The High Court has quashed a decision by Health Cabinet Secretary Aden Duale to establish a committee to verify pending bills owed to hospitals by the defunct National Health Insurance Fund (NHIF).
The court found that the CS lacked legal powers to appoint the 19-member team and that the move contravened the Constitution.
“The transitional provisions of the Social Health Insurance Act do not provide for the formation of any committees to establish the liabilities of the NHIF,” said Justice Reuben Nyakundi in the verdict which sets precedent for future governance.
He added that there were no statutory provisions conferring the cabinet secretary with the power to establish an ad-hoc committee, “keeping in mind that the members of the committee will draw allowances at the expense of the tax payer”.
“The decision of the cabinet secretary to appoint a committee without any solid legal basis is a violation of Article 73 of the constitution which this court cannot allow to stand,” the judge ruled.
Mr Duale established the committee dubbed “a National Health Insurance Fund (NHIF) Pending Medical Claims Verification Committee” through a gazette notice dated March 28, 2025. Mr James Masiro Ojee was appointed the chairperson.
Part of its mandate was to determine the legitimacy of outstanding medical claims accumulated by NHIF between July 1, 2022, and September 30, 2024.
The decision was immediately contested by four activists – Dr Magare Gikenyi, Eliud Karanja, Dishon Keroti and Philemon Abuga – who challenged it in court arguing that CS Duale’s move lacked legal and constitutional basis. They also raised the issue of patients’ right to privacy.
“Handpicking people who are not employees of NHIF or SHA nor public servants nor staff of the Auditor-General to look into sensitive and confidential medical records of patients in the name of claim verification and exposing private data and patients’ disease conditions is against Article 31 of the Constitution,” they argued.
In the judgment, the court concurred with them and declined explanation by Dr Ouma Oluga, Principal Secretary, State Department for Medical Services, that the formation of the ad-hoc committee was an administrative measure.
“There is no express provision that guides the formation of ad-hoc committees by the Cabinet Secretary. Ordinarily, ad-hoc committees are formed by a resolution of the National Assembly to perform specific functions for a specific period,” said Justice Nyakundi.
The court stated that there was no legal basis for the establishment of the committee, since the Social Health Insurance Act, 2023 provides a claim settlement process.
“A declaration is hereby issued that the establishment of the National Health Insurance Fund (NHIF) Pending Medical Claims Verification Committee through Gazette Notice No.4069 Vol. CXXVII No 64 of March 28, 2025 has no constitutional or statutory basis and is therefore unconstitutional in its entirety,” the court declared.
According to the court, all liabilities of the defunct NHIF including claims were transferred to the Social Health Authority the moment the Act came into force.
“Therefore, there exists a process for the settlement of claims which would include the verification of the same under the Act. It follows that the establishment of the committee is unnecessary as there is a statutory provision that provides for the settlement of claims,” said Justice Nyakundi.
He stated that the “prudent thing for the Cabinet Secretary to do is to establish regulations for better carrying out of the settlement of claims”.
