Detectives unearth Sh50bn scam at NHIF in fresh twist

Tuesday December 11 2018

DAVID MWERE
By DAVID MWERE
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Detectives are investigating a possible loss of Sh50 billion at the National Hospital Insurance Fund (NHIF), in the latest scandal to hit the State corporation.

The money was paid in premiums to NHIF by the National Treasury as capitation for group life cover and last expense for civil servants, the Kenya Police Service, National Youth Service and Kenya Prisons Service.

The latest probe by the Directorate of Criminal Investigations (DCI) comes even as suspended chief executive Geoffrey Mwangi and finance director Wilbert Kurgat were charged in court yesterday for attempting to frustrate investigations into the irregular award of a Sh1.1 billion tender for the provision of integrated revenue collection services.

MERCILESS PEOPLE

Investigators stumbled upon a pile of documents at the NHIF related to premiums from special medical schemes, also referred to as capitation, worth over Sh12.7 billion annually since 2015 which, it is suspected, NHIF management and some hospital administrators conspired to double-charge the government in medical bills.

The investigations are focusing on reports that NHIF management and hospitals would generate false medical bills for civil servants, police, NYS and prison staff who had never sought treatment.

DCI George Kinoti described the syndicate as the cruelest graft that “I have ever encountered", noting that the culprits will be hunted and arraigned in court.

“These merciless people have been wantonly stealing patients’ money, leaving them for death. It may not be possible to know the amount now, but it runs into tens of billions. We are at the initial forensic trial stage,” said Mr Kinoti.

SH47.8 BILLION

Through capitation, NHIF negotiated with health facilities to pool insured civil servants and their dependants under a hospital of their choice and it pays premiums up front for any claims arising.

However, investigators have established that a cartel of managers at the fund and respective hospitals would conspire to change documents to indicate that patients had been treated at hospitals different from what they had declared and registered, without their knowledge, and later file claims that are then shared between them.

NHIF received about Sh47.8 billion in contributions during the 2017/2018 financial year split as Sh32.9 billion for national scheme member contributions, Sh12.7 billion as premiums from special medical schemes and Sh2 billion from other sources, which cannot be fully accounted for. The records reveal huge patient claims from NHIF between 2016 and 2017.

PAID IRREGULARLY

Outpatient claims rose by 48 percent, surgery 73 percent, renal dialysis 41 percent, optical on managed scheme claims 365 percent, dental 50 percent, specialised surgeries by 100 percent, kidney transplants 198 percent and drug and alcohol rehabilitation by 67 percent.

Documents in our possession show that the money for group life cover may have been paid by the Treasury irregularly.

Insurance Regulatory Authority (IRA) CEO Godfrey Kiptum warned NHIF, the National Treasury and the Health ministry on October 17, 2017 that collection of premiums is not within the mandate of the insurer and it should therefore cease.