Audits by the National Health Insurance Fund (NHIF) have exposed how four hospitals allegedly pocketed hundreds of millions in fictitious claims for patients they never treated.
The audit reports before Parliament indict St Peter’s Orthopedic and Specialty, Jekim Medical Centre of Meru and Nairobi’s Eastleigh-based hospitals-Beirut Pharmacy and Medical Centre and Amal Hospital Limited.
Covering the period 2022 and 2023, the investigation accuses the health facilities of fraud including altering and falsifying information in collusion with some NHIF staff members and NHIF card holders to pocket over Sh700 million.
Some of the patients the hospitals reported to have admitted, were found to be at their places of work at the same time they were supposed to be bedridden.
The National Assembly’s Health Committee is using the audit reports in its investigation into alleged fraudulent payments made to eight private health facilities.
Officials of Amal and Beirut were among those lined up to appear before the committee yesterday. The audit findings come as NHIF upheld the suspension of the four hospitals from the list of contracted health facilities.
Among the most paid health facilities by the NHIF, St Peter’s Orthopedic and Surgical Specialty received Sh1.63 billion, about 22.8 percent of the amount paid to the hospitals.
The report, which shows that 96.2 percent of the claims submitted by the hospital were on major and specialised surgeries, recommends the facility refunds Sh379 million.
“The facility should pay back the Sh379.92 million received from the NHIF since it was in Level 4 and did not qualify to undertake specialised surgery during the 2018/ 2021 contracting cycle,” the audit recommends.
The auditors also want the Ethics and Anti-Corruption Commission (EACC) to recover Sh114.75 million irregularly paid to Jekim Hospital Nkubu, Sh137.65 to Beirut Pharmacy and Medical Centre and Sh67.9 to Amal Hospital Limited.
The audits capture some patients denied being treated by the hospitals and some said they were not aware of the existence of such hospitals.
Yet others were confirmed by their employers to be at work for the entire period they are claimed to have been admitted, while others were on leave.
The audits want the EACC to investigate further “this elaborate fraud scheme” and recover the amount lost.
NHIF also wants show-cause letters issued as to why disciplinary action should not be taken against two senior officials in line with Human Resource Policy and Procedure Manual.
The two are accused of adding inpatient, surgical services and issuance of contract to Beirut Pharmacy and Medical Centre without assessment and gazettement by the NHIF board leading to irregular payment of Sh153.44 million.
NHIF contributions will be based on income
A background check undertaken by the Saturday Nation established the two officers are no longer at NHIF.
The audits also recommend three other NHIF managers be issued with show-cause letters for not observing due diligence while executing the Beirut contract and processing claims causing a loss of Sh15.79 million. The three are still at NHIF.
The audit on St Peters Orthopedic and Specialty, a perusal through 82 patient files worth Sh17.58 million for the period September 27, 2022 to November 16, 2022 showed that 57 claims of Sh11.73 million had different dates of admissions between NHIF records and hospital files.
“The admissions were to be clinically verified by branch Quality Assurance Officer before submission to NHIF for processing. This means that they were not adhering to the 24 hours’ notification requirement and officers processing claims did not observe due diligence,” the audit says.
On October 25, 2019, St Peters Orthopedic and Specialty was issued with a comprehensive contract by NHIF running from July 1, 2018 to June 30, 2021 despite being non-comprehensive as it was type C.
This contract entailed outpatient, inpatient and surgical packages including specialised surgeries, contrary to the communication from the department of Benefits and Contracting leading to unwarranted payment of Sh379.92 million for 1,265 claims.
The audit has recommended disciplinary action against an NHIF branch officer “for failing to observe due diligence on his duty by allowing late notification of claims submitted by the hospital occasioned unwarranted payment of Sh11.73 in claims.”
Issues flagged by the audit include contracts lacking adequate security features that can uniquely identify genuine contracts and content making it possible to replace pages of the contract with different terms.
It was also established that the hospital has been doing surgical procedures, with no outpatient services offered to capitated members and maternity services even though it is captured in the contract.
“This means that the facility has been selectively implementing the contract,” reads the audit.
