NHIF heist: How fraudsters made off with over Sh7bn in bogus insurance claims
The National Health Insurance Fund headquarters in Nairobi.
What you need to know:
- At Joy Hospital, investigators found that from July 2021 to May 25, 2023, the facility had submitted a total of 6,707 claims worth Sh368,868,453.
- Officials at the NHIF Eastleigh Branch failed to exercise due diligence in the execution of the contract and processing of claims, resulting in a loss of funds amounting to Sh15,787,000.
Unscrupulous businessmen defrauded the National Hospital Insurance Fund (NHIF) of over Sh7 billion by altering claims and falsifying information in collusion with NHIF officials, MPs have revealed in their latest report.
It follows months of investigations into how four suspended rogue health facilities, including Joy Nursing and Maternity, Amal and Beirut hospitals in Eastleigh and St Peters Orthopaedics and Speciality Centre in Kangemi, preyed on unsuspecting elderly people in Meru County to siphon billions from the health insurer.
According to the findings of a detailed audit report commissioned by the National Assembly Departmental Committee on Health led by Endebess MP Robert Pukose, Beirut Pharmacy and Medical Centre, was updated in the NHIF system and awarded a contract for inpatient and surgical services by the Kenya Medical and Dentist Practitioners Union (KMPDU) without assessment and gazetting.
The report indicates that this resulted in irregular payment of Sh153, 439,360, Joy Hospital defrauded the insurer of Sh368,868,453, Amal Hospital stole Sh33,473,542 while St Peters, which investigators say is one of the top 10 'highest-paid' institutions, made off with Sh1,632,461,500. 10.
In the first audit report on Beirut, the MPs found that the facility engaged in fraudulent practices by altering and falsifying information in collusion with members and defrauded the Board of Sh16,307,000 out of Sh17,850,000 of NHIF claims sampled, representing 91.4 per cent fraudulent payments.
They highlight that officials at the NHIF Eastleigh Branch failed to exercise due diligence in the execution of the contract and processing of claims, resulting in a loss of funds amounting to Sh15,787,000.
According to the Registrar of Companies, the hospital was registered on October 12, 2018, and its directors are Abdikarim Ibrahim Hassan, postal address 71968 Juja, Virginia Nduku Ngemu, postal address 438 Eastleigh, Yussuf Maalim Haret, postal address 77985 Eastleigh, and Mohamed Bare Abdille, postal address 1755 Eastleigh.
1,706 claims
From January 1, 2022, to June 1, 2023, the hospital submitted a total of 1,706 claims. Of these claims, 1,592 have been paid, amounting to Sh153,439,360, while 114 claims totalling to Sh13,198,580 are still being processed for payment.
Of the paid claims, 858 claims amounting to Sh59,461,360 (38.2 per cent) related to extended schemes, 731 claims amounting to Sh93,888,000 (61.2 per cent) major surgery and three claims amounting to Sh90,000 (0.06 per cent) minor surgery, the audit report explained.
The report further indicated that the investigation involved data modelling and mining techniques on paid claims patterns, review of system records such as surgical pre-authorisation forms (NHIF 8D), radiology reports, e-claim documents, healthcare providers and medical records.
"It also involved review of employer records, telephone outreach and face-to-face interviews with beneficiaries."
At Joy Hospital, investigators found that from July 2021 to May 25, 2023, the facility had submitted a total of 6,707 claims worth Sh368,868,453, of which 2698 claims worth Sh3,835,164 were for outpatient services, while 4,009 claims worth Sh365,033,289 were for inpatient services.
A further review revealed that 2,397 claims worth Sh297,807,999 were for major surgeries, 832 claims worth Sh59,285,090.00 were for managed schemes and 77 claims worth Sh2,335,000.00 were for minor surgeries.
"A visit by the audit team to the facility on 23/06/2023 revealed a discrepancy between the registered and actual bed count.
“The team noted a bed count of 19 beds (including three in the maternity ward) against a reported bed capacity of 40 (forty) in the NHIF system, notwithstanding the fact that the facility has had licences with a capacity of 51 since 2018," the audit report said, recalling that a level 4 facility should have a minimum of 30 male and 30 female beds as per the requirement.
"The hospital admitted up to 41 patients on 18 and March 22, 2022, April 3, 2022, May 6, 2022 and February 20, 2023 resulting in excess capacity of Sh7,764,450.00 in paid claims."
The investigators then sampled medical records of 448 patients worth Sh56,602,480 for audit and clinical verification, of which the facility only utilised 69 worth Sh8,410,000 on the first visit to the facility on June 23, 2023, of which 64 files worth Sh7,790,000 were unpayable due to different medical procedures as per medical records.
