State to clear NHIF debts for hospitals with claims of Sh10 million and below

The government has resolved to pay all hospitals with claims of Sh10 million and below in full. The amount will cover 91 per cent of the facilities previously contracted by the National Health Insurance Fund (NHIF).

In a statement on Wednesday, the government said the remaining 9 per cent of hospitals, with claims exceeding Sh10 million, will undergo a verification process within 90 days, after which a payment plan will be determined.

It added that the Cabinet Secretary will gazette the verification committee within a week to oversee the process.

According to the government, by the time the NHIF was dissolved on November 22, 2024, it had accumulated debts amounting to Sh33 billion, severely impacting service delivery in public, private, and faith-based hospitals.

“The outstanding liabilities affected the ability of these facilities to operate effectively under the new Social Health Authority (SHA),” read the statement.

Meanwhile, SHA has assured healthcare providers that current claims will continue to be settled within a month.

Since its inception on October 1, 2024, the government said the authority has disbursed Sh18.2 billion to clear all undisputed claims lodged up to January 31, 2025.

The government’s move comes after the Rural and Urban Private Hospitals Association of Kenya (RUPHA) raised concerns that thousands of healthcare workers, including seven in 10 nurses in private and faith-based hospitals, have lost their jobs due to financial struggles caused by the delayed payments.

RUPHA had warned that nurses have been the worst affected, with 70 per cent losing their jobs. Other affected medical staff include clinical officers (56 per cent), laboratory personnel (41 per cent), pharmacy workers (34 per cent), and physicians (30 per cent).

Appearing before the House Committee on Health on Tuesday, RUPHA Chairperson Brian Lishenga disclosed that 82 per cent of hospitals had reduced operations over the past 12 months due to financial constraints.

“This has affected clinical units, administrative and non-clinical departments, diagnostic units, and even operating theatres. Some hospitals have shut down entire branches or satellite facilities,” he said.

In his presentation to the committee, Lishenga painted a grim picture of the crisis, noting that “87 per cent of hospitals struggled to meet payroll, forcing staff layoffs. Fifty-five per cent of providers faced debt-related issues, with 32 per cent at risk of asset auctions and 18 per cent entangled in small claims court cases. Additionally, 89 per cent of facilities struggled with operational costs such as rent and utilities, while 74 per cent faced shortages of essential supplies, affecting service delivery.”

Some hospitals, he added, had witnessed increased voluntary resignations, deepening the workforce crisis. To cope with the shortfall, he disclosed that RUPHA facilities have turned to “increased use of locum staff, restructuring of departments, hiring freezes, and outsourcing of services.”

The financial distress has also burdened patients, with 40 per cent of hospitals requiring out-of-pocket payments, exacerbating financial hardships.

“Patients without proper identification were denied care due to SHA verification challenges, while 51 per cent of facilities reported turning away insured patients due to claim approval uncertainties,” Lishenga said.

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He added that some facilities have stopped offering certain services or have limited care for SHA beneficiaries, leading to longer wait times or outright denial of treatment. He blamed inefficiencies in the NHIF-SHA transition, including patient registration challenges, issues with the SHA contact centre, and errors in the portal functionality.

RUPHA, the Kenya Healthcare Federation, and the Kenya Association of Private Hospitals had urged the government to expedite improvements to the SHA portal to facilitate smooth patient registration, claims processing, and timely payments. They also pushed for the immediate release of funds for already verified claims and a clear plan to clear pending claims within three months.

Additionally, they wanted the government to resolve longstanding disputed claims dating back to 2017 and establish a Disputes Resolution Tribunal under SHA to oversee claim and contract disputes, ensuring timely resolutions.

In response, the government has reiterated its commitment to Universal Health Coverage, assuring Kenyans that any challenges in the implementation of Taifa Care, the national health scheme, are being addressed.