The Social Health Authority (SHA) lost Sh11 billion to fraud between October 2024 and April 2025, with private hospitals submitting the bulk of fake claims, a Ministry of Health audit has revealed.
Health Cabinet Secretary Aden Duale said the six-month period marked the height of theft within Kenya's flagship universal health coverage scheme.
"This is when the real theft took place. We will recover this from your reimbursement since we have a very good programme running. We are in the process of recovering," Mr Duale said during an exclusive interview with Daily Nation on Monday.
"The biggest fraud is in private facilities, though not all are culpable. It extends to referral hospitals as well, which have had claims rejected. Faith-based facilities have the lowest rejection rates. Hospital owners made a lot of money through the National Health Insurance Fund, and we will not allow that here."
The CS admitted that when he took over the Health Ministry, he questioned why it was being called 'Mafia House'. After two weeks, he reached the same conclusion.
"There was a lot to be done. What I found here was shocking. The situation is different now. We are not yet where we need to be, but we will get there. Let us stop politicising health — we are toying with people's lives," he said.
"Much of the fraud identified by the system involves the deliberate conversion of outpatient services into inpatient claims," Mr Duale said.
"Kenyans would visit a hospital and, instead of going home, would be admitted even when their condition did not warrant it," he said.
Cabinet Secretary for Health Aden Duale addresses the media at Social Health Authority headquarters in Nairobi on July 22, 2025.
Photo credit: Dennis Onsongo | Nation Media Group
The practice enabled facilities to claim higher reimbursements for the same services. In other cases, hospitals billed SHA for procedures that were never performed, or claimed payment for costlier treatments than those actually delivered.
"There are facilities where healthcare workers registered themselves as patients and logged false claims into the system. We have since closed these hospitals," said the CS.
In maternity services, some hospitals claimed that all their deliveries were caesarean sections, a figure that defies World Health Organisation standards.
"Such claims are medically implausible and internationally recognised as fraudulent. This is outright fraud, and SHA will not pay. It becomes a matter for the Ministry and regulators," Mr Duale said.
Surgical claims have presented another avenue for theft, the CS said.
"Missing theatre notes and incomplete documentation made it impossible to verify whether procedures were performed or whether the amounts billed matched what was actually done."
"Let me tell Kenyans: a lot of fraud took place between October, when SHA launched, and June. The situation is now stabilising. Our daily claims and revenue are balanced, and digital safeguards and investigative mechanisms have been put in place," Mr Duale said.
Hospitals with smaller debts have signed consent agreements with SHA and are negotiating repayment mechanisms, the CS noted.
"Some have signed the recovery agreement. They are disclosing the amounts they took and are ready to pay back. We have no problem with that; what we want is the money back. We will not spare anyone involved in fraud," he said.
To ensure transparency, the SHA system notifies facilities when claims are rejected, explaining why payments have been withheld and what documentation is required for resubmission.
Social Health Authority CEO Dr Mercy Mwangangi.
Photo credit: Dennis Onsongo | Nation Media Group
Last year, Mr Duale presented 118 files to the Directorate of Criminal Investigations. Investigations into 24 files have been completed, and another 15 were forwarded last week to the Director of Public Prosecutions (DPP).
The CS categorised the files into three groups: the first included 24 facilities with confirmed fraud; the second involved 61 facilities under investigation; and the third comprised 105 facilities whose cases had previously been closed by the Kenya Medical Practitioners and Dentists Council but which still hold contracts with SHA.
"Investigations are ongoing, and some cases have gone to court, including those involving senior SHA staff. More than 18 doctors and 22 clinicians have been denied access to the SHA portal," Mr Duale said.
Despite the losses, the CS highlighted the scale of government investment in healthcare.
"In the last 14 months, we have paid Sh75 billion to the Social Health Insurance Fund, Sh4 billion to the Public Officers Medical Scheme, and Sh1 billion to the Emergency, Chronic and Critical Fund," he said.
"We are the main funders of the healthcare system in this country, and no hospital can run without SHA. All we want is for facilities to give Kenyan patients the services they have paid for."
"It is simple: bill only for services actually delivered. SHA remains committed to working collaboratively with health facilities, professional bodies, and county governments to safeguard continuity of care and ensure patients receive services as stipulated under the Social Health Insurance framework."
Looking ahead, the CS set out an ambitious vision for healthcare delivery in Kenya.
"I want to ensure that Kenya becomes the leading country in healthcare delivery and that there is equity in access to services. I envision a future where ministers and even the President can be treated in the same facilities as ordinary Kenyans," he said.
In 2023, according to a World Bank report, Kenyans spent Sh153 billion out of pocket to finance healthcare.
Last October, the Director of Public Prosecutions, Renson Ingonga, approved charges against 10 suspects, including four directors of health facilities, in connection with alleged SHA fraud.
"After a thorough review of inquiry files submitted on October 1, 2025, by the Directorate of Criminal Investigations, the Director of Public Prosecutions has directed that the persons involved be charged with fraud and other charges including those in the Proceeds of Crime and Anti-Money Laundering Act, the Social Health Insurance Act, and the Anti-Corruption and Economic Crimes Act," reads a statement by Mr Ingonga.
The suspects include a SHA employee, four directors of private health facilities in Kilifi and Vihiga counties, and several employees.
According to the DPP, directors and employees of two facilities, Jambo Jipya Medical Clinic in Kilifi County and St Mark Orthodox Hospital in Vihiga County, allegedly colluded with the SHA employee to undermine government efforts to deliver quality healthcare.
Two directors and five employees of Jambo Jipya Medical Clinic, which allegedly submitted Sh2 million in fraudulent claims, face charges including conspiracy to commit a felony contrary to Section 393 of the Penal Code.
