The Medical Administrators Kenya Limited (MAKL) is at the centre of investigations by the Senate over the Sh176.1 billion allocated by the government for the past nine years in medical schemes for teachers, the police and prison officers.
The probe by the Senate follows widespread frustrations from teachers that includes denial of medical services when seeking treatment.
The affected are forced to look for alternatives elsewhere despite the government having paid fully for their medical insurance cover.
Requesting the House to investigate the matter, Nominated Senator Raphael Chimera wants Teachers Service Commission (TSC) and the National Police Service Commission (NPSC) to explain the delays in processing of the medical insurance claims and payment to hospitals sub-contracted to MAKL.
Mr Chimera specifically wants the Health committee of the Senate to be provided with details of the medical insurance schemes for the teachers and police officers sub-contracted and managed by MAKL, “indicating the number of respective beneficiaries and panels of medical and healthcare service providers.”
“The committee should report on the criteria for processing claims at MAKL, explaining the delays reported by the teachers and the police officers in the processing of medical insurance claims and treatment in the MAKL contracted hospitals,” reads a letter by Senate Clerk Jeremiah Nyegenye, separately addressed to TSC and NPSC.
MAKL and Bliss are the capitation providers and administrators for the teachers, police and prison medical insurance schemes. In the current financial year, the premium allocated by the government to the TSC for the teachers’ medical insurance cover is Sh17.9 billion, meaning that for the past nine years it has been in operation, Sh161.1 billion is what the government has paid for the teachers’ scheme.
The police and prison officers, on the other hand, have spent Sh15 billion on their medical scheme. What has concerned the Senate is that MAKL is a private company and that the procurement of insurance for TSC is disguised as an insurance scheme.
The schemes tendering entities for TSC is Minet Kenya and for police is a consortium of insurance companies led by CIC General Insurance limited. The two insurance companies then contracted MAKL that charges between 5-7 per cent in administration fees to the tenders as the capitation administrator.
The premiums provided by the government are paid directly by the procuring entities, TSC and NPSC, to Minet Kenya and CIC General Insurance Limited.
The funds are then channeled by the insurance companies to MAKL for capitation purposes, which then empanels hospitals and doctors that are then tied up as a network of hospitals to provide services for the scheme.
Details in parliament show that whereas there exists strict obligations between TSC and NPSC on one side and Minet Kenya and CIC on the other, MAKL is nowhere.
The suffering of the insured under the schemes starts when MAKL, which retains all the rights for admission, negotiates with hospitals to provide the services, usually at very low capitation fees for patients as it aims to maximise on profits.
This notwithstanding that the hospitals also need to make profits. In the end, the hospitals maximise profits by way of either outright denial of services or endless frustrations of patients, forcing some of them to give up and opt to pay for treatment from their pockets in other health facilities.
“The less patients a hospital empaneled under MAKL treats, the more money it makes from the capitation fees,” says a teacher, who did not want to go on record.
In getting to the bottom of these issues, the Senate has lined up TSC, NPSC and Insurance Regulatory Authority, among others, for explanations on actions taken to address the delays by MAKL in processing the claims.
The Senate investigations come as it emerged that MAKL convinced the hospitals it empaneled to provide the medical services for policyholders on credit.
Details show that MAKL owe the hospitals to the tune of Sh5 billion in unpaid capitation claims despite the government releasing the funds to TSC and NPSC.
So, where did the taxpayers’ money go?
The failure to pay for services rendered has seen some hospitals threaten to take action including freezing services to-the policyholders until all the monies are cleared.
For instance, Nairobi West Hospital, owed Sh576.79 million in outstanding medical claims, is among the health facilities that have written to MAKL demanding payment for services offered.
“Please note that the above amounts continue to accrue as the medical service provider continues to provide services to your members. In effect, the company has exceeded its credit limit for Sh200 million as indicated in the contract,” Vishvesh Trivedi, the Finance head at Nairobi West Hospital wrote to MAKL.
The November 14, 2023 letter was copied to the Inspector General of Police Service and Commissioner-General of Kenya Prisons Service (KPS).
“Please note that failure to fulfil your contractual obligations on payment has led to constraint in the hospital’s operations including but not limited to inability to pay our doctors, service providers and suppliers thus negatively impacting our procurement of medicine and other consumables,” the letter adds.
In line with its contractual obligation with MAKL, the hospital has threatened to suspend medical services until the amount is paid, a move that will have devastating consequences on the policyholders.
“The medical service provider shall ensure all intended suspension of services are communicated in writing seven calendar days before the suspension takes effect,” the letter adds.
On November 21, 2023, Ms Rosemary Kuraru on behalf of Inspector-General of Police Japheth Koome, wrote to CEO of CIC General Insurance limited over the Nairobi West Hospital’s demand for payment of outstanding claims.
“The Inspector-General, the National Police Service is in receipt of a copy of the Nairobi West Hospital letter indicating their intention to suspend medical services offered to members of the police and prisons service,” the IG’s letter reads.
It continues; “this is therefore to request for your attention on the same to ensure that there is no interruption of services at the facility as intended. Kindly confirm action taken on the matter.”