The justification for suspending the facility is that it ferried 18 patients from Murang’a, Nyahururu, Mwea, Embu, Kerugoya, Machakos, Makueni and Nyeri among other towns for specialised surgery.
“This is induced demand contrary to the signed contract,” the audit reads even as it recommended disciplinary action for an NHIF officer for processing and paying 13 claims of Sh2.4 million despite inconsistencies.
Between February 2023 and May 2023, the hospital lodged Sh175.98 million in claims for 608 specialised surgeries and Sh12.48 million for processing for the 676 major surgical cases.
The audit indicates that to ascertain whether the claims submitted to NHIF for processing and payment are authenticated, the investigators visited the facility from June 22, 2023 to June 29, 2023 and reviewed 125 patients’ medical files.
“It was revealed that the hospital maintains different registers for surgical cases and anesthesia. There was discrepancy between the dates of admission and the dates of discharge in the hospital files and in patient files,” notes the audit.
The audit shows that of the 125 patients’ records, 63 cases were in agreement with NHIF records whereas 62 cases showed different dates from “our records.”
Telephone calls made to a sample of 130 patients, 10 patients confirmed to have been ferried to the facility.
This, according to the audit, confirms allegations made that the facility was ferrying patients from their homes to the facility to undergo surgeries.
An NHIF member undergoes biometric registration at the Wamagana Education hall in Nyeri County on June 2, 2021.
Photo credit: Joseph Kanyi | Nation Media Group
“Allowing picking of patients by health care providers across the country may lead to induced demand for patient treatment,” reads the audit.
The auditors want Jekim Hospital to refund the Sh114.75 million because of the diagnosis not tallying with the history of presenting illness and unnecessary laboratory tests.
Also faulted is the finding of converting outpatients to inpatients without proper justification, missing patient details, influencing beneficiaries to obtain services that are not medically necessary, as well as unwarranted admissions and long stays that led to NHIF losing funds.
The facility is a Level 4 hospital contracted by NHIF to offer- outpatient, inpatient, dental, optical, radiological services (Xray and Ultrasound), maternity package plus Linda Mama services and surgical package.
The fraudulent claims that Beirut Pharmacy and Medical Centre and Amal Hospital are accused of making, are almost identical in that some of the employees of various organisations including Office of the President, claimed to have been admitted at the two hospitals and paid for in medical claims, were actually on duty.
For instance, the audit found that an encounter form on an e-claim system revealed that some employees of various agencies admitted at the facility were identified biometrically on entry but on exit, some had no bios.
“This was a confirmation that the members were involved in the process,” the report indicates.
The audit shows that from July 1, 2022, to June 2023, AMAL Hospital limited submitted 504 claims of which 267 worth Sh34.65 million have been paid with 237 claims worth Sh32.25 million in payment process.
It is on the spot for intentionally using a higher paying code on the claim for a beneficiary to fraudulently reflect the use of more expensive procedure, devices or medicine than was actually used or was necessary.
It has also been accused of altering or falsifying information with intent to defraud NHIF to obtain a benefit that it is not entitled to.
Review of system records revealed benefits access and utilisation patterns where the facility lodged surgical preauthorisation requests for big number of employees of the same employers.
The highest beneficiaries per employer on surgical procedures were self-employed (56), Ministry of State for Youth Affairs (23), Kenya Kazi Services limited (12) and Africa Apparels EPZ limited (12).
There is also the Ministry of Home Affairs- Prison department (11), Bob Morgan Services Limited (8), Machakos County (8), Office of the President-Police (7), Securex Agencies (K) Limited (7), Sekura International Limited (6), Administration Police (6) and Hatari Guards (6).
Records at the Registrar of Companies show that Beirut Pharmacy and Medical Centre was registered on October 12, 2018.
The audit reveals that from January 1, 2022, to June 1, 2023, the facility submitted and got paid Sh153.44 million for 1,592 claims. About 114 claims worth Sh13.2 million are still being processed by NHIF for payment.
It was established that the hospital was accredited and gazetted to offer outpatient care in May 2021, but system records indicate that the facility was captured in QV term system on December 23, 2019.
