NHIF loses Sh10 billion through fake claims from health facilities

National Health Insurance Fund (NHIF) loses Sh10 billion every year through fraudulent claims.

NHIF Chief Executive Officer Peter Kamunyo said the funds are lost through impersonation and fictitious claims by public and private hospitals thus denying millions of deserving Kenyans quality health care.

Dr Kamunyo revealed that they had discovered the fake claims by looking at some trends.

He cited the case of a woman who used her NHIF card in Eldoret, gave it to her mother to seek treatment at a health facility in Kitengela and Nairobi Hospital, and later the cardholder used it at Coptic hospital, all within a month.

“We realised it when we were told the patient’s mother died, then as we were processing the payments, the same card was used by the owner who had delivered at Coptic hospital, so through the different activities we got to know that different people had used it,” he said.

In another incident, a senior civil servant gave his NHIF card to his father to seek treatment, unfortunately, he died and when they were processing payment for the last expense, the man came out and declared that it is his father who had died.

A man was also billed for a major surgery and around the same time, he had several claims for other ailments thus exposing the fictitious claims.

The CEO said some hospitals present claims of major surgeries when a patient has undergone a minor procedure.

“We have stepped up our claims investigations desk, we found out a case where a small clinic the size of a kiosk shop was making claims of Sh15 million every month, when our team went to check they reasilised that they were fake claims,” said Kamunyo during a media engagement in Naivasha on Friday.

The NHIF boss noted that out of the Sh61 billion collected from formal, informal sector and sponsored members in the last financial year more than 91 per cent was paid out to claims from the hospitals across the country amounting to Sh54 billion.

Active cases in court

“The sad bit is that we lose 20 per cent of our collections from our members to fraudulent and fictitious claims. We already have 19 active cases in court for the hospital owners and some of the people who were raising the fake claims,” he said.

The national insurer has 7,666 healthcare providers empaneled by NHIF including 5,833 government facilities which make 75 per cent of the providers, 1,619 private hospitals representing 21 per cent healthcare providers, and 314 faith-based facilities (four per cent). 

NHIF operates 156 service points across the country comprising of 70 branch offices, 33 satellite offices and service desks and counters in all 53 Huduma Centres. Currently, NHIF covers more than 23 million Kenyans, with 10.1 million being principal contributors and the rest are dependents including spouses and children.

These contributions are from formal, informal sector and sponsored members who have access to an elaborate healthcare package.

Through biometric registration and identification, adoption of electronic claims management system, the implementation of member and employer self-care platforms, Kamunyo said the fraudulent claims will be a thing of the past. 

“In the new future, the fraudulent claims will no longer be there, we have rolled out a massive biometric registration of our members, this means that one will be identified biometrically and use make claims which will automatically be captured out our systems immediately,” he added. 

The CEO said the electronic claims management system will enable them to conduct forensic audit of the claims unlike before when they relied on paperwork which took a lot of time to compile.

“Once we complete this, payment of claims will also be near-instant and the fraudulent claims will drop in percentage to zero,” said Kamunyo. 

He noted that administrative expenditure has reduced from 22.2 per cent in 2016/17 financial year to 11 per cent in 2020/2021 after outsourcing of non-core services.

Out of the Sh54 billion paid to claims, 70 per cent went to the public hospitals, 26 per cent to the faith-based institutions while four per cent went to the private facilities.

According to the Economic Survey 2021 released by the National Treasury, they paid out Sh54.4 billion in NHIF benefits in 2019-20, a 1.8 per cent increase from the previous year.

The NHIF boss said they were looking forward to the passing of  NHIF (Amendment) Bill, 2021 which seeks to have employers match the contributions of employees, to increase collections and achieve Universal Health Care.

“Once we have the employer matching the contribution by the employees and increase the membership, we will be able in our projections to collect Sh112 billion, with this we will be able to transform the health care system and achieve the Universal Health Care in a year’s time,” said Kamunyo.

He called on the legislators to make the membership of NHIF mandatory.

Under NHIF, cover households benefit from outpatient, inpatient services, maternal package, renal dialysis, rehabilitation for drugs and substance abuse and overseas treatment.

Others are cancer treatment including chemotherapy and radiotherapy, radiology imaging services X-rays, CT Scan and MRI), all surgical procedures including transplants and emergency road evacuation services.