safaricom Consortium in accordance with the Public Procurement and Asset Disposal Act, which permits the use of subcontractors.

He argued that subcontracting the development and maintenance of the system does not transfer public funds or claims payments to private entities.

Duale further said the regulations establishing the service fee underwent regulatory impact assessment, public participation and parliamentary approval before being gazetted in April 2025.

The dispute is now before the High Court, where the Cabinet Secretary has been named as a respondent.

"The government will file its full response before the court, and I will abide by its determination. I will not litigate this matter in the press," he said.

Even as the legal challenge proceeds, Duale said he has directed the Social Health Authority and the Digital Health Agency to continue engaging healthcare providers to address concerns over claims processing and improve the digital health system.

"Where the system can be improved, we will improve it," he said, adding that the objective of the reforms remains to strengthen Universal Health Coverage and ensure every Kenyan can access healthcare through a secure and accountable digital platform.