Revealed: The people behind Sh7 billion 'NHIF heist'
The NHIF building in Nairobi.
What you need to know:
- Mr Otieno and his staff of 17 medics could not explain the manipulation of radiology films.
MPs were also told that Ms Otele only works from home, and no one questions her absence.
The National Assembly Departmental Committee on Health has unmasked the individuals it says were at the centre of a scheme that saw the National Hospital Insurance Fund (NHIF) defrauded over Sh7 billion.
In its official report, the committee led by Endebess MP Robert Pukose highlighted that it relied on submissions by Ms Khadija Ali, an employee of NHIF who it describes as a very reliable source.
Ms Judith Otele and Dr Humphrey Otele
Ms Khadija revealed that NHIF case management manager Judith Otele approved claims from health facilities involved and adversely mentioned in fraudulent activities associated with her husband, Dr Willy Humphrey Otele, a urologist by profession (registration number A3165).
She explained that NHIF pays out over 90 per cent of the Sh80 billion, amounting to approximately Sh72 billion, paid to all healthcare providers. A significant amount, that is, over 80 % of the payouts, are approved under the stewardship and authority of Ms Otele.
"The case manager supervises around 15 case management officers stationed at the head office. Ms Otele is also involved in approving surgical and other pre-authorised requests. Internal audits have failed to flag her involvement in approvals as a risk, and of great concern is her role in 6 of the facilities captured in the expose by NTV," she told MPs.
Regarding Ms Otele's husband, Ms Khadija disclosed that Dr Otele performed surgeries in many hospitals across the country, including some of the facilities involved in the fraud activities highlighted in the NTV expose. "These surgeries are of high value and are approved and cleared by his wife," she said.
The NHIF employee blamed the national insurer's HR department for sleeping on the job.
"This is a huge conflict of interest that the Fund's HR department should have pointed out and handled, "she said.
Ms Khadija added that any staff member who questions the case management manager's conduct is viewed as an enemy of the system and is transferred.
"For instance, one was transferred in August 2021 for refusing to pay a claim worth Sh3.3 million approved by Ms Otele. The claim was paid immediately and the branch manager was moved."
MPs were also told that Ms Otele only works from home, and no one questions her absence.
Overseas claims
According to Ms Khadija, for overseas claims, Ms Otele approves the guarantee of payments (GOPs) not backed by any document or standard operating procedures (SOPs). "She has sabotaged any efforts to implement such processes," the MPs heard.
"She works with some cartel overseas hospitals, mostly in India to agree on treatment costs for patients and goes ahead to approve (GOPs), continues to amend some while the patient is still abroad for treatment, and so NHIF goes ahead to make payments directly to the hospital as per GOP issued," the NHIF employee said. "Ms Otele travels to India a lot upon invitation of the hospital she does deals with on personal invitations. Her travel records are available at the HR department," Khadija said.
The committee was also informed that Ms Otele's husband has recruited 'cartel consultant doctors' to refer patients outside the country at a fee, with such referral cases being cleared by his wife who also issues a GOP.
Kennedy Otieno
The health committee recommended that Joy Nursing Home for Mr Kennedy Otieno be shut down.
Mr Otieno is the owner of Joy Nursing Home and in January this year admitted to the committee that he pocketed Sh400 million from NHIF claims between 2021 and 2023 with the insurer still owing him Sh78 million.
While then responding to queries fielded by the committee during a fact-finding mission, Mr Kennedy Otieno asked the MPS to go find out from KMPDC how they got licensed and accredited to become a Level 4 facility despite having only 21 beds against the 30-bed requirement each for male and female, dilapidated, dirty toilets, no electricity, only one microscope and no emergency exit.
"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, a member of the committee 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.
Mr Otieno is a trained nurse by profession and holds a diploma.
"I used to run a chemist here, which grew and gave birth to this hospital in 2006."
"You see, we did not license ourselves. Someone from KMPDC came over to do the inspection, approved us, and gave us accreditation," the owner explained to the committee.
Regarding referrals from Jekim Hospital Nkubu Limited, he submitted that doctors at his facility could bring patients but would not know where these patients came from.
"The list of doctors, according to report include Michael Wachira, David Nyawade, Cosmas Mutisya, Emily Bosibori, Duncan Ndeda, Patrick Gicheru, Juma Olunga, Martin Ajujo, John Mandela, Ephantus Munyuko, Commulita Agunda, Kenneth Aluora, Paul Mbalu, Stephen Waruru, Joseph Mutio, George Ndung'u and Juliet Thitai," the parliamentary report highlights.
The facility also did not have a referral policy or contract agreement with the seven surgeons to whom he had given admitting rights.
Mr Otieno and his staff of 17 medics could not explain the manipulation of radiology films and reports for pre authorisation, and lacked supporting documents to justify surgical procedures in 54 claims worth Sh7,010,000 and billing for surgical services worth Sh5,385,000.
On the issue of referrals from Jekim Hospital Nkubu Limited, Mr Otieno told MPs that doctors at his facility could bring patients but he did not know where they came from.
Mr Issac Ali
MPs were shocked to learn that Mr Issac Ali, the Head of provider Management (quality assurance lead) at NHIF, whom they have since had fired, is a geologist by profession with no training whatsoever on health matters. They wondered how he landed a job at NHIF as a Quality Assurance Manager.
"The role of quality assurance (QA) is to confirm claims from facilities under their jurisdictions for payment.
He submitted that there are 75 quality assurance officers though some branches like Kisii, Nyamira, Garissa and Lodwar do not have QA's," the committee noted.
A reassessment done by NHIF's quality assurance department between 23 August and September 2021 found that 1,400 healthcare providers had been assigned 'incorrect' Kenya Essential Package for Health (KEPH) levels.
Washington Okumu
Mr Washington Okumu, the head of ICT at the time of the 'NHIF heist,' is currently under investigation by the Ethics and Anti-Corruption Commission.
Two months ago, EACC detectives disclosed to the Nation that they had raided his house to gather evidence of his involvement in losing billions in fake claims.
NHIF told MPs that after a short-term intervention on benefits and claims targeting upscaling and overcosting by separation of IP service case-codes from the auto-generated rebates.
"The crude analysis of 42,800 requests suggested that NHIF could have lost up to Sh1.7 billion in exaggerated claims and ineligible claims, out of Sh5.78 billion worth of requisitions," the parliamentary report notes.
While making submissions on behalf of the ICT department NHIF board director James Kapkiwor said that their operations are supported by two systems, the Great Lakes system procured in 1998 and the electronic health information claim system.
He highlighted that when the fraudulent activities at NHIF happened, they were procuring an overhaul system upgrade at a total cost of Sh4.2 billion.
The Nation has, however, learnt that Mr Okumu now works at the Ministry of Information, Communications and Digital Economy after he moved from NHIF in the wake of the scandal.
In a telephone interview, CS Eliud Owalo confirmed that Mr Okumu now works there.
"I do not know him personally but I have established that he was brought here by the Public Service Commission (PSC)," the CS told Nation.
NHIF CEO Elijah Wachira assured none of those adversely implicated in 'NHIF Heist' had resumed work at the Fund.
"Anyone adversely mentioned in the report by NHIF and KMPDC as well as the parliamentary committee report still on suspension pending due process," he said.
