Over Sh10 billion feared lost in new NHIF pay scandal

The National Hospital Insurance Fund (NHIF) could have lost more than Sh10 billion in false medical claims, investigations have said.

Sources said the figure had been flagged as fraudulent and was part of about Sh50 billion paid to NHIF by Treasury as capitation premiums for medical cover for civil servants, Kenya Police Service, National Youth Service and Kenya Prisons Service since 2013.  

Payment arrangement

Capitation is a payment arrangement for healthcare service providers whereby a physician or group of physicians are paid a set amount for each enrolled patient assigned to them.

The investigations are focusing on reports that some rogue NHIF officials might have colluded with hospitals to generate false medical bills for workers who had never sought treatment.

The detectives were said to have stumbled on a pile of documents related to premiums from special medical schemes worth Sh12.7 billion annually in which it was suspected that some NHIF officials and hospitals’ administrations conspired to double-charge the Government in medical bills.

Healthcare service providers involved in the programme and brokerage firms that were used in collecting the premiums are also under investigation for suspected inflation of figures. 

Reports indicate that several NHIF staff have been interrogated and more are scheduled to be summoned by the Directorate of Criminal Investigations (DCI), whose director, George Kinoti described the scandal as a massive rip-off.

“This is the most cruel graft I have so far encountered. These merciless people have been stealing patients’ money, leaving them to die,” said Mr Kinoti.

He explained that the probe was in the tail-end and that those responsible would be arraigned soon. 

“We are talking to all those who played any role in this issue before we make our conclusions and recommendations. It doesn’t matter who they are.”

The investigation has roped in a number of hospitals.

“We are investigating many hospitals over this issue. It is massive but we are progressing well,” said Kinoti.

The DCI has set up a desk to handle the matter. Officials from the Office of the Director of Public Prosecutions are also part of the probe team. 

Two weeks ago, several doctors at a city hospital went to court to stop DCI from confiscating medical documents and computers.

DCI had obtained a court order requiring the hospital to produce books of account, invoices and claims for payment by NHIF from 2013 to date.

The DCI sought the order to enable it to investigate suspected misappropriation of funds at NHIF.

The order given on October 31, 2018, by a chief magistrate’s court allowed detectives to take away computers or any electronic gadget relevant to their probe.

According to documents, the DCI informed the court that it was investigating misappropriation of funds at NHIF and sought permission to search the hospitals and private residences of doctors.

But the doctors argued that the DCI never served them with the orders. They also argued that they were neither employees of the hospital nor NHIF and as such, had no access to any books of account.

Records indicate that NHIF received Sh47.8 billion in contributions in 2017/2018.

This includes Sh32.9 billion from members, Sh12.7 billion as premiums from special medical schemes, and Sh2 billion from other sources.

The insurer received Sh5.2 billion a year from the Treasury between 2012 and 2015 and another Sh5 billion annually for the National Police Service since 2016.

NHIF’s mandate

The Insurance Regulatory Authority opposed this, cautioning that collection of premiums was not within NHIF’s mandate.

Records indicate that outpatient and inpatient claims from NHIF rose significantly between 2016 and 2017.

Detectives want to establish if some of the cases were fraudulently lodged.