Hospitals loot SHA through fake claims and ghost services - PS Oluga

Hospitals across the country have been accused of manipulating loopholes in the Social Health Authority (SHA) system to pocket millions of shillings for fraudulent medical claims, barely a year after the scheme began settling patient bills.

Medical Services Principal Secretary Ouma Oluga on Tuesday disclosed that some little-known facilities, including those linked to influential figures, had received millions for questionable services, raising concern about the credibility of SHA’s payment system.

He pointed out that between 28 and 35 per cent of medical claims in Kenya are fraudulent, ranging from inflated charges to ghost services.

“There are legitimate concerns because of transparency. For the first time in our history, you can go online and see how much each hospital has been paid. But the outrage should also be credited to us for giving out that information,” Oluga said.

The revelations follow a recent exposé showing small facilities with limited capacity raking in millions, even though they lacked the ability to provide the services they were being paid for. In response, the Ministry of Health has shut down 728 health facilities and downgraded 301 others.

Oluga explained how some hospitals trick inspectors by staging well-equipped facilities during inspection visits, only to remove the equipment once licensed.

“Some facilities claimed to be Level 4 hospitals when they were not. They would present high-end equipment and specialists during inspection, then remove them once licensed. That is why we acted,” he said.

“The inspectors give them the licence because they have seen those things. One year down the line, they open another branch or facility and take the X-ray machine that was in the first facility,” he added.

According to Oluga, the same trick is repeated at other branches, enabling the facilities to be contracted by SHA to deliver services they cannot provide.

“So it’s not that the inspectors were wrong… so what happens is that six months later, this facility cannot offer the services it registered for. SHA pulls that data from the medical council and contracts you to offer maternity services, but when wananchi go there, they cannot get maternity services,” he said.

Despite failing to meet requirements, such hospitals continue to receive payments for services never offered. To counter this, the ministry has set up a 24-hour hotline receiving about 3,000 calls daily from patients lodging complaints. Oluga said the hotline has become vital in exposing fraud.

“We check and find out that that hospital has actually claimed that they offer maternity services. Then we sent the regulator, the regulator says these guys registered to be offering maternity services, but the bed they had had been removed,” he said.

Once fraud is confirmed, the facilities are immediately suspended and their cases forwarded to the Directorate of Criminal Investigations (DCI).

Even as the scandal draws outrage, Oluga defended SHA as a step forward in accountability compared to the previous NHIF.
“For 62 years under NHIF, no one ever saw a hospital’s claim payments. This is the first time in the world you can go online and see those figures,” he said.

He further warned that fraud in the health sector reflects not only institutional malpractice but also cultural attitudes.

“It is criminal, yes, but it is also cultural. Hospitals register with equipment and top doctors to get licensed, then move them elsewhere. Patients are charged Sh1,500 for Panadol that should cost Sh30. This is everyday fraud,” he said.

Oluga concluded by calling for reforms alongside a change in mindset to achieve lasting solutions.

“As we point fingers at government, we must also point fingers at ourselves. We need people who love this country enough to stop cheating it,” he said.