NHIF Fraud: 3 hospitals shut down. For good

National Health Insurance Fund

National Health Insurance Fund headquarters in Nairobi on November 22, 2023.

Photo credit: File | Nation Media Group

A year-long investigation into hospitals accused of defrauding the National Health Insurance Fund has finally come to an end, exonerating 12 of the 15 medical facilities involved and permanently closing the remaining three that were under investigation.

A report by the parliamentary health committee, headed by Endebess MP Dr Robert Pukose, recommended the closure of Joy Nursing Home, Amal Hospital Limited and Beirut Pharmacy and Medical Centre.

This follows an exposé by the Nation in June last year, which showed how some facilities were using unscrupulous means to obtain payments from the now-defunct National Health Insurance Fund (NHIF).

The three hospitals were closed for various reasons, including fraud.

At Joy Nursing Home, the audit shows that there was evidence that patients were taken to Jekim Hospital Nkubu Ltd for X-rays and then transferred to Joy Nursing and Maternity Eastleigh Limited for further treatment, without surgery being performed. This was confirmed by a review of about 13 phone calls.

NHIF was also unable to recover 201 patient files worth Sh25,495,020 from the medical records of patients at Joy Nursing Home.

Nation's findings of patients being transferred from Meru and Tharaka Nithi counties were also corroborated by NHIF's findings.

When asked how Joy Nursing Home obtained its accreditation, Kennedy Otieno, the owner, asked committee members to ask the Kenya Medical Practitioners and Dentists Council (KMPDC) who accredited the facility. In addition, NHIF Quality Health Assurance officials from Eastleigh also inspected the facility to approve it for accreditation.

“We deal with about twenty patients a day. Initially, we had 40 beds but when we were expanding we removed beds to give way for a second theatre, optical and dental room,” He told Nyeri Town MP Hon Duncan Mathenge, one of the Health committee members, who also sought to know why they did not have a blood transfusion unit, life support equipment and a mortuary among other key requirements for a Level 4 facility.

Amal Hospital Limited was previously categorised as a level 4 facility, but when the audit team at NHIF visited the facility, they found that it did not meet the criterion.

The hospital also received about 8, 063,000 for changing and falsifying information in collusion with members to deceive the defunct national insurer.

For Beirut Pharmacy and Medical Centre, NHIF officials located at the Eastleigh branch reported a loss of about Sh15,787,000 for not adhering to the guidelines of the payment process.

Amal and Beirut facilities’ cases have since been forwarded to the Ethics and Anti-Corruption Commission for further scrutiny.

The report also indicates the suspension of some specialists attached to hospitals like Jekim Hospital Nkubu Limited and Ruai Family Hospital (RFH).
The committee had various submissions from different stakeholders, including hospital officials and employees of NHIF.

In one submission, Khadija Ali, cited as an employee of NHIF wrote to the committee accusing one of the case managers, Judith Otele, of intimidating colleagues who probed some of her approvals.

While an internal audit from NHIF did not prove Ms Otele’s approvals for causing any risk, she was flagged for being involved in six facilities that were part of Nation’s exposé.

“Over 60 per cent of cases approved were done by her. She is married to one Dr Willy Humphrey Otele, a Urologist by practice, who does surgeries in many hospitals across the country including some facilities involved in fraud activity recently exposed, surgeries of high value that are cleared and approved by the stewardship of her wife Judith Otele,” revealed the committee’s report.

“For overseas claims, she approves the Guarantee of Payments that are not backed by any policy document and no Standard Operating Procedures (SOPs),” added the report.

They recommend that even as the country shifts to the Social Health Authority, the members should know that about 10 staff were irregularly appointed to work at NHIF.

The MPS highlight that NHIF’s short-term investments plummeted greatly in the previous financial year.

“Short-term investments reduced from Ksh13, 388,971,803 as of 50th June 2022 to Ksh8, 232,200,000 as of 30th June 2023. This implies that if all factors were held constant, the NHIF's financial sustainability would have been compromised,” showed the report.

The report also recommended that the National Treasury remit all the outstanding premiums owed in the provision of government-sponsored schemes.

The Directorate of Criminal Investigations (DCI) and EACC have been given about three months since the adoption of the report (in June) to conclude the investigations and audit of all the hospitals and parties involved.