Policyholders under the multibillion-shilling government-financed medical insurance scheme for teachers, police and prison officers will now be forced to pay for their medical expenses from their pockets after hospitals hired to treat them under the scheme threatened to suspend services over Sh5 billion in unpaid capitation claims.
This is notwithstanding that in the current financial year, the government released Sh17.6 billion to the Teachers Service Commission (TSC) to cater for the medical insurance of teachers in public schools and Sh13.6 billion to the National Police Service Commission (NPSC) for police and prison officers cover.
The scheme for the police and prison officers includes Sh5 billion for the Work Injury Benefits Act (Wiba), Group Personal Accident (GPA), last expense and group life while Sh8.6 billion is for medical cover.
The latest revelations come as the Senate and the National Assembly investigate the matter and specifically the legal status of the Medical Administrators Kenya Limited (MAKL) that has delayed the processing of the payment of the capitation claims, drawing the ire of hospitals.
Nominated Senator Raphael Chimera, who sought the statement in the House over the delayed processing of medical claims for teachers, police and prison officers wants the Health Committee of the Senate to summon Minet Kenya, a consortium of insurance companies led by CIC General Insurance Limited and MAKL over the matter.
“We have summoned them to come and explain the matter,” said Senator Chimera adding; “MAKL will be required to indicate the number of respective beneficiaries and panels of medical and healthcare service providers.”
Senator Chimera, who also questioned the legality of capitation as practised in Kenya, added that the committee may be compelled to request Auditor-General Nancy Gathungu to undertake a forensic audit into the administration of the teachers, police and prison schemes.
The need for a special audit is so that the insurance companies provide a list of hospitals and the amount owed, the services rendered and if “indeed the hospitals have not been paid, where is the money?”
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 of Sh200 million.
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 constraints in the hospital’s operations including but not limited to the 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 for 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 the CEO of CIC General Insurance Limited over the Nairobi West Hospital’s demand for payment of outstanding claims.
The teachers’ medical service scheme, which has now become a source of numerous complaints over poor services, has run for nine years. What has concerned the National Assembly and the Senate is that MAKL is a private company and that the procurement of insurance for TSC is disguised as an insurance scheme.
The scheme tendering entity 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 which charges up to 7 percent in administration fees to the tender amount as capitation administrator.
The premiums as provided by the government are paid directly by the procuring entities- TSC, 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.
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 profits.
In the end the hospitals contracted by MAKL maximise profits by way of either outright denial of services or endless frustrations like being kept waiting for hours so that patients give up and opt to pay for treatment from their pockets in other health facilities.
The Education Committee of the National Assembly was recently told that surgery, which requires immediate medical intervention, takes days “until one gives up for out-of-pocket financing elsewhere or dies while still waiting to be treated.”
The fewer the patients a hospital under MAKL treats, the more money it makes from the capitation fees.
In getting to the bottom of these issues, the Senate has lined up TSC, NPSC and Insurance Regulatory Authority (IRA) among others for explanations on actions taken to address the delays by MAKL in processing the claims.