"In response to the hospital's audit, the Director replied by email dated 1/08/2023 that the patient files that were not availed on 23 June 2023 were available for inspection.
A total of 269 files were availed for the second review but only 178 files valued at Sh22,587,460 were reviewed."
The investigators reveal that interestingly, they noticed a similar handwriting pattern for different nurses on duty on the nursing cardex.
"In addition, five surgical procedures worth Sh650,000 were found to have been performed outside the scope of services and signed contracts at Mother & Child Hospital.
Despite further review of patient medical records, the facility was unable to retrieve 201 patient records worth Sh25,495,020".
The audit report further reveals that the investigators tested 1,137 claim notifications from September 1 to April 30, 2023, worth Sh 141,860,000 for transfer claims and authenticity and found that the hospital had pre-authorised for surgeries but the diagnosis in the MOH was non-surgical such as osteoarthritis and lumbago.
"They falsified a total of 54 radiology films and a report worth Sh7,010,000 where the facility manipulated pre-authorisation documents to justify surgical procedures.
The hospital also billed for surgical services that were not rendered (phantom billing) as 60 members interviewed (22 of whom were transported) confirmed that no surgeries were performed," the report said.
"The remaining 38 members who were also interviewed with claims amounting to 5,385,000 confirmed that no surgeries were performed. In addition, some members stated that they were induced with cash rewards ranging from Sh2,000 to Sh8,000 to have their biometrics registered with the HCP so that they could claim for surgical procedures."
According to the investigators, patients from Meru and Tharaka Nithi at the facility stated that they were taken for medical assessment at Jekin Hospital Nkubu Ltd, which is located in Meru County, and then transferred to JOY Nursing & Maternity Eastleigh in Nairobi, thus collaborating with the reports made by the 'NHIF Heist' Nation expose.
"The data shows that a total of 145 claims worth Sh18,750,000 were paid to Joy Nursing and Maternity Hospital for members who were ferried for treatment while 637 pre-authorisation documents and attachments worth Sh78,455,000 could not be downloaded for verification and confirmation because the NHIF system files were empty.
The hospital's outstanding claims as per the NHIF system for the period under review amount to Sh78,172,000," they noted before making a recommendation.
"The findings in this audit report cast doubt on the validity of the pending claims and therefore they should not be paid until they are verified by the Head Provider Management."
In the audit report on the Amal Hospital, the pattern of siphoning taxpayers' money from the NHIF appears to be the same as elsewhere.
"From July 1, 2022, to June 2023, the hospital submitted a total of 504 claims. Out of these claims, 267 claims worth Sh34,651,700 have been paid while 237 claims worth Sh32,248,500 are in the payment process.
Of the paid claims, 5 claims worth Sh156,500 (0.5%) were related to extended programmes (case code 30) and 262 claims (99.5%) were major surgeries (case code 07) totalling Sh34,495,200.
The major surgical procedures claimed by the hospital included Open Reduction and Internal Fixation (ORIF) which was the majority with 189 cases (37.2 per cent), removal of kidney stones 65 cases (12.8 per cent) and the remaining 254 (50 per cent) were other surgical procedures.
Of the more than 20 hospitals suspected of defrauding the NHIF in what they see as a grand theft scheme orchestrated by both NHIF insiders and fraudulent businessmen, the Kangemi-based St Peters Orthopaedics and Speciality Centre has so far shocked them the most.
Not only is the facility one of the top ten NHIF payers, receiving the highest amount of Sh1,632,461,500.10, but it also received 22.8 per cent of the total amount paid by the insurer.
"96.2 per cent of the claims submitted by St Peter's Orthopaedics and Surgical Specialty Centre Limited were for major and specialised surgeries. Minor operations accounted for only 3.8 per cent.
A perusal of 82 patient files totalling Sh17,579,500 for the period September 27 and November 16, 2022, showed that 57 claims amounting to Sh11,729,500 had different dates of admission between NHIF records and hospital flyers," the investigators observed, noting that due diligence was not done by NHIF in processing the claims.
"Five of the 82 admissions were referred to the facility while the rest were walk-ins as there were no prior medical notes or referral letters in the patients' files, indicating that most of these operations were elective.
Hospital records showed that 18 admissions were from Kiambu, ten from Nairobi, eight each from Muranga and Nakuru, four from Embu and Meru, three each from Nyeri, Kirinyaga, Machakos and Nyandarua, two each from Tharaka Nithi and Laikipia, one each from Kitui, Siaya, Makueni, Kitui and Kisii, while nine cases were not indicated in the patient records," the researchers found.
