The Social Health Authority building in Nairobi.
Lawmakers have accused the government of fuelling the Sh76 billion Social Health Authority (SHA) debt crisis by promising people commercial-like cover that the Social Health Insurance Fund (Shif) Act does not provide.
The debt is owed to hospitals under the Rural and Urban Private Hospitals Association (Rupha) and mission health facilities enrolled by SHA to provide medical services to its members and indigents.
Health Cabinet Secretary Aden Duale dismissed the claims, saying the government pays about Sh6 billion in claims to hospitals contracted under SHA and does not owe any facility with a valid contract “a coin” for services rendered.
But even as CS Duale pushed back, the National Assembly Health Committee accused the government of misrepresenting SHA benefits to citizens and employers outside the Essential Benefits Package (EBP).
Member Anthony Kibagendi (Kitutu Chache South) pointed out that Section 24 of the Shif Act limits entitlements to the prescribed EBP, “making it unlawful to cross-subsidise commercial schemes from statutory contributions”.
“The Act does not provide an express window for integrating commercial insurance premiums, yet this is what the government is promising Kenyans.”
Dr Brian Lishenga, founding chairperson of Rupha, noted that as of the end of August, the national health debt stood at Sh76 billion, comprising Sh33 billion in arrears from the defunct National Hospital Insurance Fund and Sh43 billion from SHA’s current account. “We estimate Rupha members are owed a cumulative Sh15 billion of this national sum,” Dr Lishenga said.
Rupha, which brings together more than 380 private hospitals and medical centres serving remote parts of Kenya and underserved urban communities, has announced that civil servants and other government employees visiting their facilities will now be treated on a cash basis.
They say SHA’s failure to pay claims has caused salary delays, stalled investments in equipment and medicine, and disrupted emergency services due to reimbursement uncertainty.
Mr Duale, however, told the Nation yesterday that SHA “only signed contracts with individual hospitals, which do not recognise the umbrella body,” dismissing the association’s claims.
“We deal with specific hospitals, not Rupha . As far as I know, we have paid all claims,” he said, sidestepping MPs’ accusations of misrepresenting SHA benefits.
Mr Kibagendi insisted that while SHA markets generous inpatient benefits of between Sh2 million and Sh5 million, along with expanded outpatient, dental and maternity cover for teachers, civil servants and police officers, “the reality is far from that.”
Documents before the Health Committee show that SHA offers Sh700 per person annually—far below the Sh200,000 outpatient benefits promised under government-backed medical schemes.
SHA also provides Sh4,480 per day, capped at 180 days per family for inpatient care. That translates into about Sh806,400 annually—well short of the Sh2 million to Sh5 million inpatient limits offered under commercial insurance to civil servants.
As a result, patients at Level 5 and 6 hospitals, where a single consultation costs over Sh2,000, often have to pay cash out of pocket because SHA cannot legally cover such charges. SHA CEO Mercy Mwangangi did not respond to enquiries sent to her phone number. Among the issues she was expected to address were how much SHA owes Rupha and other hospitals in unpaid claims, and why claims are not being settled on time.
She was also required to explain why the government is promising commercial-like or expanded cover for teachers, civil servants, and police officers under SHA, yet the law limits benefits to the EBP.
According to Dr Lishenga, liquidity challenges have worsened SHA’s woes. He said SHA collects about Sh5.4 billion to Sh6 billion monthly in member contributions but receives claims of up to Sh8.8 billion monthly.
The Rural Private Hospitals Association of Kenya chairman Brian Lishenga.
“SHA, therefore, runs a Sh3 billion monthly deficit,” he said.
To cope, he added, SHA has been rejecting claims worth about Sh10.6 billion and “throttling” another Sh24 billion in the system at the medical review stage. “These claims are not moving to the payable stage. It is a strategy to throttle claims, deny payment and improve SHA liquidity,” Dr Lishenga said.
Documents presented to the Health Committee by medical practitioners show that while voluntary top-up schemes can run in parallel under SHA and remain ring-fenced from statutory SHIF funds, this can only happen if a policy decision exists to integrate commercial schemes into Shif.
This would require amending the Shif Act, which establishes three statutory funds: the Primary Healthcare Fund, the Social Health Insurance Fund, and the Emergency, Chronic and Critical Illness Fund.
SHA’s EBP provides primary care, including outpatient consultations, essential drugs, maternal care and immunisation. The inpatient package covers maternity (normal and C-section), capped ICU and HDU stays, dialyses, and oncology treatment.
Emergency and critical care benefits include trauma, cardiac cases, strokes, obstetric emergencies, and ambulance services to referral facilities. Some benefits are expressly restricted to levels 2 and 3 facilities, such as routine outpatient care. When accessed at level 5 or 6 hospitals, SHIF only reimburses the level 2/3 tariff. The difference must be paid out of pocket by the patient, in line with the referral principle under Section 25 of the SHIF Act.
Where SHA settles claims beyond the EBP—such as for VIP wards, unlimited outpatient visits, or overseas treatment—such actions violate Section 24 of the Act. Section 196 of the Public Finance Management Act further prohibits accounting officers from committing government to unauthorised or un-appropriated expenditures.
“Payments outside SHIF tariffs are, therefore, irregular and unauthorised. Accounting officers who authorise such payments risk audit queries, surcharges and prosecution under the Anti-Corruption and Economic Crimes Act,” Mr Kibagendi warned.
Dr Lishenga emphasised that commercial premiums cannot be integrated into SHIF without statutory amendments and must instead operate as voluntary top-ups.
“My view is that these are enhanced schemes, and they don’t fall within the gazetted essential benefits package. The SHIF Act expressly prohibits SHA from running enhanced schemes. Without amending the Act, this move is illegal,” he said.
