DCI probes 31 hospitals for ghost patients in Sh691m SHA scam

The Directorate of Criminal Investigations (DCI) has launched investigations into hospitals allegedly linked to fraudulent claims at the Social Health Authority (SHA).

At least 31 facilities have been listed for investigation.

The DCI began investigating the facilities after being granted approval by the Chief Magistrate Court at the Milimani Law Courts.

The investigation of the hospitals, according to the court document seen by The Standard, involves perusing documents from February 2, 2024, to August 31, 2025.

“That this honourable court be pleased to issue the applicant with warrant to investigate accounts held at the respondent to enable No.100479 PC Shadrack Mwango, a police officer and a detective attached to the DCI headquarters, or any other officer attached to and authorized by the applicant, to have access to, inspect/ investigate, obtain information, lift and carry away the following documentation for the period between February 1, to August 31, 2025,” reads a section of the court order.

The court order notes that the applicant (DCI) is undertaking investigations into allegations of a case of Conspiracy to Commit a Felony Contrary to section 393 of the Penal Code.

It adds: “The Director, Directorate of Criminal Investigations is in receipt of a letter from the Chief Executive Officer of (SHA) Respondent herein, requesting investigations into allegations of fraudulent claims by contracted healthcare facilities.”

According to the court order, the hospitals are suspected of having entered and uploaded information and/or documents to the SHA information system that is believed to be false with the aim of claiming payments for the medical services alleged to have been provided.

Investigations are said to have established that certain healthcare facilities did not physically exist or lack proper infrastructure and premises as required by law and some claims were based on fictitious or ghost patients with no actual treatment having been rendered.

As a result, SHA processed payments to health care facilities using the information entered and uploaded in the system and disbursed money amounting to approximately Sh691,393,530 to the suspected healthcare facilities, an amount believed to have been fraudulently obtained by the facilities.

Investigations into the hospitals follow the handover of at least 1,188 files to the DCI for probe.

The court document noted that following a public outcry, SHA conducted a forensic audit of its information systems, which revealed fraudulent activities by various healthcare facilities.

In one of the letters written to Chief Executive Officer by the Milimani law courts, to Chief Executive Officer Queen Rivers Medical Center in Homa Bay was asked to allow investigation into the facility.

“Honorable Court on oath that for the purpose of investigation into the commission of the offence of Conspiracy to Commit a Felony Contrary to section 393 of the Penal Code, it is necessary and desirable to issue, the applicant with warrants to investigate books of records so as to enable No. 100479 PC Shadrack Mwango a Police Officer and an investigator attached to DCI,” reads a section of search order by the court.

The hospital is required to provide payroll records for all the medics and staff, original copies of patient medical files of the attached list of patients as well as any other patient records under SHA that may arise during the course of the investigations, and certified copies of Identification documents presented by the patients during the treatment.

Other documents required are ward round notes for the same patients, original Patient admission registers for both inpatient and outpatient, original SHA Claim forms and all supporting documents attached therein, Pharmacy inventory and dispensing records, laboratory tests registers, Laboratory investigations report files and nursing hand over books.

Additional documents seen hospitals are required to provide DCI include payroll records for all the medics and staff and original copies of patient medical files of the attached list of patients marked as SMI-24, as well as any other patient records under SHA that may arise during the course of the investigations.

Hospitals are also required to provide certified copies of identification documents presented by the patients and ward round notes for the same patients.

The Standard reached out to one of the hospitals under investigation in Bungoma, which confirmed receiving a notice of investigation from the DCI.

In a phone interview, a senior official at a facility in Homa Bay County told The Standard that although investigations are ongoing, SHA services at the hospital have been suspended.

The facility is among 85 hospitals whose SHA accreditation was suspended by the Ministry of Health two months ago.

“DCI visited the hospital on Thursday and notified us of the intended investigations,” the official said.

The private hospital is being investigated for allegedly converting outpatient cases into inpatient cases.

However, the official dismissed the allegations as unfair, saying that admission decisions are made based on doctors’ reviews.

“It is true that a patient may initially come in as an outpatient, but after a doctor’s review, we may decide to admit them as an inpatient — purely to allow for advanced treatment and further tests,” the official explained.

There was resistance by hospitals to allow DCI entry for investigations.

“DCI Officers in Wajir did not present the order with the Judiciary logo. They went to the facilities before the order came out,” a source in Wajir told The Standard.

The source added: “As a result the facilities in Wajir have refused to cooperate.”

Forensic audits and digital systems have uncovered deeply troubling patterns of fraud.

The fraudulent practices, according to the ministry, include up-coding, where some hospitals bill for more expensive procedures than what was actually performed.

Other fraudulent practices were falsification of records, conversion of outpatient to inpatient, and hospitals billing for non-existent patients.

Some 24 hospitals have had their cases concluded, 61 facilities have cases that are ongoing, whereas 105 facilities have been closed by KMPDC and had contracts with SHA.