Mystery firm among NHIF providers

Controversy over of the ambitious Sh4.2 billion civil servants medical cover scheme got messier on Thursday following mystery over the ownership of one of the key contracted health providers.

Clinix Healthcare Limited which was allocated Sh202 million in the first quarter is owned by Pharma Investment Holdings, an off-shore company which owns 99 per cent shares and a local company — Beneficial Limited — with one per cent shares.

Pharma, according to the Registrar of Companies, is not registered in Kenya.

State Counsel Margaret Wangu, in a letter to Parliament says documents presented for registration of the limited liability company indicate it is registered in the British Virgin Islands under number C. 1028943.

Clinix management

The management of Clinix confirmed on Thursday that Pharma owns 990 shares while Beneficial whose directors are two Kenyans — Mr Antony Shako and Mr Jewan Dabral — have 10 shares. Clinix declined to state its directors.

The Parliamentary Committee on Health investigating possible fraud in the NHIF civil servants medical cover programme, believes there is a scheme to cover up the real owners of the major shareholding company in Clinix.

The committee has declared the award to Clinix a scandal whose magnitude can only be compared to the Anglo-Leasing scandal.

Specifically, the committee is investigating allegations of irregularities in identification of service providers under the capitation scheme, raising questions on concerns on registration and licensing of facilities, medical staff, and generally the capacity by the health providers to offer healthcare services.

At the centre of the mystery in the ownership of Clinix is international businessman Jayesh Sairic said to be the brainchild of the suspected fraud.

He is a former managing director of Clinix Health Care according to the current chief executive officer Mr Zac Madana.

Being an election year, the Dr Robert Monda-led parliamentary team believes Clinix is being used to steal public funds for purposes of funding this year’s General Election and has declared that it will do everything within its powers to unearth the scam which has slowly been unfolding.

“We shall tell Kenyans who is fooling who. We may gamble with other sectors but not the health of Kenyans,” Dr Monda, the Nyaribari Chache MP declared at the end of yesterday’s grilling session with Clinix.

The committee claimed on Thursday that it is aware of a scheme by Clinix to manipulate the registration details of Pharma Holdings at the Registrar’s officer “so that information does not flow to Parliament on who the real owners are.”

So far in its investigations, the committee has been able to establish that both Meridian Medical Group and Clinix Healthcare at the centre of the controversy were allocated a total of Sh120 million by the NHIF under the capitation scheme for ghost facilities.

On Wednesday, Meridian chief executive officer Dr Peter Wambugu and chief operations officer Dr Diba Warioko were put to task by the committee after it emerged that six out of its 19 facilities were opened after the NHIF contract.

The committee has concluded that Meridian was paid Sh30 million for six ghost facilities while Clinix was paid Sh91.3 million for 21 outlets.

The Meridian management was also taken to task over the Kisumu outlet whose registration certificate expired in December last year and a renewal has not been obtained, four months into 2012.

The committee has confirmed from both institutions that they have only recently established some of the outlets being questioned, even though NHIF had already allocated funds for them.

It has become clear during committee hearings that both have been rushing to hurriedly open outlets around the country to cater for the increased volume of clients.

The team believes it is the agreement with NHIF that prompted the health providers to start opening facilities across the country.

Both health providers, however, have argued before the committee that they should not be faulted for opening more outlets across the country as they were only moving closer to their new clients and it was part of their business expansion strategies.

In total, the two providers are supposed to serve at least 440,000 members under the NHIF scheme.

Meridian has 32,000 principal members under the scheme while Clinix has 56,000, bringing the total number of principal members to 88,000.

The scheme covers principal members, their spouses and three children for each member.

Of concern to the parliamentary team — which includes Dr Eseli Simiyu (Kimilili), Mr Victor Munyaka (Machakos Town), Mr Fred Outa (Nyando), Mr Oyugi Mangwanga (Kasipul Kabondo) — is that of the 71 outlets of Clinix accredited by NHIF, 28 have been opened between the beginning of last month and Thursday.

The health provider only had 22 outlets by the end of last year and managed to open 21 new ones between January and March 2012.

In total, Clinix has opened 49 new outlets this year while Meridian which received Sh116.9 million in the first quarter of the scheme has opened six units.

Information before the committee from NHIF shows each of the outlets in question was allocated between Sh3 million and Sh16 million.

The committee is worried that rather use the money allocated to attend to NHIF clients, the two health providers may be using the funds to rapidly expand their businesses around the country.

Taxpayers’ money

“This is taxpayers’ money and we are worried that it is not being used to provide service but to expand even for a company whose ownership is shrouded in mystery as our public hospitals suffer from under-funding,” Dr Monda stated. Read (Cotu gives strike notice over new NHIF rates)

In Thursday's session, the key questions by committee members were where the bulk of the funds have been invested by the two firms, their capacity to handle their news clients and who the directors of Clinix are.

The committee is concerned that British Virgin Islands where Clinix is registered is home to some of the country’s known mega scandals, and the world’s worst and notorious financial secrecy jurisdiction and tax haven for local “thieves”.

“This pattern is very familiar. We remember Mobitelea, Kenren and Anglo-Leasing. We are going into an election year and we shall stop at nothing to get to the bottom of this,” said the chairman.

“We have no problem as a committee with international investors, what we are concerned with is the pattern in this given that this is an election year,” he stated.

Mr Outa and Mr Mangwanga had declared the company a fraud with the Kasipul Kabondo MP stating that its owners should be put behind bars.

Mr Magwana argued that the business strategy requires that they move as closer as possible to their clients.

“NHIF did not pay us to roll out, we expanded using our own funds,” he said.