CS Nakhumicha: Rogue hospitals have defrauded NHIF of Sh170 million

The government through the National Health Insurance Fund (NHIF) has lost Sh171 million through fraudulent claims by hospitals contracted by the fund.

In a shocking revelation, Health Cabinet Secretary Susan Nakhumicha said Friday that out of the 67 hospitals audited between the months of January and December, 27 of the health facilities were involved in fraudulent activities.

The extent of the fraud, the CS said, could have resulted in losses of more than 20 billion as it is estimated that about 3,440 out of a total population of 8,886, or about 40 percent of the hospitals, pocketed money from NHIF through fictitious claims.

Last month, a report presented by NHIF Chief Executive Officer Elijah Wachira to the National Assembly Public Accounts Committee exposed the many strategies used by hospitals across the country to siphon money from the NHIF.

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The report detailed how some hospitals billed NHIF for services never rendered, while others used unscrupulous means such as manipulating MRI images to include patients who did not actually receive the services.

 "Under the EduAfya cover, health facilities have lured healthy students by offering food incentives for their biometrics, resulting in huge financial losses. In addition, cases of nurses stationed in schools collecting biometrics of non-ill students to submit fictitious claims have been unearthed, significantly abusing the scheme," she disclosed.

Other strategies included activating members' dormant accounts to fund medically unnecessary treatments. Some health care facilities also kept fictitious records, fabricated claims, and engaged in deceptive practices, such as falsely reporting that members underwent major surgery while actively working, all of which contributed to the fraud.

"Disturbingly, some hospitals have targeted groups of security guards from licensed security companies and financially induced them to provide biometric data for fraudulent purposes," she added.

Anomalies have also been identified, including facilities performing an unusually 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 operating room capacity.

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The fraud also targeted vulnerable individuals such as the elderly residing in regions such as Nairobi, Meru, Nyahururu, Muranga, Kerugoya, Makueni, Tharaka Nithi, Subukia, Nanyuki, Bungoma, Chuka and Machakos.

The identified facilities, CS said, have been suspended and recovery of fraudulent claims is ongoing.

These revelations come three months after the enactment of the Social Health Insurance Act, which abolished the NHIF and established three new funds: The Primary Healthcare Fund, the Social Health Insurance Fund, and the Chronic Illness and Emergency Fund.

Commenting on the gazette, Ms Nakhumicha said the new funds pave the way for a new way of financing healthcare.

"It is a shift from merely treating illness to actively promoting wellness in communities, bringing healthcare closer to home by creating a network of healthcare support that extends from basic community facilities to advanced medical centers," she said in November.

According to the CS, secondary school students from public schools, who were previously covered under the Edu-Afya program, will be included in the new fund, under their families.

"What we have done under the Social Health Authority, we have said that the government is not going to leave anyone behind. Everybody will be covered. Because what they did was they covered students and they forgot that students come from families and they depend on their parents. So what the Health and Human Services is going to do is cover the household, which includes the students," she said.

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However, the court temporarily halted the implementation of the scheme after the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) filed a case challenging the implementation of the social health insurance scheme.

The rollout, as stipulated in the laws, would take place this month, January 2024.

"We will start our registration in earnest as soon as our issues are resolved by the courts. We will be registering households, so everyone in our household will be covered. The students, the parents and all the members of the household will be covered," she said.

In response to these revelations, the SHA has suspended the identified facilities and is moving forward with the recovery of fraudulent claims. The Authority is also taking steps to automate services to minimize human interface and implement strong business intelligence modules within their ICT systems to flag outliers and double payments in a timely manner.

Summary of NHIF Recoveries: