The board of the troubled national health insurer planned to disburse an additional Sh700 million to hospitals and clinics weeks before a major split emerged among its members, the Sunday Nation has established.
Under the plan, the National Hospital Insurance Fund (NHIF) was to send the money to all the facilities that benefited from a similar allocation during round one in the first quarter of the year.
Some of the medical providers turned out either to have been ghost clinics or to be grossly ill-equipped to effectively attend to patients under the civil servants’ scheme.
Interviews with board members and people familiar with the Sh4.2 billion medical scheme for civil servants revealed that some officials of the NHIF board wanted investigations conducted into the first round of Sh700 million disbursements.
Based on the findings of the investigations, ghost clinics would be identified and excluded from the second round of allocations.
But other officials wanted the disbursements, already delayed since April, to be effected since they were part of a contract already negotiated between the NHIF and individual organisations.
The disagreement reached a climax on Thursday when board chairman Richard Muga, one of those who opposed the second round of disbursements before investigations, suspended chief executive officer Richard Kerich to allow investigations to get under way. (READ: Inside NHIF battle to control billions)
But other board members led by vice-chairman Wilson Sossion immediately disowned the move and sought the support of the Medical Services ministry. Minister Anyang’ Nyong’o suspended Prof Muga.
The exchange that played out before media cameras prompted the Head of Public Service Francis Kimemia to suspend the entire board on Friday. In a statement, Mr Kimemia said Mr Kerich would also be suspended.
“This will pave the way for the appointment of a caretaker management board and conducting of investigations into the alleged malpractices in the institution,” he said. “Additional measures will be announced next week.”
Prof Muga welcomed the government’s move, arguing that investigations will help uncover questionable dealings in the scheme in order to save it from collapse.
“This is a good scheme, and we must guard against mismanaging it,” he said. Underlying the differences is what appears to be an haphazard manner of disbursing the money.
The fund had approved the capitation method by which each of the facilities identified is given specific amounts of money according to the number of civil servants who selected it as their health service provider.
Prof Muga confirmed there had been weaknesses in the first round of disbursements. “When many mission, private and public facilities were left out, the board protested to the management, but they were ignored.”
“Now management wanted to pay the second quarter on the same basis, and that is what the chair and the board were trying to avoid to address the challenge,” he added.
He claimed that Mr Kerich often divided the board and created a parallel unit in his office to implement the new scheme against the board’s wishes, and this circumvented the fund’s procedures.
But suspended vice-chairman Sossion said the pending Sh700 million had to be paid as it was part of a contract signed between the fund and health providers.
“There is no way anyone can turn around and fail to honour the contract,” he said. Mr Sossion, the chairman of the Kenya National Union of Teachers, said some teachers had already sought treatment in selected facilities to the tune of Sh40 million even before NHIF disbursed the funds.