NHIF boss admits staff colluded with hospitals to defraud the institution

NHIF Building

The National Health Insurance Fund headquarters in Nairobi.

Photo credit: File I Nation Media Group

What you need to know:

  • The Chairperson of the Kenya Association of Private Hospitals said that it is hard for a facility to defraud NHIF without help from insiders since all surgical procedures undergo several stages of approval and scrutiny.
  • NHIF is seeking reimbursement of a total of over Sh49 million from the eight hospitals, found to have committed different malpractices.

The National Hospital Insurance Fund management today admitted that some staff from the institution colluded with private hospitals to defraud the institution of billions of shillings.

While appearing before the Senate Committee on Health yesterday, NHIF boss Elijah Wachira explained that 12 staff of the institution were found culpable, underwent disciplinary procedures, and three were terminated.  The other nine were suspended pending deliberations and direction from the board.

In June 2023, “Nation”, in an expose, revealed how private hospitals defrauded NHIF millions of shillings through exaggerated claims.  Mr Wachira also announced that eight organisations that were exposed were suspended, but that investigations have only been carried out on six and results submitted to the NHIF board. Investigations on the other two are still pending.

Appearing before the committee, Dr Abdi Mohamed, the Chairperson of the Kenya Association of Private Hospitals said that it is hard for a facility to defraud NHIF without help from insiders since all surgical procedures undergo several stages of approval and scrutiny before a claim is processed for payment.

The steps include pre-authorisation, where a health facility submits a request, containing the name of the patient, NHIF number, condition, cost of the procedure and the doctor doing it.  The request may be approved, returned or rejected. The next step is surveillance, where following a patient’s admission, NHIF seeks confirmation of a patient’s admission, while the patient is in a hospital ward. Following this, the patient information is entered into the NHIF system. Emergency cases and hospital stays for more than six days would also need NHIF approval.

He also explained that health providers can manipulate their payment mechanisms to commit fraud, including capitation, using genuine patient information, to fabricate entire claims or padding otherwise legitimate claims with charges for procedures that did not take place.

“A provider can also perform medically unnecessary services solely for generating insurance payments, misrepresenting non-covered treatments as medically necessary for obtaining insurance payments, falsifying a patient’s diagnosis and medical records to justify tests, billing for each step of a procedure as if they were separate, billing a patient for services that were repaid, and accepting or giving kickbacks for patient referrals,” said Dr Mohamed.

Dr Brian Lishenga, the National Chairperson of the Rural Private Hospitals Association of Kenya blamed NHIF branches as the weakest link in managing medical fraud. The branches, he said, have “weak checks and balances with its headquarters, and have cartels that have been entrenched by branch officials who have overstayed at stations. Appointment of friends and associates to positions of authority, without proper regard to their qualifications, understaffing and unqualified personnel at NHIF branches has weakened quality control and accounting departments.

The organisations, whose suspension has been extended for an additional 90 days by the NHIF board audit committee include Afya Bora Hospital, Afya Bora Hospital Annex, Joy Nursing and Maternity Eastleigh, Jekim Hospital Nkubu, Jekim Medical Centre and St Peters Orthopedic and Specialty Centre. Beirut Pharmacy and Medical Centre and Amal Hospital filed a commercial suit.

According to NHIF boss Mr Wachira, NHIF is seeking reimbursement of a total of over Sh49 million from the eight hospitals, found to have committed different malpractices.

Investigations revealed that Jekim Hospital Nkubu “did not maintain medical records, and was found to have lodged claims for services which were found during accreditation but were missing at the time of the investigation.”

“Investigation on the long duration of admissions showed that the facility would discharge the patient physically and continue claiming rebate amount then discharge the patient on biometrics on a review visit. This led to the facility claiming twice for the same procedure,” said Wachira.

Jekim Medical Centre submitted claims using the wrong codes. In this case, the facility falsely billed for higher-priced treatments than were provided. The institution also shied away from providing records to verify the claims of fraud. 

Joy Nursing and Maternity Eastleigh was found to have presented claims for more surgeries and inpatient admissions than were true, and failed to provide files for investigations, among others. 

Afya Bora Hospital was found to have claimed for surgical procedures that were not supported by theatre lists, and undertook surgeries within an impossible timeframe.

“15, 21, 12, 10, 15 and 9 major surgical procedures were performed by one doctor on January 22, February 7 April 3, March 27, January 27 and January 30, notwithstanding that the facility has two theatres.  The facility requested for a major surgery which was approved, but claimants reported that minor incisions and drug applications were done,” said Mr Wachira.

Afya Bora Hospital Annex Ltd was found to have provided different registration licenses, suggesting that they may have provided falsified information to the fund.  Patients paid a total of Sh12 million for services not rendered.

Investigations also showed that St Peter’s Orthopedic and Surgical Specialty Centre filed 119 claims with discrepancies, amounting to Sh14 million, while Amal Hospital filed claims amounting to Sh8 million.  Beirut Pharmacy and Medical Centre filed a total of 1706 claims, some suspicious, leading to a loss of Sh15 million

Before the committee, officials from Afya Bora Hospital and St Peters Orthopedic Specialty Centre defended themselves, saying allegations of fraud and malpractice were false.

Dr Wachira Wagoko from Afya Bora Hospital said he was shocked to learn about the hospital’s suspension following the expose, and that the hospital is yet to receive any communication about the alleged offences. The hospital, he said, was reopened in September 2023.

“We wish to state that the allegations that many surgeries were done in a single day by one surgeon are false. Our hospital is a well-equipped level 4 facility with two modern theatres, two resident surgeons and multiple visiting surgeons. There were no specific cases raised for us to provide substantive information on the same,” said Dr Wagoko.

“A purported refund of Sh12, 640,000 is false and an injustice. The hospital offers emergency services to all patients in need regardless of approval status. We have never received any letter of communication on any misdeed or warning for a corrective measure from NHIF,” he added.

Dr Wasena Gerald, Director and Lead Surgeon at St Peters Orthopedic Specialty Centre said that NHIF and the DCI conducted an audit into the hospital after the expose, but are yet to respond to them. Instead, he says the hospital was slapped with a 90-day extension of suspension. He also claims that the hospital was however cleared by the Kenya Medical Pharmacists and Practitioners Council (KMPDC) about a month after the expose

He also added that the only allegation they are guilty of is a mismatch of admission and discharge dates. The recommendation by NHIF for them to refund Sh14 million, he said, was unfair since “the hospital conducted the surgeries, which were necessary to save the patients.”

“The accusation that the dates of admission from our physical files differ from the fate of admission and share they have in their systems, occurs only in cases of emergency or system downtime.  It is also good to note that the patients were indeed attended to and services were offered as they verified this through phone calls to patients, so the claims are not in any way fictitious,” said Dr Wasena.

The Senate Committee on Health has suggested that the NHIF Board appear before them when parliament convenes again in January next year, to assess the results of the investigations and to determine the way forward. The other hospitals will also be allowed to share their side of the story.