How taxpayers lost Sh29 million through loopholes in NHIF system

National Hospital Insurance Fund headquarters in Westlands, Nairobi. [Boniface Okendo, Standard]

The National Health Insurance Fund (NHIF) has been losing hundreds of taxpayer funds to fraudsters due to weak data management systems.

A report released by the Ethics and Anti-Corruption Commission (EACC) indicated that user accounts associated with the service providers had unrestricted access to the Fund’s system and all facilities or beneficiaries’ data.

EACC revealed that, in July 2022 the insurance scheme lost a whooping Sh29 million, further escalating concerns already raised by the public on the integrity of the scheme.

The anti-graft agency said the fraud was orchestrated by some staff whose identities they did not expose.

At the time, the employees gained illegal entry into the funds' infrastructure leading to the addition of unauthorised services to healthcare providers (HCPs) within the system.

"Three members of staff irregularly amended member details occasioning a loss of Sh29,958,642.00 to the Fund," the report reads in part.

"Active third-party user accounts with access to enterprise systems as evidenced in reviewed system audit logs... added 12 specialized services to one HCP on 14th July 2022."

At the same time, cases of user profiles of staff transferred from different stations not migrated to reflect current work stations and sharing of details among interns, were also reported.

Keep Reading

The 72-page report was handed over to NHIF management and the board of the newly formed Social Health Authority (SHA) at the headquarters in Nairobi on Tuesday.

EACC chair David Oginde said the report will help NHIF and SHA bodies streamline their operations during the transition period.

"Recurrent system outages and service disruptions may necessitate follow-ups which create opportunities for bribery and extortion to fast-track delivery of services," the report indicated.

According to the report, the compromise in data integrity may have contributed to favouritism and bribery as well as extortion due to a lack of accountability.

"We found that the systems were such that they lend themselves to people who are corrupt to take up the system."

To address the shortcomings, Medical Services Principal Secretary Harry Kimtai said they will leverage technology to seal the loopholes identified, including delays in empanelment that take 15 to 20 months to be approved.

"No more manual claims. We are starting in a new slate. It will not take more than 30 days before your claims are paid," he said.

He said the process of digitising the system which will include digital registration of all beneficiaries will cost about sh50 billion to complete.

"We are going to use cards, your identification number is what you will use in any hospital," he said adding that all the medication processes will be monitored through the digitised system.

"Officers who have been transferred...can access and approve treatment illegally. We will know which doctor recommended the patient," he said

On the transfer of personnel from NHIF to SHA, the PS noted that vetting will be done to edge out those implicated in graft.

Oginde said, the employees deemed corrupt "will still be pursued in their individual capacity...they are personally responsible...those cases will not be lost."

He, however, said the cases of breaches will be handled by SHA.

The EACC chair implored the stakeholders to explore a collaborative approach to addressing the challenges bedevilling the health scheme.