Governors are now openly confronting the Ministry of Health over what they describe as a growing crisis inside the Social Health Authority, accusing Health Cabinet Secretary Aden Duale of running a devolved function from Afya House and sidelining counties in key decisions.
Their frustration has been building for months, fueled by delayed reimbursements, shrinking hospital resources, and what they see as unilateral directives from Nairobi that disrupt county operations.
Counties insist SHA owes them about Sh10.3 billion in verified claims not the Sh30 billion being quoted publicly.
They say these delayed payments have pushed county hospitals to the edge. Facilities are rationing essential supplies, diverting development money to keep daily services running, and struggling to settle bills with suppliers.
The impact is visible in nearly every region: stalled projects, shortages of medicines, and staff working without the necessary tools.
Private hospitals are also disengaging. Around 700 facilities have suspended SHA services, with the Rural & Urban Private Hospitals Association accusing the government of relying on a failed reimbursement system that constantly rejects valid claims.
RUPHA says the state owes them up to Sh43 billion in pending SHA payments, along with Sh33 billion from the old NHIF scheme.
The numbers reflect a system clogged with disputes, delays, and conflicting records.
Duale has maintained a firm stance, insisting the government will only release money for claims that are fully verified. He argues that the figures being quoted must be scrutinized before any payout is approved.
SHA officials also remind providers that SHIF regulations allow up to 90 days for processing claims. But hospitals say the real issue is the slow, inconsistent adjudication process, with many claims dismissed without clear explanations.
The governors see the matter not just as a financial standoff but a deeper governance problem.
At a recent IBEC meeting, the Council of Governors demanded immediate settlement of all verified claims.
CoG Chair Ahmed Abdullahi accused Duale and his ministry of making decisions that reshape county health services without any consultation.
He pointed to the closure and downgrading of hospitals as examples of overreach, saying counties are being treated as spectators while their facilities are reclassified from Nairobi.
Abdullahi warned that upgrading hospitals to Level 6 without proper planning could strip counties of their main revenue sources, undermining Article 209, which protects their ability to raise funds through services they provide. Losing these facilities, he said, would weaken county autonomy and strain their finances even further.
Governors argue the heart of the problem is claims management. They say public hospitals are suffocating under a Sh32 billion debt caused by delayed or rejected SHA payments.
County staff feel demoralized when valid claims are dismissed for what they describe as flimsy reasons.
And when claims are rejected, there is no clear appeal system, leaving hospitals at the mercy of a small team at the Authority.
Mombasa Governor Abdulswamad Nassir warned that a system without checks or follow-up mechanisms cannot function fairly.
While Duale says the ministry is upgrading packages and reviewing benefits to improve service delivery, counties insist reforms must start with dismantling the bottlenecks that keep money from reaching hospitals.
