Kenya’s National Health Insurance Fund (NHIF) is at the center of a financial scandal following a recent audit that uncovered a Sh368 million discrepancy in claim payouts. The Auditor-General, Nancy Gathungu, discovered the irregularities during an investigation into the Fund’s activities for the fiscal year ending June 2023.
According to the audit, NHIF disbursed an astonishing Sh814.9 million in claims, while hospitals invoiced the Fund for only Sh447.12 million across ten specific schemes, leading to a discrepancy of Sh367.7 million.
“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,” Ms. Gathungu stated in her report on NHIF.
NHIF tried to explain the discrepancy by blaming it on “typing errors” made by hospital clerks during the input of claim amounts into the electronic system. However, the audit found no evidence supporting this explanation. Additionally, NHIF failed to demonstrate any efforts to reconcile the billed amounts with the claims paid or recover any potential overpayments.
“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 added.
The excess payments were linked to the National Police Service, NHC, UHC, civil servants, Edu Afya, county, and parastatal schemes.
It has also emerged that NHIF management paid Sh51 million for a single patient who was supposedly admitted to different hospitals simultaneously. A review by the auditor revealed that this amount covered 2,808 claims allegedly for the same patient.
The audit further identified irregularities within the Linda Mama program, a government initiative providing free childbirth services for all women in Kenya. Despite hospitals billing Sh37.1 million for the program, NHIF inexplicably paid Sh91.6 million, resulting in an excess payout of Sh54.5 million.
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The National Hospital Scheme (NHS) also showed signs of mismanagement. Hospitals submitted claims totaling Sh280.6 million, yet NHIF disbursed Sh486.6 million – an unexplained excess of Sh205.9 million.
The audit also exposed that out of a Sh12 billion debt owed to healthcare providers, Sh2.9 billion included “duplicated healthcare providers with the same name but different outstanding amounts and different hospital codes.” Additionally, the audit flagged instances where hospitals were raising claims five years after the expiration of the 30-day period within which facilities must submit claims.
These findings come at a critical time, as President William Ruto’s administration is pushing for the rollout of a new Social Health Insurance Fund to replace NHIF. While the rollout has been delayed until October, registration is set to begin on July 1st.