Inpatient services and rebate of Sh1,800 was inserted in the system with effect from January 1, to June 30, 2022 and again updated to Sh3,000 with effect from July 1, 2022 to June 30, 2024. The report identifies the user who updated the information and also updated the HCP category level from 3B to 4 on February 10, 2022.
Currently the facility appears in the system as Level 4 with a bed capacity of 40 beds on a comprehensive contract.
Evidence from a joint inspection checklist developed by the Kenya Medical Practitioners and Dentist Council (KMPDC) indicates a facility at Level 3B does not meet criteria to offer major and specialised surgical operations.
The NHIF system records revealed benefits access and utilisation patterns where the facility lodged surgical pre-authorisation requests for a large number of employees of the same employers, self-employed 163.
Others included, Regular Police (38), Prison (30), Securex Agencies (K) limited (27), Sekura International limited (23), UHC Scheme (21, Administration Police (18), Wells Fargo limited (12), Hataru Guards (10), Lavington Security Guards limited (10), G4S Security Services Kenya limited (10), Ministry of Health (9) and Radar limited (10).
The system records indicated that 27 members of Securex Agencies (K) Limited were treated at Beirut Pharmacy and Medical Centre and Sh3.65 million in claims paid.
However, the audit established that 26 members were confirmed by the employer to be at work during the entire period of admission and one was on leave as per the attendance register.
It was also established surveillance reports availed by the Eastleigh branch for Beirut hospital indicated that, out of the 27, none appeared in the surveillance report.
The facility further submitted Sh3.54 million in surgical claims that was paid with Sh130,000 in the payment process.
“Based on information gathered, there was collusion between the Beirut Pharmacy and Medical Centre and 26 members who were confirmed to be at work the entire admission period as supported by attendance register,” the audit says.
The NHIF records showed that 23 employees of Sekura International Ltd were treated at the facility and claims worth Sh2.94 million made. The audit established that 10 were confirmed by the employer to be at work on the entire period of admission as per the attendance register.
The audit indicates that five employees of Kenya Kazi Services Ltd were treated and Sh700,000 in claims paid to Beirut Pharmacy and Medical Centre.
Audit team established four were confirmed by the employer to be at work for the entire admission period.
The records showed that 10 employees of Hatari Guardswere treated at the facility and Sh1.3 million paid on surgical claims despite 9 being confirmed by their employer to be at work for the entire period of admission.
It is also indicated that 12 employees of Wells Fargo Ltdwere treated at Beirut Pharmacy and Medical Centre and with Sh1.56 million in surgical claims paid.
But details show that 11 were confirmed by their employer to be at work during the entire admission period. On Africa Apparels (Epz) limited, records revealed that a dependant accessed treatment at Beirut hospital and Sh130,000 paid.
But surveillance reports availed by the hospital showed that the beneficiary, Mr Evans Kaburu, was not in the report.
Also affected is Lavington Security Guards. NHIF records showed that 10 members from Lavington Security Guard Ltd were treated at the facility and Sh1.3 million in surgical claims paid despite nine being confirmed to be at work during the admission period.
The audit also faults the Ministry of Health, Nairobi City County Government for frustrating the investigations and Suman Shakti EPZ limited.
The findings note that On June 8, 2023, the NHIF team visited the ministry to obtain information for verification of access to benefits by nine beneficiaries worth Sh1.3 million who according to NHIF records, are its employees.
“The team was instructed to send a letter to the PS for the information. Follow up is in process,” the audit says.
On the Nairobi City County, NHIF CEO wrote a letter on June 9, 2023 to the County Secretary of the intended inspection and request for employee records for verification on the eight beneficiaries treated at the facility for Sh940,000.
“As of the date of this report, the employer had not responded to the request.”
The audit further notes that on the same day it wrote to the Nairobi City County, its team visited Suman Shakti EPZ Limited to access payments to six of its employees.
Also affected in the fraudulent claims are four employees from Bob Morgan Services limited, 10 employees from G4S Security Services Kenya limited, nine from Radar limited, Eight from Dannrry Logistics Ltd, Suman Shakti (EPZ) among others.
