Private hospitals in Kenya are warning that the Social Health Authority’s (SHA) push to digitize payments and root out fraud without human oversight is straining facilities to the breaking point.
The sector association says that digital reforms intended to streamline payments have instead created bottlenecks, leaving staff under-resourced and patients in rural counties facing sharply reduced access to care.It has argued that structural changes in the Ministry of Health have hollowed out enforcement capacity as nearly 1,000 Field Surveillance and Quality Assurance Officers who once verified claims in person have been redeployed or dismissed.In a statement, Cabinet Secretary Aden Duale said that KSh 10.6 billion in claims has already been rejected for suspected fraud, while another KSh 3 billion is under re-evaluation for missing documentation, and KSh 2.1 billion remains under surveillance.
According to Rural & Urban Private Hospitals Association of Kenya (RUPHA), the SHA ICT Directorate was gutted and demoted to a minor department, with its functions outsourced to the consultancy APEIRO, rendering the KSh 104 billion digital fraud-detection system largely ineffectual. From the hospitals’ perspective, billions in rejected claims and facility closures are not signs of a functioning system.
The challenges have been compounded by the closure of a dozen SHA branches, the defunding of the Kenya Medical Practitioners and Dentists Council, the neutering of the Kenya Health Professionals Oversight Authority, and the unwillingness to establish the Disputes Resolution Tribunal.
The Ministry of Health maintains that the crackdown is essential to protect the integrity of the flagship TaifaCare program. CS Duale has stated that fraud drains 3–15% of healthcare spending annually, making digital detection systems a priority for the battle against the vice. He has consistently branded attacks against SHA’s capacity to eradicate fraud as exaggerated and ill-willed.
The government has also singled out specific facilities for healthcare fraud and has announced the closure of 728 facilities, the downgrading of 301, and suspension of 40. Some of the listed culprits include Nabuala Hospital in Bungoma allegedly billed repeatedly for Caesarean sections on a single patient; Jambo Jipya Hospital in Mtwapa charged for surgeries performed on natural births; Vebeneza Medical Center in Nairobi and New Manyalo Nursing Home in Wajir reportedly inflated outpatient visits into inpatient claims. Several health care providers in Mandera county were especially notorious for filing fraudulent claims.
A System in Shambles
Last weekend, Kenyans on social media tracked SHA disbursements to medical facilities countrywide as recorded in the Kenya Master Health Facility Registry (KMHFR). Many of the hospitals that had been categorized as Level 4 hospitals were either in deplorable condition or lacking inpatient beds. This has intensified suspicion that most of the facilities that receive SHA funding are conduits for stealing money by politically connected individuals.
One of the most pressing claims on social media was that Ladnan Hospital in Nairobi benefited from disproportionate SHA payments as it was connected to SHA chairperson Abdi Mohamed. The hospital has moved to dispel these allegations, clarifying that it is now owned by Metropolitan Hospital Holdings Ltd and that Mohamed sold his shares in July 2023.
While the Ministry of Health maintains that no conflict of interest exists, the SHA disbursements are facing fresh scrutiny after the Master Health Facility Registry website went offline thus obscuring a detailed list of payments to hospitals. Medical Services Principal Secretary Ouma Oluga said the Ministry has formally requested the ICT Authority, which manages go.ke domains, to investigate the outage.
The ministry had said earlier that the social media discoveries largely reflect information already acted upon, with Duale claiming that many of the flagged hospitals had already closed, suspended, or downgraded as part of ongoing audits.
“I want genuine Kenyans who come to us every day, who report to us every day, who have become our whistleblower and what they tell us is exactly what our system, our forensic auditors have picked,” CS Duale said.
Since the program’s launch in October 2024, hospitals have submitted KSh 82.7 billion in claims to the Social Health Insurance Fund, of which KSh 53 billion has been paid, and verified claims totaling KSh 6.4 billion await disbursement. However, the private hospital’s association reports that KSh 76 billion in reimbursements, spanning legacy NHIF debts and SHA claims, remains unpaid.
Hospitals report that deletions and downgrades of thousands of inpatient and maternity beds from SHA records have effectively stripped providers of payment rights, raising questions about selective enforcement.