Pressure mounts on Duale to take responsibility over SHA fraud

Health stakeholders and leaders across the country have called on Health Cabinet Secretary Aden Duale to take personal responsibility over massive fraud reported within the new health scheme.

On Monday, Duale revealed that SHA had rejected Sh10 billion in claims from fraudulent hospitals.

The scandal has raised fresh concerns over public fund management, despite the Kenya Kwanza administration’s repeal of the graft-ridden National Health Insurance Fund (NHIF) and its replacement with SHA, which was designed to restore confidence in the health system.

The Rural and Urban Private Hospitals Association of Kenya (RUPHA) on Tuesday accused SHA of laxity, saying both the authority and the Ministry of Health have failed Kenyans.

“Why do fraudulent individuals continue stealing Kenyan money, while the Kenya Medical Practitioners and Dentists Council, the Pharmaceutical Board and SHA’s digital system remain ineffective?” RUPHA chairperson Dr Brian Lishenga asked.

He added, “Why are we spending Sh104 billion on a digital system that isn’t working? The CS and the health scheme must take full responsibility.”

Lishenga stressed that the Health Cabinet Secretary should be held accountable for the fraud, saying, “He is using taxpayers’ money while pretending to fight corruption.”

He said Duale has all the mechanisms to fight graft within SHA, which is the sole financier for the Universal Health Coverage (UHC) promised by President William Ruto.

“The digital system should have saved billions, but instead, they are shooting in the dark,” Lishenga said.

Recover funds

He added, “Individuals involved in fraud must be arrested. Kenyans have identified fraudulent hospitals—heads must roll.”

Former Chief Justice David Maraga also weighed in, urging the Ethics and Anti-Corruption Commission (EACC) to investigate and take firm action against those responsible.

Maraga stressed that all misappropriated funds must be recovered and that perpetrators should face the law.

“Fraudsters must pay. This is not negotiable. If you cannot act, then you are part of the problem,” he said.

He reiterated that SHA, with its digitalized systems, must expose the fraudsters and its board and management must be held liable.

“Those who have colluded to defraud Kenyans must also face the full force of the law. Whether they sit in the ministry, professional oversight bodies, more so the Medical Council, or within SHA itself. Culpability should no longer hide behind titles or offices. Monies lost must be recovered, and those responsible must be prosecuted and not protected,” added Maraga.

Maraga said Kenyans need accountability and transparency on the scale of theft and corruption involving public funds meant for health services.

“Paying huge sums of money through SHA to ghost hospitals and fraudulently registered facilities while real hospitals struggle, and ordinary Kenyans suffer, is not just a matter of negligence, it is betrayal of the Kenyan people,” he added.

IT platform

Central Organization of Trade Unions (Kenya), COTU Secretary General Francis Atwoli said he has been seeking an urgent meeting with the Duale to address the matter in vain.

In a statement, Atwoli said the core challenge facing SHA is that its operations are entirely dependent on an IT platform that remains under the full control of both the Digital Health Authority (DHA) and ministry, instead of being independently managed by SHA itself.

“Indeed, as a board member representing workers on the board of the SHA, I am painfully unable to explain to workers what is happening at SHA considering that SHA is being used as a conveyor belt to process payments while it does not control the IT system aimed at addressing the very problems created by the defunct NHIF,” said Atwoli.

He added, “It is, therefore, unacceptable that workers’ hard-earned money is managed through an “amorphous” arrangement where DHA and MoH controls critical systems," said Atwoli. 

Council of Governors (CoG) through Health Committee Chairperson, Governor Muthomi Njuki urged the Ministry to come clean and name the counties and hospitals allegedly involved in fraudulent claims.

“We are consumers and implementers. As far as I am concerned, we have told our people that we shall not entertain any of our facilities being involved in fraud. If any is implicated, they should not be treated as exceptional — the Ministry must take the necessary action through KMPDC, which is the regulatory body,” said Muthomi.

He said that though public hospitals serve majority of Kenyans, private hospitals are getting high percentage of SHA claims.

But in a quick rejoinder, RUPHA clarified that private hospitals account for 60 per cent of services under SHA, and with such, its expected they receive a bulk of reimbursement.

“Private hospitals are only getting about 53.5 per cent of reimbursement while seeing 60 per cent of patients. Public facilities are seeing 29 per cent of claims and receiving 32 percent,” said Lishenga.

Logically, he admitted that given the number of Level 2 and 3 hospitals, public facilities should be serving more patients.

However, majority SHA data shows the facilities are not fully submitting claims, patients are not SHA registered, whereas some are not digitally connected.

Fair treatment

The Kenya Healthcare Federation (KHF) called for fair treatment of providers by the government over what it terms as unfair targeting of private hospitals in the ongoing crackdown on alleged fraud at SHA.

Chief Executive Officer Dr Timothy Theuri said while the private sector supports efforts to weed out fraudulent practices, the process must be transparent and grounded in due process.

“We have always been proponents of stopping fraud. But any cases of alleged malpractice should be subjected to a dispute resolution tribunal, not intimidation,” Dr Theuri told The Standard in an interview.

The official argued that fraud is not unique to private providers and insisted that public hospitals should also be scrutinised.

“It cannot be accurate that only 40 facilities are responsible for the Sh10 billion reportedly lost. If hospitals are fraudulent, let them be named publicly after due process, so Kenyans know where not to go,” he said.

Dr Theuri noted that since the rollout of SHA, private providers have continued to operate in good faith despite payment delays and sharp fluctuations in claim settlements.

Shockingly, as pressure mounted on Duale to take responsibility on fraud, the digital platforms that were being used by Kenyans to flag out fraudulent and ghost hospitals were shut down.

The KMFR and KMPDC systems websites remained closed for the better part of the day, leaving only SHA portal that has details on payment of hospital claims.

By the time of going to press, both KMFR and KMPDC remained shut.

KMFR was providing facility details like number of beds and locations which made it easier for Kenyans to flag out facilities against the payments.

On the other hand, KMPDC system made it easier to identify the level of facility, against services offered.

The move to shut down the digital tools was strongly condemned by Maraga.

“This is not only cover-up of heinous crimes against Kenyans but also a breach of Kenyan's constitutional rights as these are sites that keep and verify government records on hospitals and healthcare centers,” said Maraga.

The system enabled flagging out of some facilities reported to be in a deplorable state, while others were ghost despite receiving millions of taxpayers money.

Example of facilities include Divine Sparkle Medical Center in Rangwe that received Sh2.8 million in June despite having received Sh7,000 in April.

The facility is allegedly owned by Labwe Farmers Sacco, with its back section being a residential.

Qarsadamu medical centre Limited, is documented to have received Sh2.8 million in June. Surprisingly, the hospital does not exist.

Las Ano Health Care, located at the Ethiopian boarder received Sh6 million from SHA in June, and Sh1 million in May. The facility is, however, non-existence.

In Garissa County, Modogashe Nursing Home was paid Sh6.8 million in June, despite operating out of a single room.

Ministry of Health records, however, indicate it has 20 inpatient beds, including 15 general beds, 5 maternity beds and two emergency casualty beds.

Another facility flagged is Jabii Nursing Home in rural Mandera, which reportedly received Sh5.53 million in June and an additional Sh1.5 million in May.

The hospital, according to Ministry of Health database, was registered in January this year, near Jabii Primary School, and would be cleared within just a week,  it does not exist.