How rogue medics are milking NHIF dry

Along Moi Drive in Nairobi’s Umoja Estate stands a seven-storey building that houses a modest medical clinic on the ground floor.

Opposite the building is a garage.

It is the kind of setting you would find in any one of the capital city’s populous estates. But this particular health facility, unlike its peers, possesses a unique characteristic.

The clinic has 531 registered clients from a government agency, earning it close to Sh6 million every three months.

In the last three years, this rather special facility in Umoja has earned Sh63 million from the National Hospital Insurance Fund (NHIF).

The facility has now drawn the attention of the Directorate of Criminal Investigations (DCI) and internal auditors commissioned by the NHIF board who doubt its capacity to warrant such huge payments from the institution tasked with providing public health insurance.

Documents at the State agency curiously show that all its employees – irrespective of where they live – chose this clinic as their outpatient facility.

It has no branch outside Nairobi.

Investigations are underway to establish how Bridges Medical Centre raked in more than Sh63 million in capitation fees between mid 2016 and November 2019 from NHIF.

The board wants to know how this facility with no compound and no branches still managed to be selected by all the employees of a State agency.

However, in an interview with the Financial Standard, the health facility’s owner, Moses Waitiki, said he was not aware his clinic had so many individuals registered as having chosen the facility under NHIF.

“I cannot comment now because all I know is that I offer outpatient services, and questions about those who chose this facility can be referred to the local NHIF offices where they made their pick,” he said.

When the Financial Standard visited the clinic last Friday, five detectives from the DCI were there looking through its books and questioning Mr Waitiki. They left after about four hours, carting away documents for further scrutiny.

The Bridges case is just one of the many that the national health insurer is investigating.

The fund has seen its collections grow into the billions of shillings over the past two decades, and with this, it has become the target of cartels and fraudsters.

In an audit by the board that is yet to be made public, it is estimated that 10 per cent of all claims made by health facilities are fraudulent.

“This (the Bridges saga) is just one of the cases whereby insiders could have colluded with unscrupulous individuals to defraud the fund,” said a source privy to the investigations but who asked not to be named as he is not authorised to speak to the press.

Back in 2001, NHIF’s revenue stood at slightly above Sh2 billion. This increased to Sh38 billion in the 2016-17 financial year – a 1,800 per cent rise.

Further, with news that the World Bank will be pumping in Sh40 billion as part of its plan to align the fund to the universal healthcare (UHC) programme, the NHIF board has been forced to take steps to curb excessive leaks and restore the fund’s credibility.

Fraudulent claims

In the 2016-17 financial year, the fund paid out Sh27 billion to healthcare providers, and with more than 20 fraud cases registered last year alone, the board is aware that a significant portion of these payments were based on fraudulent claims.

In a past interview with the Financial Standard, outgoing Health Cabinet Secretary Sicily Kariuki said one of the challenges NHIF faces is easy-come-easy-go money.

This has further been exacerbated by years of mismanagement at the fund, as well as undue influence from cartels, including politicians and private insurance companies who want a piece of the pie.

The NHIF board says the network of crooks feeding from the insurer’s coffers is vicious, which has complicated previous attempts to reform the fund.

In a case being taken to court this week, for instance, a network of university students perfected the art of stealing from NHIF through cloning national identity cards and NHIF cards.

The fund also unearthed another well-orchestrated plot earlier this month where a female student at a leading public university fraudulently requisitioned drugs from a well-known private hospital in Nairobi.

With her accomplice, she is alleged to have used the details of a senior police officer to create duplicate membership cards.

In two days, the student and her accomplice had acquired drugs worth Sh150,000 from the hospital.

The perpetrators created prescription notes from non-existent hospitals, complete with rubber stamps.

They use these to access the hospital’s pharmacies and then sold the drugs they got to chemists in Nairobi.

On one sheet, they prescribed themselves Albumin, a drug recommended for in-patient cases, worth Sh95,000.

The two, who depleted the police officer’s capitated amount, will be charged this week with seven counts of fraud valued at Sh1.3 million.

And in Ongata Rongai, the NHIF board is probing a group of individuals who opened a cyber café and registered fake companies.

They then visited various hospitals, sought out patients without an NHIF cover, and convinced them to say they were employees of these fictitious companies in exchange for health cover.

They then loaded these patients’ data, backdated their NHIF membership and generated fake cards.

