MPs expose how former NHIF officials colluded with hospitals to siphon Sh828 million
The report was released at a time when President William Ruto announced that the government would fully settle claims of up to Sh10 million owed to health facilities.
A parliamentary committee has called for the prosecution of several former National Hospital Insurance Fund (NHIF) officials over allegations of colluding with hospitals to facilitate fraudulent payments amounting to Sh828 million.
The National Assembly’s Public Investments Committee on Social Services, Administration, and Agriculture, in its report, said the officials conspired with medical facilities to make fictitious claims, including non-existent surgeries and duplicate procedures.
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The committee has now urged the Ethics and Anti-Corruption Commission (EACC) to investigate and submit its findings to the Director of Public Prosecutions (DPP) within three months.
The Committee, led by Navakholo MP Emmanuel Wangwe, revealed that discrepancies in the NHIF system led to an overpayment of Sh828,729,148 out of a total expenditure of Sh29.9 billion under the National Health Scheme Benefit.
An audit found overpayments of Sh94.8 million for CT scans, Sh16.1 million for MRI, Sh285.8 million for major surgeries, and Sh29 million for minor injuries. Additionally, Sh25.5 million was lost in basic chemotherapy, Sh3.6 million in specialised surgeries, Sh3.3 million in rehabilitation and over Sh2.5 million in normal and Caesarean-section deliveries.
A particularly shocking revelation in the report detailed how Sh5.7 million was paid to NHIF-accredited hospitals for 656 duplicate Caesarean-section procedures allegedly carried out on the same patients. Further, the analysis of claims found Sh247 million in duplicate payments under the National Health Scheme alone.
The defunct NHIF’s flagship National Health Scheme (NHS), also known as "UHC Super Cover," was intended to provide comprehensive health coverage for members and their dependents. However, the committee's findings indicate that officials manipulated the system in collusion with hospitals and medical personnel to embezzle public funds.
"This is massive corruption, and the committee recommends that the EACC undertakes urgent investigations into all the persons who facilitated the overpayments of more than Sh828 million. The EACC should bite hard," Wangwe said in the report.
"I want to call on the Ethics and Anti-Corruption Commission (EACC) to investigate the fraudulent claims processing and ensure that offenders are held accountable within three months. Instances of inflated costs for medical procedures such as C-sections, major surgeries, and overseas treatments are particularly concerning.”
The committee has recommended that accounting officers, board members and other staff be held accountable for the financial irregularities. The report also proposes the recovery of the misappropriated funds at the prevailing Central Bank of Kenya lending rates.
The report further highlights systemic weaknesses within NHIF that left the fund vulnerable to fraud. Hospitals reportedly exploited the system by using single case codes to claim multiple benefits, while some disguised fraudulent claims by consolidating multiple treatment sessions, such as dialysis or chemotherapy, into a single invoice. Additionally, the committee flagged NHIF’s poorly monitored benefit designs, which created loopholes for exploitation.
One example cited in the report was a hospital in Kikuyu Town that claimed to have performed more C-sections than the country’s largest referral hospital, Kenyatta National Hospital.
The MPs have called for an investigation into NHIF’s systems to determine who facilitated the fraud and to ensure legal action is taken against those responsible.
"We must ensure our proposals are not shelved. This committee must keep tabs on implementation, especially within the specified three-month window," Kwanza MP Ferdinand Wanyonyi said.
Nandi Hills MP Bernard Kitur echoed similar sentiments, saying, "The EACC must move with speed and investigate the financial mismanagement, and those involved must face the full force of the law."
The focus now shifts to the EACC and the ODPP as Kenyans await action on the matter.
The report was released at a time when President William Ruto announced that the government would fully settle claims of up to Sh10 million owed to health facilities.
The announcement, made on Wednesday, affects claims from public, faith-based, and private hospitals, accounting for 91 per cent of all facilities under NHIF. However, hospitals with claims above Sh10 million will undergo a verification process expected to be completed within 90 days before payments are made.
To address concerns over the newly launched Social Health Authority (SHA), the government has also committed to settling pending arrears on a monthly basis. So far, Sh18.2 billion in undisputed claims have been paid, and SHA has cleared all claims submitted since its inception on October 1, 2024.
Since its launch in November last year, the Social Health Insurance Fund under SHA has faced criticism over system failures in hospitals, with many Kenyans calling for its abolition. However, President Ruto has defended the new digital healthcare scheme, arguing that it will prevent the fraud that plagued NHIF.
The parliamentary report is expected to have far-reaching implications for individuals implicated in the misuse of funds. The committee has called for a comprehensive review of internal controls within SHA and other affected institutions to prevent further mismanagement of public funds.
Additionally, it has recommended strengthening accountability mechanisms within SHA to curb fraud and corruption.
By addressing these systemic issues, the Wangwe-led committee aims to restore public trust and ensure responsible management of public resources.
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