Health Cabinet Secretary Aden Duale has confirmed that Ksh11 billion in Social Health Authority funds remains unaccounted for after systematic fraud by medical facilities.
The missing billions, lost within six months, consist of rejected claims following SHA’s AI-driven fraud detection system uncovering manipulation of medical records and inflated billing across Kenyan hospitals.
Appearing before a parliamentary committee on January 28, Duale disclosed alarming trends of theft involving hospitals that had previously defrauded the now defunct National Hospital Insurance Fund prior to SHA’s implementation.
Duale revealed that the fraud engine flagged facilities reporting impossible medical scenarios, including private hospitals claiming 100 per cent caesarean section deliveries, contrary to the World Health Organization’s (WHO) recommended 10-15 per cent rate.
“There are facilities in our country that have reported 100% of the mothers who came to deliver have gone through C-section,” Duale told the committee.
In Tharakanithi County, CS Duale disclosed that one private hospital claimed all 500 mothers who delivered at their facility underwent caesarean sections, resulting in automatic rejection by the system.
The Auditor General, Nancy Gathungu, also determined that a private consortium, allegedly connected to an Indian firm, controls the system.
The consortium is expected to collect approximately Ksh11 billion annually from member contributions and hospital claims, yet the Kenyan government doesn’t fully own the Ksh104 billion system.
SHA has issued a 15-day ultimatum to hospitals to account for Ksh3 billion in claims flagged for missing documentation or potential fraud before payments are processed.
The audit also discovered reports that some health care workers had registered themselves as fake patients to generate fake claims from SHA, while other hospitals had periods where all births were cesarean sections with no natural births reported.
Investigations revealed that claim forms were filled out by single individuals using a single pen and handwriting, rather than the legally required signatures of patients, doctors, and hospital administrators.
“As to where we find, SHA finds, that claim forms are filled by one person, one handwriting, one pen, that is a rejection,” Duale explained.
He further disclosed that facilities submitted maternity claims without birth notification documents, a mandatory requirement when babies are delivered in hospitals, leading to automatic rejections worth billions of shillings.
The AI system also detected ghost patients visiting primary healthcare facilities ten times daily in one county, exposing coordinated attempts to inflate capitation payments from the government.
He highlighted one incident in Kwale County where one patient registered 381 dependent children under their SHA account, a case now under prosecution.
The claims to have paid over Ksh11.4 billion to hospitals since SHA’s rollout, while private facilities under the Rural and Urban Private Hospitals Association (RUPHA) say they’re owed Ksh76 billion by SHA.
Duale emphasized the fraud detection system’s real-time capabilities, flagging anomalies such as patients undergoing 10 dialysis sessions when medical standards allow only 2, fully covered by SHA.