Sh20 billion lost in fictitious NHIF claims, hospitals dropped in probe

Health CS Susan Nakhumicha. [Mose Sammy, Standard]

At least Sh20 billion has been lost in fake claims through the National Health Insurance Fund (NHIF), according to Health CS Susan Nakhumicha.

The minister blew the lid in a statement Friday when she revealed that some of the fraudulent claims have been made over fake surgeries, among other fraudulent activities, by hospitals.

She said the fraudulent claims have been reported in nearly half (40 per cent) of NHIF-accredited hospitals which received capitation from the public medical insurance agency in 2023.

A report released by the CS showed most of the cases of fraud were reported in Nairobi, Meru, Nyahururu, Muranga, Kerugoya, Makueni, Tharaka Nithi, Subukia, Nanyuki, Bungoma, Chuka, and Machakos counties. 

The CS who spoke to the press at the Ministry of Health headquarters in Nairobi said the accused health facilities deceitfully activated dormant accounts of members, pushed for the payment of unwarranted cases, manufactured medical claims, and applied deceptive practices to access funds.

Most fraud was achieved by falsely indicating that some patients had undergone major surgeries, yet some of the facilities assigned are not mandated by law to perform such complex procedures. 

According to the ministry, over Sh171 million has been recovered, with some facilities yet to repay the government money amounting to Sh153,328,970.

Among the adversely mentioned facilities is Joy Nursing and Maternity from which Sh73,964,470 is yet to be recovered. Another facility, Beirut Pharmacy and Medical Centre, based in Eastleigh, is required to repay Sh15,490,00 to the State after being found to have engaged in malpractice. Other hospitals are St. Peter’s Orthopedic and Surgical Specialty – Kangemi, Afya Bora Hospital Annex Ltd in Mwea, Afya Bora Hospital Ltd- Mwea 22246069 and Amal Hospital Ltd, which owe the state between Sh3 and Sh15 million in refunds. 

Nakhumicha's report further accuses the health facilities of providing biometrics for fraudulent purposes.

“Anomalies have also been identified, including facilities conducting an exceptionally high number of eye surgeries in a day, ranging from 10 to 22, in facilities with a capacity of only two per day while lacking adequate theatre capacity. Such discrepancies raise significant doubts about the legitimacy of claims and the resources available at these facilities,” the report said.

The report also indicates that under the Edu Afya cover, health facilities have been enticing healthy students, by providing food incentives, in exchange for their biometrics. This has resulted in high financial losses. It also adds that some nurses operating in schools have been collecting and sharing biometrics for healthy students and using them to lodge fictitious claims.

Additionally, school nurse stations were found collecting biometric data of students who were not ill to lodge fictitious treatment claims and siphon funds.

"This exploitation of the Edu Afya scheme is unethical and has led to huge losses by draining resources meant for students in need of medical care," said the CS.

The CS said they have suspended operations of hospitals that have been identified to have been involved in the malpractices, pending further investigations. "A process to recover the fraudulent insurance claims made by these facilities has also been initiated."

Nakhumicha added: "Stern disciplinary action will be taken against those found guilty after thorough audits of records and beneficiary data. The Health ministry does not tolerate such unethical practices, eating into resources meant for providing affordable and quality treatment to citizens."

She said the government is also planning on how to reduce human interference in the health management systems to curb fraud.

A report on Beirut Pharmacy and Medical Centre said the hospital was listed as a Level 4 facility with a 40-bed capacity. However, evidence from the Kenya Medical Practitioners and Dentists Council shows the facility does not meet the criteria to offer major and specialised surgeries.

However, records show that despite this, the hospital submitted and was paid 1,592 claims totaling to 154, 439, 360 Shillings between 1st January 2022 and June 1 2023. Out of this, 858 cases worth 59,461,360 which is equivalent of 38.2% were related to enhanced schemes while 93,888,000 shillings went to major surgery cases.

Another Ksh 90,000 went to minor surgeries. This means the facility was compensated more for surgeries that it is not mandated to perform on patients.

Another hospital, Amal Limited, is also accused of encouraging employees of  Securex Services Limited to fake sickness in exchange of a Kshs 10,000 reward.

A further Kshs998,000 was paid to employees of a company known as Sekura International Limited, only to be identified to have been at work at the times they were allegedly being processed for admission with their biometrics taken.

Late last year, the Kenya Kwanza government rendered the National Hospital Insurance Fund redundant, and replaced it with a new body, the Social Health Authority (SHA).

The Authority has been vested with powers to manage all assets and other properties. However, the new idea is facing pitfalls in the courts.