NHIF under scrutiny over Sh368 million in excess payments due to 'typing errors'

A report by Auditor-General Nancy Gathungu has revealed that the National Health Insurance Fund (NHIF) paid Sh368 million in excess claims due to "typing errors" and lacks evidence of where the money went.

Gathungu says that in the year ending June 2023, the NHIF paid Sh814.9 million in claims while hospitals only billed Sh447.12 million through 10 schemes.

These are the National Pension Scheme (NPS)/KPS Scheme, National Health Scheme (NHS) Scheme, UHC Scheme, Civil Servant Scheme, Edu Afya Scheme, Health Insurance Subsidy Programme (HISP) (OVC), HISP(OPPSD), County Scheme, Parastatal Scheme, and Linda mama.

Gathungu said the NHIF attributed the overpayments to "typing errors" by hospital clerks but failed to provide proof of recovering the excess payments or reconciling the data.

“Review of payment data revealed that the hospitals billed Sh447,122,141 against claims paid amounting to Sh814,893,467, resulting in an unexplained variance of Sh367,771,326. Although management attributed the variance to typing errors made by hospital clerks while inputting bill amounts in the e-claim system, there was no evidence of reconciling the billed amount to claims paid or requests for refunds for overpayments,” Gathungu said in her report.

“In the circumstances, the accuracy, completeness and regularity of the claims paid amount of Sh814,893,467 could not be confirmed.”

The audit highlighted discrepancies in the Linda Mama scheme, where hospitals billed the NHIF Sh37.1 million but the fund paid Sh91.6 million, an excess of Sh54.5 million.

Overall, the NHIF reported paying Sh4.1 billion in claims under Linda Mama, which offers free child delivery for all women in the country.

Gathungu noted potential fraud, including multiple duplications.

“The amount includes Sh5,713,000 paid to NHIF-accredited hospitals, revealing 656 duplicate case codes for caesarean section deliveries on the same patient. Similarly, the amount includes Sh41,332,700 for 10,860 duplicated case codes for normal deliveries on the same patient,” she said.

The audit also exposed similar issues under the National Health Scheme (NHS). For instance, hospitals billed Sh280.6 million, but NHIF paid Sh486.6 million, an excess of Sh205.9 million, without explanation.

“Analysis of claims payment schedules revealed an amount of Sh247,021,907 in duplicate payments for NHS claims at Sh221,448,407 and Indigent Sponsorship (GOK) programme at Sh25,573,500,” read the report.

Additionally, the audit found that out of Sh12 billion owed to healthcare providers, Sh2.9 billion contained “duplicated healthcare providers with the same name but different outstanding amounts and different hospital codes.”

The audit also flagged instances where hospitals submitted claims to NHIF up to five years after the 30 days for claim submission had lapsed.

Further, the report notes that the NHIF operates with very few quality assurance officers, making it difficult to effectively monitor patient admissions and prevent fictitious claims, potentially exposing the fund to avoidable claims worth billions of shillings.

"Review of human resource records revealed that 23 branch managers and 29 quality assurance officers who are key personnel in the management of claims have been in the same branch for 5 to 13 years. This may result in familiarity or a friendly approach to clients, which is likely to compromise surveillance and enforcement duties," reads the report.