State to pay hospitals Sh30bn owed by NHIF
Principal Secretary, State Department for Medical Services Harry Kimtai (left) addressing journalists on the Social Health Authority (SHA) rollout at SHA building, Nairobi on October 6, 2024.
The government has committed to settling the Sh30 billion owed to hospitals by the defunct National Health Insurance Fund (NHIF) as part of the ongoing transition to the Social Health Insurance Fund (SHIF).
This move is considered a crucial step to maintain these facilities’ trust and cooperation under SHIF. Already, Sh1.5 billion was paid last week, with plans to disburse an additional Sh3 billion this week. The remaining payments will be made progressively, based on the availability of funds.
Hospitals and other healthcare providers were hesitant to shift to SHA due to the financial strain caused by unpaid claims.
According to the management of these hospitals, these outstanding amounts have created operational challenges, with some facilities forced to delay services or find alternative means to stay afloat.
As part of the transition, the government has reassured stakeholders that it will address this outstanding financial obligation.
Questions persist about the payment timeline and the new system's ability to avoid the financial issues that affected NHIF, such as delays in processing claims and inadequate reimbursement rates.
Medical Services Principal Secretary Harry Kimtai stated that the concerns of most hospitals regarding the transition and debts were legitimate and would be addressed in due course.
“We will take on the assets and liabilities of NHIF. Our estimated outstanding debt is approximately Sh30 billion,” he said.
Sh1.5 billion
The Health ministry, he said, has formed a transition committee that has been taking stock of NHIF’s assets and liabilities.
“We have since released Sh1.5 billion. This week, we will release another Sh3 billion. We have also formed a committee that will oversee claims payment and disbursement of funds. We will not favour any hospital as far as payment is concerned,” he said.
“Whatever amount we have at the ministry, we will just use a percentage and declare that out of the amount that we have, we will pay hospitals a flat rate so that we clear the debts to assure them that there will be no debts carried forward with the transition,” Mr Kimtai added.
The PS said that moving forward with the transition, payment of claims would not be delayed since the current system can monitor claims as they come in, with the system as of yesterday capturing Sh100 million to be paid to hospitals.
“We have given a directive to SHA (Social Health Authority) that they need to pay the claims within 90 days of being lodged. This will bring confidence and satisfaction to everyone. We want sanity to ensure that those who are investing in the business are sure of their returns so that they can grow,” he said
Earlier, dialysis clinics across the country demanded that NHIF settle a pending Sh10 billion debt before transitioning to SHIF. Some have maintained that they will only transition after their outstanding payments are settled.
Hospital administrators have raised concerns that currently there is no formal mechanism to address the crippling debt.
“We have worked closely with NHIF for over two decades to provide quality health care for patients with kidney disease, however, we are deeply concerned by the NHIF’s failure to adjust the reimbursement rate to match the market condition and to fully remit claims,” said Dr Jonathan Wala, chairman of the Kenya Renal Association.
He added: “This financial shortfall has forced several dialysis units to shut down, undoing much of the progress made. The now-defunct NHIF owes dialysis providers more than Sh10 billion.”
SHA system
With the transition, Kenyans are facing a series of significant problems, with the most glaring being the increased financial burden. Under NHIF, the maximum contribution was Sh1,700. However, under SHA, individuals are now required to contribute 2.75 per cent of their basic salary or household income.
Hospitals are also grappling with access to the SHA system. A number of them are yet to receive a formal contract to be onboarded onto the system. The system has been down since the registration started on Monday this week. Many facilities have reported that they cannot access the platform, leaving them unable to process claims or register patients.
Further, patients who have registered with SHA are discovering that their names are missing from the system, preventing them from receiving services.
The cost of implementing the SHA system has also come under sharp criticism. The SHA system reportedly cost taxpayers a staggering Sh104 billion, an amount significantly higher than the Sh700 million it would have cost had the government opted to upgrade the existing NHIF system.
MPs have questioned why a new health information system would cost billions, adding that the Integrated Healthcare Information Technology System was rushed and lacked adequate public participation.
For patients and healthcare providers, the shift from NHIF to SHA in the last two weeks has been chaotic. Some Kenyans feel they are paying more for a system that is not yet fully operational, leading to widespread confusion and anxiety.
As service providers continue to struggle with onboarding issues and system failures, the success of SHA hangs in the balance, with both hospitals and patients bearing the brunt of the challenges.