They used these cards to claim money from the fund in collusion with insiders at various hospital who would be convinced to hike the patients’ fees.

Our source also detailed how unmarried male police officers have become victims of fraudsters preying on NHIF, and had their cover depleted.

“Fake cards are generated and given to women who are supposedly infertile to seek in-vitro-fertility (IVF) services. They pose as wives of these officers. In reality, no services are rendered, but money for the procedure is claimed and shared out between the crooks,” the source said.

Three private facilities in Bungoma are also under investigation on allegations of inflating bills and colluding with patients to defraud NHIF funds.

In another case reported to the police, a man identified as Hesbon is accused of creating fraudulent medical bills using the details of a woman based in Embu.

The charge sheet states, “Hesbon ...: On the 9th day of November 2018 at an unknown place within Nairobi County jointly with others not before the court, with intent to deceive and without lawful authority or excuse made a letter of financial undertaking in the name of the (woman) purporting it to be financial undertaking made by NHIF”.

His case, however, is yet to start.

And towards the end of last year, a woman was misdiagnosed with cancer at a hospital in Bungoma.

When she sought a second opinion, it was found that she did not have a cancerous growth.

When she asked the Bungoma facility to cancel her Sh70,000 bill as she did not receive any treatment, the hospital promised to do so. It did not.

She reported the facility to her local NHIF office, but whoever she spoke to told her the bill would have to be settled.

These are just some of the ways NHIF is bleeding funds that could otherwise be directed towards providing Kenyans with proper healthcare.

These complaints come at a time when the new board headed by Hannah Muriithi insists it is streamlining operations.

Having commissioned audits that have uncovered several malpractices, NHIF is now fighting numerous battles – both within and outside the organisation.

Last week, the board sought to set the record straight on what is ailing NHIF. Vice Chairman Roba Duba pointed out that the corruption allegations at the institution are largely historical, with some dating back to 2012.

“The current NHIF board realised that NHIF’s financial sustainability was at risk and worked under the guidance of the Cabinet Secretary for Health Sicily Kariuki to secure the future of the Fund,” said Duba, adding that at the centre of the vicious fight is a team of disgruntled people who want the status quo to prevail.

“We have a case where a patient visited a hospital for treatment every day of the year and you wonder how possible it is the person is still alive,” said Duba.

Duba noted that out of the Sh1.9 billion paid to a hospital in Nairobi, which has opened new branches almost everywhere, only Sh880 million were found to be genuine. This stems from inflated claims on dialysis, minor surgeries and capitation.

The other area where funds get lost is in administrative costs, which are above best practice worldwide. In the 2016/2017 year, the fund was gobbling a third of all money collected by NHIF. This year the board says it is at 14 per cent and targets to reduce it to below ten per cent.

In collusion with individuals inside NHIF, bank charges have also taken huge amounts which could have been avoided. In some instances, there was a duplication of accounts through which the fund dealt. It has been revealed that banks would charge for internal fund transfers from one account to another, both belonging to NHIF.

Publicity costs

Travel, emoluments and accommodation costs also took a considerable amount from the fund.

An average of Sh312 million would be used every year thus adding to the pressure on funds that would otherwise be used to treat sick Kenyans.

To achieve this, the fund has started to put in place austerity measures including cutting advertising and publicity costs by a whooping Sh653 million to just Sh100 million.

The bank charges have dropped drastically from Sh315 million to Sh45 million.

“This is not pleasing to some of the crooks who were eating from this fund and they have to fight back,” says Duba, adding that travel and accommodation has been reduced by Sh22 million.

When the hammer falls, there will be massive casualties as plans are afoot to lay off staff in the face of scheduled automation even as Duba insists that this will involve staff rationalisation, which will seek to place staff with their areas of specialisation.

Ms Muriithi says while the system is automated, it is disjointed; requiring human interface which essentially gives room for fishy dealings. Towards this end, the World Bank has put in Sh1 billion.

Duba adds: “The management has also taken initiatives to leverage on the existing ICT platform as a way of handling the increasing workload and reducing the reliance on paperwork and human intervention for benefits and claims operations.”

The fund covers only 20 per cent of the Kenyan population leaving a huge chunk who are mainly in the informal sector exposed. But the fund’s Strategic Plan envisages that by 2022, 19 million more will be principal contributors.

jookoth@standardmedia.co.ke