Spotlight on CS Duale, Mwangangi as health crisis deepens following SHA- SHIF OTP’s systems flop

Kenya’s healthcare is metaphorically ailing with the collapse of the OTP-based authorisation for the Social Health Authority (SHA) and the Social Health Insurance Fund (SHIF).

This has forced the government to disband the OTP system and replace it with biometric screening as it emerged that health facilities were making multiple claims for reimbursement from SHA.

Reports have emerged of patients being stranded in hospitals across the country following the government’s move, leaving families grappling with huge hospital bills, particularly patients suffering chronic ailments.

Civil servants are the latest lot to be affected by the failure of the much-hyped Sh104billion privately owned system after the Kenya Healthcare Federation (KHF) informed SHA Chief Executive Officer (CEO) Mercy Mwangangi that private healthcare providers will no longer treat civil servants unless the pay cash.

This unprecedented move by KHF through a letter to Mwangangi dated August 7, 2025 was occasioned by government failure to release payments spanning over nine months.

This comes even as spouses and children of deceased civil servants and National Youth Service (NYS) officers have been left high and dry after SHA CEO failed to act on a letter by National Treasury Principal Secretary Dr Chris Kiptoo asking SHA to settle Sh8.14 billion in premiums under a contract between the defunct National Hospital Insurance Fund (NHIF) and two insurance companies.

This has incapacitated the National Treasury’s plan to process last expense claims amounting to over Sh4.2 billion.

Also pending are funeral claims amounting to Sh207,300,000, which families of 1,026 deceased civil servants have been pursuing in vain. In addition, 1,267 civil servants who were injured in the course of their work are owed over Sh1.65 billion.

On civil servants’ issue, KHF told Mwangangi that private healthcare providers can no longer sustain the financial burden of treating public servants without compensation from the government’s health insurance scheme.

“Unless the outstanding claims are settled per the contractual terms, providers will have no choice but to request that public servants pay for both past and future medical bills directly, and then seek reimbursement from their employers and/or the SHA,” the letter signed by KHF chairperson Dr. Kanyenje Gakombe reads in part.

The letter by KHF to Mwangangi was copied to Christian Hospital Association of Kenya, Rural and Urban Private Hospital Association (RUPHA), Association of Kenya Private Hospitals and to the Kenya Conference of Catholic Bishops’ health services, dental associations and pharmaceutical societies.

While launching the biometric identification system at the Kenyatta University Teaching Referral and Research Hospital (KUTRRH), Health Cabinet Secretary Aden Duale said the government has come up with the new screening method in order to eliminate loss of money through dubious claims.

This comes in the wake of reports that some hospitals and medical staffers are involved in illegal money minting schemes by making double claims for refunds to the Authority.

Duale now maintains that patients will no longer be required to present documents for verification on their SHA compliance.

The CS also warned that in order to get rid of unapproved pharmaceutical products being administered to the public and to eliminate counterfeit and substandard drugs, all pharmaceutical companies will be required to upload certified products data within 30 days or face deregistration.

For years, Kenya’s public healthcare system has been silently bleeding billions through fraudulent claims lodged by unscrupulous health facilities and medical staff.

Hospitals, clinics, and even some practitioners have been accused of minting illegal cash by making double claims for refunds to SHA, a practice that has eroded public trust and strained resources meant for patient care.

Some health facilities would bill SHA multiple times for the same patient visit, file for services never rendered, or charge for drugs never dispensed.

According to the government, the racket has resulted in massive losses of money that could otherwise strengthen the country’s universal health coverage ambitions.

To counter the fraud, the government is fighting back in a technological move that it says will avert further losses and enhance service delivery.

The government biometric system is fashioned to plug loopholes that have allowed ghost patients, fake prescriptions, and double claims to flourish, a move that could finally put an end to one of Kenya’s most-costly healthcare scandals.

Duale while unveiling the new verification system insisted it will bring to an end fraudulent billing and facilitate accountability into the system.

“This innovation will secure access to health services without having physical documents. It will help us eliminate fraud and misuse of benefits, reduce paperwork, shorten queues, and allow health workers to spend more time on patient care,” he said.

So far, over 25 million Kenyans have been registered under the SHA scheme, with more than 10,000 hospitals, clinics, and health centres contracted.

Since inception, SHA has reimbursed hospitals to the tune of Sh47.5 billion, while level two and three facilities have received Sh6.9 billion under the free Primary Healthcare Fund.

To fully heal the system that had started to rot, the government has gone beyond billing, extending its crackdown to pharmaceutical companies.

Now the CS has ordered all pharmaceutical firms to upload certified product data within 30 days or face deregistration saying the move is part of an effort to rid the market of counterfeit and substandard drugs.

“Failure to comply will result in deregistration and delisting from the SHA ecosystem. Effective immediately, SHA will only reimburse for drugs actually dispensed to patients by health facilities,” warned the CS.

In a stern caution to hospitals, Duale said any facility caught double-billing will be suspended immediately assuring that every patient interaction from diagnosis to prescription will now be recorded and tracked in real time.

“These reforms will stop theft, manipulation and ghost billing in the public system. Non-compliant and fraudulent facilities will be deregistered by the Kenya Medical Practitioners and Dentists Council within the Taifa Care Network,” he affirmed.